Volume 642 Week 55 - Wednesday 12 September 2007 
Volume 642 Week 55 - Wednesday 12 September 2007 
[Volume:642;Page:11769] 
Wednesday 12 September 2007 
Madam Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Questions to Ministers 
Financial Organisations—Regulation of Non-bank Deposit Takers 
1. Hon MARK GOSCHE (Labour—Maungakiekie) 
 to the  
Minister of Finance 
: Is the Government taking any steps to improve regulatory oversight of non-bank deposit takers? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 Yes. Today I have announced that all deposit takers including finance companies building societies and credit unions would have to be registered by the Reserve Bank and comply with minimum prudential requirements covering such things as the minimum amount of capital the need for capital ratios and the like. Those regulations should help in particular in the longer term to price risk more accurately. 
Hon Mark Gosche 
: What other steps is the Government taking to improve the regulation of finance companies? 
Hon Dr MICHAEL CULLEN 
: We are taking a series of actions across portfolios to enhance the supervision of this sector. In addition to the announcement today the Minister of Commerce yesterday informed the House that the Government is drafting regulations to ensure that all trust deeds provide trustees with robust powers to get the information they need in order to carry out their duties in the interest of investors. None of those steps alone of course is a quick fix but together they will significantly improve regulatory oversight in this area. 
Hon Bill English 
: Can the Minister tell the House when the regulations he has just referred to might be passed and when the legislation that would back up his announcements this morning might come to the House? 
Hon Dr MICHAEL CULLEN 
: I am advised by the Minister of Commerce that in terms of the regulations she is hoping to have those within the next 2 or 3 weeks or so. In terms of the legislation we would hope to get the principal bill into the House before Christmas so that submissions can be called for over the summer period. I hope we can then make reasonably quick progress in the new year in that regard. 
Corrections Minister—Confidence 
2.  
JOHN KEY (Leader of the Opposition) 
 to the  
Prime Minister 
: Does she have confidence in the Minister of Corrections; if so why? 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 Yes; because he is a hard-working and conscientious Minister. 
John Key 
: Why did she refuse to accept Damien O’Connor’s resignation as Minister of Corrections? 
Rt Hon HELEN CLARK 
: Because in the words of the member who has just asked the question “in isolation it wouldn’t be a hanging offence to be perfectly honest.” Those words were uttered by Mr Key on  
Breakfast 
 television this morning. 
John Key 
: Does she think that the track record of Damien O’Connor as Minister of Corrections a department that has seen a catalogue of errors resulting in the deaths of New Zealanders like Liam Ashley a situation where there have been massive cost over-runs in prisons where prison guards are on suspension for illegally bringing in contraband to prisons and where the priority of the Minister has been to spend money on landscaping not rehabilitation therefore warrants his removal as Minister? 
Rt Hon HELEN CLARK 
: Any Government has with any Minister of Corrections a history of prison escapes riots offending while on bail and other undesirable behaviour. What we can also point to is a sharp reduction in prison escapes and serious prison assaults on staff and other prisoners. In other words quite a lot of good is happening in our prison system. 
Hon Phil Goff 
: Can the Prime Minister tell us how many National Ministers resigned when prison escapes were running at 166 a year under National when under Labour last year it was as low as 20 a year—166 at a peak under National 20 under Labour? 
Rt Hon HELEN CLARK 
: As the member has indicated there has been a very sharp reduction in the number of prison escapes under the Labour Government. One does scratch one’s head to try to find examples of National Ministers who constantly made mistakes ever being pulled up or put to other duties. 
John Key 
: Will the Prime Minister therefore give New Zealanders an assurance today that Damien O’Connor will remain in his job as Minister of Corrections after the Cabinet reshuffle? 
Rt Hon HELEN CLARK 
: No more than Mr English would give a guarantee of continued support for Mr Key. 
John Key 
: Is the truth of the situation that the Prime Minister has no confidence in Damien O’Connor as Minister of Corrections and that was why she was pretty quick to condemn him when she was at APEC but that the reality is that she does not want to sack him today because that would be to give another scalp to National—and when a Prime Minister has sacked as many Ministers as she has it starts getting embarrassing? 
Rt Hon HELEN CLARK 
: I am proud as Prime Minister to have actually applied some standards which is something no National Prime Minister ever did. 
John Key 
: Does the Prime Minister feel as though she has been outmanoeuvred by Damien O’Connor who worked out when he was in the duty-free lounge at Hong Kong airport that the way to keep his job was to text to the Prime Minister that he intended to offer his resignation knowing that she could not possibly take his resignation in isolation and that the person who is now looking a fool is the Prime Minister? 
Rt Hon HELEN CLARK 
: Obviously not. 
John Key 
: Does the Prime Minister agree— 
Hon Trevor Mallard 
: Have another go John. 
Madam SPEAKER 
: Can we just get on with the question and can we please keep the interjections to a minimum. 
John Key 
: Well maybe if Mr Mallard had gone on the rugby team they would not have had to include— 
Madam SPEAKER 
: That does not help Mr Key. 
John Key 
: He could have made the numbers up. 
Madam SPEAKER 
: The team did in fact win. 
John Key 
: The team won did it? Can I just check is that because Trevor was not there? 
Madam SPEAKER 
: OK; off we go. John Key supplementary question. 
John Key 
: Does the Prime Minister agree with the  
Dominion Post 
 editorial yesterday that said she leads “a government that has lost touch with public opinion.” and is “dying a death by a thousand cuts and the cuts are self-inflicted.”? 
Rt Hon HELEN CLARK 
: I am proud to lead a Government that does not have someone on its front bench who thinks it is funny to make cracks about why people do not get fat in concentration camps. 
Question No. 3 to Minister 
Hon Dr MICHAEL CULLEN (Attorney-General) 
: 
 I raise a point of order Madam Speaker. I raise it in relation to this question because Mr Copeland has released a press statement expressing disappointment in my answers. As I have not given my answers yet I wonder whether I should bother to do so or whether I should table the press statement. 
Madam SPEAKER 
: The member is entitled to ask his question and it is up to the Minister to decide whether he replies. 
New Zealand Bill of Rights (Private Property Rights) Amendment Bill—Government Support 
3.  
GORDON COPELAND (Independent) 
 to the  
Attorney-General 
: Will the Government support my New Zealand Bill of Rights (Private Property Rights) Amendment Bill given that former Labour Prime Minister Sir Geoffrey Palmer has said publicly that “I took a deliberate decision to exclude this in the 1980s but on reflection I believe it should be included” in reference to the protection of property rights by the Bill of Rights? 
Hon Dr MICHAEL CULLEN (Attorney-General) 
: 
 No. My understanding is that the Law Commission which is headed by Sir Geoffrey Palmer has taken the view that before any such change should occur there would need to be a great deal of work on what the legal implications of it might be. That work simply has not been done. 
Gordon Copeland 
: Is the Attorney-General aware that my bill simply adds to the New Zealand Bill of Rights Act the property rights contained in the Universal Declaration of Human Rights which was enthusiastically supported by Labour Prime Minister Peter Fraser when adopted by the United Nations in 1948; if so why does the Government want to signal now a contrary intent by opposing this important addition to New Zealand law? 
Hon Dr MICHAEL CULLEN 
: The language of things like the universal declaration is not necessarily the language one would use in legislation that is enforceable within New Zealand. I think the member has not dealt with those issues. I do notice further however that Mr Copeland has an arrangement with National whereby his vote is cast with National in all matters and that National is opposed to this bill. It appears he may have sold his rights rather too cheaply in that respect. 
Russell Fairbrother 
: Is he aware of any unintended consequences that may arise from the bill as currently drafted? 
Hon Dr MICHAEL CULLEN 
: One of the problems I have had drawn to my attention is the use of the word “property”. The courts here and overseas have consistently given the term a very wide and liberal meaning and the mind boggles at some of the legislative proposals that could fall within the ambit of the bill in that regard. 
Gordon Copeland 
: Is he concerned that my bill would complicate the legal interpretation of property rights in New Zealand in relation to the Resource Management Act and the Waitakere Ranges Heritage Area Bill thus exposing the Crown to possible legal challenges; if so is it therefore now the position of the Government that it is more important to protect the Crown than to protect the private property rights of the citizens of New Zealand? 
Hon Dr MICHAEL CULLEN 
: No. Of course if specific legislation passes then in the context of making certain statements around property rights that would override any bill that the member might have passed by the House in any case. 
Gordon Copeland 
: I seek the leave of the House to table the speech by Sir Geoffrey Palmer that was alluded to. 
Document by leave laid on the Table of the House. 
Gordon Copeland 
: I seek the leave of the House to table the Universal Declaration of Human Rights of 1948. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? Yes there is objection. 
Electoral Act—Electoral Period 
4.  
Hon BILL ENGLISH (Deputy Leader—National) 
 to the  
Minister of Justice 
: Does he consider that the 3-month election period prescribed in the Electoral Act 1993 is a fair reasonable and realistic period; if not why not? 
Hon MARK BURTON (Minister of Justice) 
: 
 On balance no; because we now know that early in the 2005 election year certain groups put in place plans to circumvent the spending limits and the 3-month regulated period set out in the Electoral Act 1993. Therefore a longer regulated period such as the period beginning 1 January in the year in which the Parliament is due to expire is a fairer more reasonable and more realistic period to help safeguard the integrity of the New Zealand electoral system. 
Hon Bill English 
: Will the Minister now answer a question I gave him notice of this morning which is: what actual examples of political advertising occurring outside the current 3-month election period did Cabinet consider were unacceptable when it decided to lengthen this period for up to 11 months? 
Hon MARK BURTON 
: One example is the $350000 Wake Up New Zealand campaign run by the Exclusive Brethren before they ran their $1 million campaign in collusion with the National Party and they made very clear in running this campaign before the 3-month regulated period that its sole purpose was “getting party votes for National”. Another example that I think Mr English is personally well familiar with is the case of the Maxim Institute. The Maxim Institute while purporting to be non-partisan expended a large part of its $1 million budget coordinating a series of education releases specifically designed to support the National Party education policy programme. Again that series of releases commenced before the beginning of the 3-month regulated period. 
Hon Bill English 
: So is the Minister now saying that he is extending the period to 11 months to stop any groups from planning to take part during the 3-month period and that he has extended the period to 11 months because he has found an example of someone whose political views agreed with those whom he opposes? 
Hon MARK BURTON 
: That is clearly not what I said. The member should pay attention. First I gave the member two examples of campaigns that started before the regulated period—they were not just discussed; they actually commenced—and that involved hundreds of thousands of dollars worth of expenditure specifically designed to secure a particular electoral result whilst trying to avoid the electoral law of New Zealand. That is the primary target of the legislation. In the end it goes back to the principle of whether our electoral system should be based on a contest of alms or bank balances or on a contest of ideas. 
Hon Peter Dunne 
: Does the Minister consider in the light of this particular controversy that in retrospect it would have been prudent to consult the National Party as well as the parties that were consulted in the preparation of this legislation and if he does consider that to be the case is he now prepared to consult the National Party over ways in which the legislation might be amended to make it more workable; if not why not? 
Hon MARK BURTON 
: The interchange with political parties began in terms of this legislation in front of a parliamentary select committee that included the National Party. There was a free exchange of ideas and in fact the basis of this legislation came out of that discussion and the issues raised. Secondly the matter is before a parliamentary select committee in which the National Party participates. That is a good environment—one where many New Zealanders are now contributing—in which to consider the merits of the bill. 
Rt Hon Winston Peters 
: Can I ask the Minister seeing that Mr English has put into question the Electoral Act 1993 on the criteria of its fairness and reasonableness whether this is the same member who designed an Act to ensure that a new political party could not advertise in the 1993 election on pain of having to pay $100000 on each and every occasion it advertised on radio or TV; and how fair and reasonable is that? 
Hon MARK BURTON 
: It is certainly my recollection that that is the case and I think the member asking the question has good grounds to be concerned about that history. 
Hon Bill English 
: So can the Minister confirm that the whole case for extending the regulated period to 1 January thereby restricting political opinion in New Zealand for almost a third of every parliamentary term hinges on one pamphlet produced by one group outside the 3-month period? 
Hon MARK BURTON 
: I cannot confirm that because that is not what I said. 
Hon Bill English 
: Can the Minister confirm that what he has produced in the House today is one pamphlet from one group that was published outside the 3-month period and another pamphlet from another group which he condemns because it agreed with aspects of National’s education policy that that is all the evidence he has produced that only the first one actually constitutes political advertising outside the 3-month period and that that is his justification for shutting down all public opinion and any private body from having an opinion in election year? 
Hon MARK BURTON 
: I cannot confirm the first assertions; they are wrong. The member’s assertions are fundamentally nonsensical. 
Hon Bill English 
: Given that the Minister’s standard reason is that he picked a point between the Canadian time period and the UK one why did he not just stick with the 3-month period which falls between the 6-week period that applies in Canada and the 12 month period in the UK? 
Hon MARK BURTON 
: Again the member in his usual fashion is being selective—either in his knowledge or in his understanding. I should perhaps explain that in Canada for political parties although there is a spending cap there is a non-specified regulated period. In other words the entire electoral cycle is regulated; every dollar has to be accounted for. So in essence the Canadian situation for political parties is much more stringent and controlled than even the UK one. The New Zealand example sits very much between those two if not in a more liberal way in terms of those two very similar jurisdictions. 
Hon Bill English 
: How does the Minister feel about being put up by the leadership of the Labour Government to defend this indefensible legislation day after day when he knows that it is going to sack him within a matter of weeks and hope that someone else will clean it up? 
Hon MARK BURTON 
: I always feel much better about being “put up” by this side of House to defend legislation that is there to protect the participatory rights of New Zealanders in a fair electoral system than I would standing up on that side of the House day after day repeating the same silly questions and trying to justify wealth over ideas. 
Hon Bill English 
: Can the Minister recall that one of the objectives of this exercise set out in the Cabinet paper was to encourage participation in democracy and can he explain how a regime that regulates any opinion held by a private citizen or a community group for the whole of an election year and subjects it to very tight spending caps and difficult bureaucratic processes increases participation in democracy? 
Hon MARK BURTON 
: That is not what this legislation does. It sets out to close the loopholes—or at least reduce them in size—that the National Party and its friends in the Exclusive Brethren Church and others exploited in 2005 in order to try to use large amounts of money to buy an election result. 
Rt Hon Winston Peters 
: I ask the Minister whether one of the objects of the bill is to prevent outside parties from using money which is often raised outside New Zealand to buy or govern political policy and political parties; is that one of the motives in the legislation that it is designed to stop? 
Hon MARK BURTON 
: Indeed it is. I would note again regarding some of the examples that Mr English gave selectively yesterday of other jurisdictions that had no regulated period that he failed to mention they also had no electoral spending cap. Of course we see in some of those countries that the amount of money one can spend equates directly with the number of votes one acquires. That is something New Zealanders have rejected since the late 1800s; since then we have had statutes that have protected the notion that our electoral system is about a contest of ideas not bank balances. This Government is determined to protect that tradition. 
Rodney Hide 
: Does the Minister stand by his answer given in the House on 6 September that a regulatory impact assessment had been done on the Electoral Finance Act; or is this just another example that proves that this Minister does not really care whether what he says squares with the facts? 
Hon MARK BURTON 
: As the member knows I indicated that it was my recollection that that was the case. I subsequently checked and as the member also knows such a statement had been prepared consistent with the law as it applied at the time the bill was prepared. 
Rodney Hide 
: I raise a point of order Madam Speaker. What we have had here is a Minister saying that it is OK to give an answer that is not true as long as one says that that is his or her recollection. The history of this is that if a Minister says it is his or her recollection that the answer is yes and then he or she discovers that the “yes” was false he or she is required by the Standing Orders to come down to the Chamber as soon as is practicable and correct the answer in the House. What we had here with this Minister is that he gave an answer: “Yes to my recollection.” which was a false answer and then he subsequently finds out that the answer was not true. We have got it corrected only because I used up another supplementary question. The Minister now says that what he said on 6 September was not true. 
Hon Dr Michael Cullen 
: When the Minister says “I recollect a” even if he or she discovers that that is not the case the fact is that that was his or her recollection at the time at which it was said. Therefore in my view a correction is not required. It is not the same as when a Minister is asked a question about say how much such and such is and he or she gives the answer that it is 73 percent only to discover later that in fact it was 37 percent and he or she may have got the number reversed. 
Madam SPEAKER 
: Ruling on the point of order it is not for the Speaker to judge the truth or otherwise of the statement. It is not uncommon for Ministers to subsequently qualify their answers if they do not have all of the details in front of them. 
Rodney Hide 
: I raise a point of order Madam Speaker. Maybe it would help the House if you would give a considered opinion of when it is appropriate for a Minister to correct an answer no matter what qualification he or she puts on the answer. I think the expectation that I have—and that the public has—is that if a member says that his or her memory is “X” and then subsequently checks and find it is “Y” he or she should actually correct it and say: “My memory was faulty and my answer is ‘Y’.” 
Madam SPEAKER 
: It is not for the Speaker to judge what Ministers should do; it is for Ministers to judge whether they need to have a correct answer. It is not for the Speaker to impose her opinion on that. 
Harmful Substances—Public Protection 
5.  
JILL PETTIS (Labour) 
 to the  
Associate Minister of Health 
: What action is the Government taking to protect New Zealanders against harmful substances? 
Hon JIM ANDERTON (Associate Minister of Health) 
: 
 The Labour-Progressive Government takes a multi-pronged approach to protecting New Zealanders from harmful legal as well as illegal substances. Our approach under the National Drug Policy is to put in place measures to reduce the supply of drugs reduce the demand for those drugs and treat those who are the victims of those substances. The list of actions taken by this Government is far too long for me to read out in the House today. However the latest action was the introduction of legislation into this House yesterday to ban benzylpiperazine and related party pills—legislation supported by research expert opinion and an overwhelming number of members in this House. 
Jill Pettis 
: Has the Minister been asked to refer any other substances to the Expert Advisory Committee on Drugs? 
Hon JIM ANDERTON 
: Yes I have. Recently I received a letter from a National member in this House asking whether the Expert Advisory Committee on Drugs would consider the substance dihydrogen monoxide which may have been described to her as colourless odourless tasteless and causing the death of uncounted thousands of people every year and withdrawal from which for those who become dependent on it means certain death. I had to respond that the experts had no intention of doing so because the substance in question was water. I seriously doubt that the Expert Advisory Committee on Drugs would want to spend any time evaluating that substance. 
Corrections Minister—Statement on Corruption 
6.  
SIMON POWER (National—Rangitikei) 
 to the  
Minister of Corrections 
: Does he stand by his statements that he takes corruption allegations “extremely seriously” and that “We cannot afford to have our hard-working and dedicated staff tainted by the actions of a few.”? 
Hon Dr MICHAEL CULLEN (Leader of the House) 
 on behalf of the  
Minister of Corrections 
: Yes. 
Simon Power 
: How will hard-working and dedicated staff see his decision to take a suspended prison officer on a parliamentary rugby tour as anything other than some sort of personal endorsement of that staff member and does not this make a mockery of his claims that he takes such allegations extremely seriously? 
Hon Dr MICHAEL CULLEN 
: No. 
Simon Power 
: Does he stand by his statement regarding allegations of corruption at Rimutaka Prison: “I encourage the individual who has made them to take the information to Mr Patten to have them thoroughly investigated.”; if so how forthcoming does he think potential whistleblowers will be when they see that an employee who is suspended then accompanies the Minister on a parliamentary rugby trip? 
Hon Dr MICHAEL CULLEN 
: Yes the Minister does stand by that invitation. He does not believe that in that kind of circumstance even though a bad call was made the prospect of somebody going on a parliamentary rugby trip would deter somebody from levelling serious charges against that person. A number of parliamentarians who have been on parliamentary rugby trips have had a variety of charges levelled against them not least in this House. 
Rt Hon Winston Peters 
: Having regard to the number of finance houses that have gone down recently and the number of serious crimes in our streets is it proper use of Government or taxpayers’ resources to be hounding a man for playing a simple game of rugby offshore in his own time even though he might be the subject of an inquiry that has yet to produce its findings and how lily-livered is that? 
Hon Dr MICHAEL CULLEN 
: I certainly think it is an example of playing the man rather than the ball. But of course that is precisely what Mr Key was complaining of only a week or two back when he was too weak to stand up to any such criticism. 
Simon Power 
: Is it the Department of Corrections that is actually being punished by having a caretaker Minister who will not be able to make any important medium or long-term decisions in the weeks leading up to the reshuffle at a time of year when prison numbers are at their peak Budget bids are being put together and reports on a number of inquiries including ones into corruption are shortly due to be released? 
Hon Dr MICHAEL CULLEN 
: Even assuming that there is such a thing as a reshuffle presumably in the interim every Minister is holding his or her portfolio in anticipation that it may change. 
Simon Power 
: How can the 5800 Department of Corrections staff in New Zealand have any confidence that the case for their department is being advocated for in any meaningful way around the Cabinet table for the foreseeable future when the Prime Minister has made it crystal clear that the Minister is in a caretaker role until a reshuffle occurs? 
Hon Dr MICHAEL CULLEN 
: I can assure the member that all matters relating to the Department of Corrections portfolio continue to attract considerable attention from Cabinet. It is one of the few areas where for example every week we examine the number of people in custody keeping track of what is going on within the prison system. 
Simon Power 
: Does he think he has the confidence of the Prime Minister? 
Hon Dr MICHAEL CULLEN 
: The Minister of Corrections heard the Prime Minister say earlier that she has confidence in the Minister and the Minister believes absolutely what the Prime Minister says on such matters. 
Nuclear Weapons—New Zealand United Nations Initiative 
7.  
DIANNE YATES (Labour) 
 to the  
Minister for Disarmament and Arms Control 
: What initiative will New Zealand take at the United Nations General Assembly this year to reduce the risk of use of nuclear weapons? 
Hon PHIL GOFF (Minister for Disarmament and Arms Control) 
: 
 New Zealand will introduce a resolution into the first committee of the United Nations General Assembly next month calling for all States with nuclear weapons to remove such weapons from high-alert and launch-on-warning status. This resolution is in response to the threat posed by having literally thousands of nuclear weapons on hair-trigger alert and is consistent with the recommendations of the report of the Weapons of Mass Destruction Commission which was released last year. 
Dianne Yates 
: What is launch-on-warning status and why in particular is it considered to be a threat? 
Hon PHIL GOFF 
: Launch-on-warning status is a nuclear posture intended to ensure quick responses in the event of an apparent nuclear attack. For example if the attack were to be between Russia and the United States a nuclear-armed missile would take approximately 25 minutes to get from one continent to the other. If the attack was from a submarine-launched missile it could be considerably less than that—a matter of sheer minutes. Any State that perceives there may be an attack on it that has its arms on launch-on-warning status and that then retaliates does not know whether the apparent attack is real whether it might have been the result of terrorist infiltration into a nuclear facility or whether the launch of a missile from the other side might have been the result of a technical malfunction or an accident. Clearly that is a high-risk situation and to move those weapons back from hair-trigger alert makes a lot of sense and will be widely supported. 
Dianne Yates 
: What other initiatives on disarmament is New Zealand likely to lead at this year’s United Nations General Assembly? 
Hon PHIL GOFF 
: New Zealand will also lead a resolution along with Mexico and Australia promoting the bringing into force of the comprehensive test-ban treaty. New Zealand will lead a second resolution together with Brazil to promote the building of support for a southern hemisphere free of nuclear weapons. We will work with our partners in the New Agenda Coalition to promote a resolution on nuclear disarmament generally. All of those initiatives are evidence of New Zealand’s ongoing leadership in our effort to rid the world of nuclear weapons of mass destruction. We should be proud of the lead that New Zealand is taking under a Labour-led Government. 
Teachers—Staffing Ratio 
8.  
KATHERINE RICH (National) 
 to the  
Minister of Education 
: Does he stand by his statement: “The Government is committed to a 1:15 ratio; by the end of 2008 with the other Budget to come that is what we will have.”; if so is he satisfied that he will have enough teachers to staff new entrant classes to ensure that by 1 January 2008 “there are no more than 15 students in a class”? 
Hon STEVE MAHAREY (Minister of Education) 
: 
 Yes; and yes by the end of 2008. 
Katherine Rich 
: Can the Minister confirm that his officials have advised him that he has no chance of meeting the Government’s promise of a ratio of 1:18 students let alone the promise of 1:15 because there are not enough experienced teachers to teach new entrants and there will not be for the next 2 to 4 years and that his officials have told him: “Our analysis suggests that approximately two-thirds of the 700 positions will not be able to be filled.” meaning that he is short by over 400 teachers? 
Hon STEVE MAHAREY 
: No the ministry has advised me that although the situation will be tight next year it believes that demand can be met. 
Moana Mackey 
: What impact would the proposed introduction of bulk funding have on the available supply of teachers? 
Hon STEVE MAHAREY 
: I am told that if bulk funding were introduced by say a future potential—possible but not likely—National Government then schools would employ teachers for lower wages and employ less-experienced teachers as well. It would put a cap on available funding and force schools to get by on the decreasing amount and 2600 schools would have to negotiate their own employment agreements leading to widespread turmoil and a complete breakdown of the national teaching profession. By contrast—good news—the Labour-led Government has put more than 5000 teachers above those required by roll growth in front of classes. 
Hon Brian Donnelly 
: Did his predecessor not understand how school staffing under a ministerial reference group operates when he stated there would be no more than 15 students in any class that had first-year students; or was he simply indulging in electioneering rhetoric thus sending on to the Minister yet another hospital pass? 
Hon STEVE MAHAREY 
: No my predecessor has an outstanding track record as the Minister of Education and the sector acknowledged that over a period of 6 years—they are remembered as very short years. He managed to lift funding lift the number of teachers introduce professional development raise the issue of leadership get the curriculum review under way and advance the work of the New Zealand Qualifications Authority. The list is so long that of course that could only be Mr Trevor Mallard. 
Katherine Rich 
: Can he confirm that his officials have told him that in order to meet the shortage of teachers next year: “some schools might have to compromise on their quality criteria to employ extra teachers.” and how does he think principals parents and other teachers would feel about that? 
Hon STEVE MAHAREY 
: As I said before the ministry has advised that although the situation will be tight demand can be met. Of course that means that we have been putting in place a whole range of initiatives to ensure that the pressures can be addressed. If the House will bear with me I will just read through some of the list. Study grants include the TeachNZ maori medium scholarships the TeachNZ rural scholarships and the TeachNZ loan support scheme for Maori medium teachers. Grants include the national relocation grant primary and secondary; the international relocation grant primary and secondary; transfer and removal reimbursements; the beginning teacher time allowance; the overseas teacher time allowance; the retrained teacher time allowance; and the national recruitment allowance. In other words we have been monitoring this very closely because we are employing a lot of new teachers—for example 5000 above roll growth—so we are very aware of the tight situation and we are trying to address it with these kinds of measures. 
Hon Brian Donnelly 
: Is the Minister saying that when this policy is fully actioned every class in which there is a new entrant student will have a maximum number of 15 students? 
Hon STEVE MAHAREY 
: That is a very good question because as the member knows we are talking about a ratio—that is that the equivalent number of teachers for having a 1:15 ratio is available—but as all of the schools have argued what they want to be able to do is to have some flexibility. There is no guarantee with John Key—I know that; it rhymes and it is true—but there is a guarantee with Labour. 
Katherine Rich 
: In light of his answer that he will be relying heavily on the use of beginning teachers why is he going to rely on the use of beginning teachers to take up this role when he has previously said: “to guarantee that the intent of the policy is realised the extra teachers must be experienced teachers with the knowledge of how to teach literacy and numeracy to 5 and 6-year-olds”; so why is he covering the gaps with beginning teachers? 
Hon STEVE MAHAREY 
: I do not recall anybody arguing that beginning teachers were the only people put into this particular role. In fact one of the things we are doing here is trying to for example get teachers back from overseas who are fully experienced and ready to join the workforce here. I would take the member’s question more seriously if the National Government in power had done one single thing to reduce the student-pupil ratio—one single policy and I would start to take her seriously. 
Katherine Rich 
: With his mention of programmes to increase new graduates can he confirm to the House that the number of teaching graduates has decreased by 30 percent between 2000 and 2005 and that of the 16300 new graduates who graduated during that time just over a third were actually teaching in a classroom 1 year after they graduated so just under two-thirds were lost straight after they graduated? 
Hon STEVE MAHAREY 
: I know that the member has a law degree and I understand that teachers just like lawyers like to travel. The fact that they might not be in the workforce immediately after their training does not mean they will not be in the workforce forever. 
Judith Collins 
: She’s not. 
Hon STEVE MAHAREY 
: The member is not. She has left the legal profession; I understand that. Many other lawyers do not go straight into law but they come back after they decide to take up the profession. 
Katherine Rich 
: Can the Minister confirm that his own officials have advised him that he has no chance of meeting the 1:18 ratio let alone the 1:15 ratio and that if the only ideas he has are to crank up immigration increase the number of beginning teachers and cover the bases in other ways he will undo any of the good work that lowering a ratio might do—it is more than having a ratio; it is actually delivering in the classroom? 
Hon STEVE MAHAREY 
: As I said before the ministry has advised that it will be tight but the ministry believes it can be done. I repeat: if we are going to talk about only having ideas I ask for one single idea from the member in relation to student-pupil ratios. When National was in power last time it did nothing. I have not heard one single promise from her today that said anything about ratios and until she does no one really cares what she says. 
United Nations Declaration on the Rights of Indigenous  Peoples—Government Support 
9.  
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
 to the  
Minister of Maori Affairs 
: Ka aki ia i te Kawanatanga ki te tautoko i te Kawenata Whakapuaki o te Paremata Kotahitanga o te Ao mo nga Iwi Taketake o te Ao apopo nei poti ai te tekau ma toru o Mahuru rua mano ma whitu ara he kawenata whakapuaki kua mahi nei te iwi taketake ki te whakatutuki mo nga tau rua tekau ma wha ki muri? 
[ 
Will he put pressure on the Government to support the United Nations Declaration on the Rights of Indigenous Peoples which will be voted on tomorrow 13 September 2007 a declaration that indigenous people have been working on for the last 24 years? 
] 
Hon NANAIA MAHUTA (Minister of Customs) 
 on behalf of the 
 Minister of Maori Affairs 
: No. 
Hone Harawira 
: Does the Minister of Maori Affairs agree that indigenous peoples should have the right to maintain and strengthen their own institutions cultures and traditions; to establish control and provide education in their own language; to live in freedom peace and security as distinct peoples; to enjoy full and effective participation in all matters that concern them; to have full enjoyment of all human rights and fundamental freedoms; to freely determine their political status; to freely pursue their economic social and cultural development; to be free from discrimination; and to not be forcibly removed from their lands or territories? 
Hon NANAIA MAHUTA 
: Many aspects of the Draft Declaration on the Rights of Indigenous Peoples will resonate here in New Zealand but it would be difficult for the Government to take a position on an international declaration that is incompatible with New Zealand democratic processes and domestic legislation. 
Darien Fenton 
: What is the Government’s position on the Draft United Nations Declaration on the Rights of Indigenous Peoples? 
Hon NANAIA MAHUTA 
: I have been advised that the draft declaration is incompatible with the Government’s position. Tomorrow’s vote will reflect that. 
Hone Harawira 
: Does the Minister of Maori Affairs agree with the comments of Ms Tauli-Corpuz Chairperson of the United Nations Permanent Forum on Indigenous Issues and co-ordinator of the Asia Indigenous Peoples Caucus that the United Nations Declaration on the Rights of Indigenous Peoples is a historic milestone for the indigenous peoples who have been working on it for more than 22 years and that States have a historical and moral obligation to adopt the declaration which she characterised as the “key instrument and tool for raising awareness on indigenous people’s situations and indigenous people’s rights.”; if so when is he planning on speaking out against his own Government’s stated opposition to the United Nations Declaration on the Rights of Indigenous Peoples? 
Hon NANAIA MAHUTA 
: There has been quite a long discourse on the Draft Declaration on the Rights of Indigenous Peoples and quite recently it has been referred to as an aspirational document. In fact during question time in the House last week one of the concerns I pointed to was that many countries intend to support it but have no intention of implementing it. That just cannot be the case. 
Hone Harawira 
: Does the Minister of Maori Affairs agree with his colleague Nanaia Mahuta’s comments that “the Minister is well aware that New Zealand has called for open and transparent consultations on the text”—of the Declaration on the Rights of Indigenous Peoples—“and he is disappointed that such consultations did not eventuate despite the continued efforts of a number of countries including New Zealand to trigger such a process.”; given his support for the consultation process can he please explain to the House why there has been no formal consultation on the declaration with any of the major iwi in this country the New Zealand Maori Council the Maori Women’s Welfare League the iwi chairpersons’ forum the Federation of Maori Authorities or the Maori Party which happens to hold the majority of the parliamentary seats representing the indigenous people of Aotearoa? 
Hon NANAIA MAHUTA 
: Yes; no extensive consultation has been undertaken with a number of groups interested in this matter. 
Darien Fenton 
: What has the Government done to improve opportunities for Maori? 
Hon NANAIA MAHUTA 
: Regardless of any international instruments this Government is committed to ensuring that Maori participate equally and successfully in New Zealand’s economy and society. The Government’s priorities have proven to be successful in improving outcomes for Maori. The measures show an increase in the average income of Maori in the workforce and a record low rate of Maori unemployment. More Maori are getting degrees more Maori are owning their own business more Maori children are in early childhood education and more Maori are taking charge of their own affairs and assets. That is positive progress. 
Accident Compensation Corporation—Private Investigators 
10.  
PANSY WONG (National) 
 to the  
Minister for ACC 
: Does she stand by her answers to questions for written answer 13711 (2007) and 14994 (2007) dated 8 August and 27 August respectively that she is not aware of any investigation by external authorities into any of the private investigators ACC hires; if so why? 
Hon RUTH DYSON (Minister for ACC) 
: 
 Yes; neither the Accident Compensation Corporation (ACC) nor I are aware of any investigations by external authorities into the ACC’s contracted private investigators. As the member may be aware the very nature of investigations can often preclude details of those investigations being discussed with other parties. 
Pansy Wong 
: Has the Minister been informed of the off-site meeting on 28 June of her ministerial adviser and her private secretary for ACC where information was sought about a Police Complaints Authority inquiry into Mainland Information Consultants an ACC contractor with contracts reported to be worth $172000; if so what has she been told and what was the purpose of the meeting? 
Hon RUTH DYSON 
: If I may start with the last question the member asked the purpose of the meeting was to give the person involved—the third party to the meeting—an opportunity to express his serious concerns and directly raise allegations. One of the allegations made was that the Police Complaints Authority was making an investigation after referral and that was the subject of a letter to both myself and the member and was also the subject of insinuation in the  
Investigate 
 magazine. The Police Complaints Authority is entitled to investigate the actions of the police rather than of private investigators. It has not informed me of any such investigation. 
Pansy Wong 
: Why did the Minister twice then on the public record in answering questions say that she was not aware of any allegation or investigation of external authorities into the private investigators hired by ACC? 
Hon RUTH DYSON 
: Frankly because the answer is true. The fact that there is an allegation in reputable magazines or publications such as  
Investigate 
 in letters to me or in any other correspondence to the member does not say that that information is true. I have no information from the Police Complaints Authority or from any other external authority that gives me the ability to confirm to her that any such investigation is taking place. 
Sue Moroney 
: Would the Minister normally publicly comment on matters that potentially are or could be subject to a future investigation? 
Hon RUTH DYSON 
: No I certainly would not. As the member who asked the primary question should know it is not generally appropriate for a Minister to comment publicly on such matters because such comment has the potential to prejudice the outcomes or the process of an investigation. [ 
Interruption 
] I raise a point of order Madam Speaker. I take offence at the insinuation of lying to the House that was made by the member Sandra Goudie and I ask you to ask her to withdraw and apologise. The statements I have made in written and oral answers are factually correct. 
Madam SPEAKER 
: Would the member please withdraw and apologise. 
Sandra Goudie 
: I raise a point of order Madam Speaker. What was it that the member took offence to? 
Madam SPEAKER 
: I did not hear what the comment was but the Minister asked that you withdraw and apologise for implications of dishonesty. The Minister did not repeat exactly what you said but from what I could understand she was saying that you insinuated in your comment that she was lying. If you did do that then I ask you to withdraw and apologise. Are you saying that you did not make that comment or insinuation? 
Sandra Goudie 
: I made no comment about the Minister lying. 
Madam SPEAKER 
: About her dishonesty? 
Sandra Goudie 
: I made the comment: “So she did know about it.” 
Madam SPEAKER 
: Well it is a marginal call. 
Hon Harry Duynhoven 
: I raise a point of order Madam Speaker. I think this raises a very interesting issue that you may like to consider and come back to the House on. The word “liar” has long been ruled out in this House. To state in the way that the member did immediately after the Minister’s comments to the House that those comments were incorrect by inference implies absolutely that the Minister was lying. I think that that and the way that it was done may be something you may like to reflect on. You may like to give us a ruling for the future as to how one can disagree with what a member says without actually being in the position of saying that the member is being untruthful or is lying. I think it is a very interesting issue to consider. 
Gerry Brownlee 
: I do not think there is anything for you to consider here at all. The comment from Sandra Goudie was quite reasonable in the circumstances. It is patently evident from the—[ 
Interruption 
] 
Madam SPEAKER 
: Who made that comment? 
Rt Hon Winston Peters 
: Well I did. 
Madam SPEAKER 
: I am sorry but we know the rules in this House. 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. 
Madam SPEAKER 
: No we will finish with this one and then we will hear your point of order Mr Peters. 
Gerry Brownlee 
: That is not very satisfactory Madam Speaker. You were about to make a ruling on your order in the House and Mr Peters has circumvented that. 
Madam SPEAKER 
: Would the member please continue with his point of order so that I can get this matter settled. 
Gerry Brownlee 
: My point of order is simply that it is patently obvious from the answers given by the Hon Ruth Dyson that she was aware of the circumstances. That is undisputable. So for Sandra Goudie to say the Minister knew is to tell the truth. 
Madam SPEAKER 
: I think the issue about lying or not telling the truth is being confused a little bit. The general rule is that if a member thinks there is a personal reflection on him or her and requires another member to withdraw and apologise then that is normally what happens. In this instance the Minister did believe a personal reflection was made. She asked for it to be withdrawn and for an apology so I ask the member to do that. There is no implication about dishonesty. That is the normal rule. If a member takes that position then the other member withdraws and apologises. 
Sandra Goudie 
: I apologise. 
Madam SPEAKER 
: Thank you very much. 
Gerry Brownlee 
: At the risk of behaving a little like a head prefect or something there was an issue with Mr Peters. 
Madam SPEAKER 
: A comment was made—[ 
Interruption 
] Please speak to your point of order Mr Peters. 
Rt Hon Winston Peters 
: Mr Brownlee got to his feet and said to you that there was nothing in that point of order at all. That is a complete statement—a conclusion at the end of an argument. That is what one usually leads to when one makes out an argument as to why something is not a point of order. That being the case I said: “If that’s the case sit down then.” 
Gerry Brownlee 
: What I actually said—and it may have been difficult for Mr Peters to hear down there—was that there was nothing for Madam Speaker to consider here and at that point I was interrupted. I think I am surely entitled on a point of order to explain what it is about. 
Madam SPEAKER 
: I think we have resolved the point of order. I make the point that members are on their last warning about interjecting on points of order. That exactly illustrates the problems that arise. 
Peter Brown 
: Is the Minister aware that there have been fraud investigations into both claimants and providers on a seemingly never-ending basis sometimes over several years resulting in several cases if not the majority where there was nothing found—zilch; not even a whiff of fraud—and will the Minister inform the House whether she condones that practice? 
Hon RUTH DYSON 
: As the member knows the issue of fraud investigations was the subject of an independent review by Doug Martin and associates recently. I welcomed the recommendations in that review. I think it was a rigorous review and the recommendations clearly indicated that although the rest of ACC has moved on since the time of the National-led Government of the 1990s and its attitude of secrecy and intrusion the fraud unit had not. I welcome the opportunity for the board and ACC management to bring that part of ACC in line with the rest of it. 
Pansy Wong 
: What then does the Minister make of the letter written by ACC and dated 9 July that stated it was aware of allegations against that private investigator and would rely on any findings made by the Police Complaints Authority before deciding on whether to continue the contract with Mainland Information Consultants and will she hold anyone to account for that information breakdown to her? 
Hon RUTH DYSON 
: I would highly recommend that the member read the correspondence she attempts to quote from before she misquotes it because it does not say that at all. It says: “ACC is aware of allegations that have been made in relation to Mainland Information Consultants and will rely on any findings made by the Police Complaints Authority.” Mainland Information Consultants has private investigators working for it. The Police Complaints Authority cannot under its statute—the Police Complaints Authority Act 1988—investigate anyone other than the police. It cannot investigate private investigators; that is the role of the Registrar of Private Investigators and Security Guards. If the member wants to ask me whether I know of anybody who is investigating the police then she should ask that question—she asked about private investigators. Just to put it on the record I do not know whether the Police Complaints Authority has been investigating the police either. 
Peter Brown 
: Noting the Minister’s earlier answer to the question I posed if I were to supply her with the details of a never-ending case of fraud investigations over several years—in this case into a provider—that has resulted in absolutely nothing except the individual being overcome by stress and anguish is she prepared to look into the matter fairly and to examine it in detail? 
Hon RUTH DYSON 
: I would be absolutely prepared to pass it on to the chief executive who is responsible for operational matters. 
Pansy Wong 
: I seek the leave of the House to table the letter written by ACC that stated it was aware of allegations and would rely on any findings— 
Document by leave laid on the Table of the House. 
Pansy Wong 
: I seek leave to table an email of the off-site meeting between external parties— 
Document by leave laid on the Table of the House. 
Government Computer Systems—Cyber Attacks 
11.  
KEITH LOCKE (Green) 
 to the  
Minister in charge of the NZ Security Intelligence Service 
: Can she confirm that she knows which foreign Government is behind cyber-attacks on New Zealand Government computer systems but will not say who; if so is her reluctance to name names in any way related to New Zealand’s free-trade talks with China? 
Rt Hon HELEN CLARK (Minister in charge of the NZ Security Intelligence Service) 
: 
 Yes I am kept well briefed on these matters. The answer to the second part of the question is no. 
Keith Locke 
: Does she believe that New Zealanders have the right to know which foreign country is endangering the security of our Government information and that public embarrassment is the best medicine—as it was when she publicly scolded Israel for trying to obtain false New Zealand passports? 
Rt Hon HELEN CLARK 
: No and no. 
Keith Locke 
: Does she think New Zealand can continue to effectively negotiate a free-trade deal with China if the Chinese Government is hacking into our computers and stealing information relevant to our bargaining position? 
Rt Hon HELEN CLARK 
: The New Zealand Government has made no such allegation about China. 
Keith Locke 
: Will the New Zealand Government be joining the Governments of the United States Britain and Germany in protesting to China following allegations at the highest levels of those Governments that they are also being subjected to hacking by Chinese Government authorities? 
Rt Hon HELEN CLARK 
: The latest I have seen is that foreign Governments have declined to accuse China in the way the member says. However their behaviour is entirely a matter for them. We judge what is appropriate for us when it comes to considering who is behind such attacks. 
Nandor Tanczos 
: Why does the Government continue to rely on Microsoft products in Government departments and in Parliament when Microsoft is notoriously prone to security breaches; and when will we begin to see consideration given to open-source software that is more secure more cost-effective and anti-monopolistic? 
Rt Hon HELEN CLARK 
: Madam Speaker that might be a question more relevantly directed at you as Speaker. I am not responsible for the software used in Parliament. 
Rt Hon Winston Peters 
: Why does the Government not advise the Greens that the Chinese Government is still communist which will then enable Mr Locke to change his mind and start supporting the present regime? 
Rt Hon HELEN CLARK 
: As far as I am aware the Chinese Government describes itself as “communist with Chinese characteristics”. 
Keith Locke 
: I seek leave to table three documents. The first is from  
The Times 
 of 27 August and is headed: “China accused of hacking into— 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? Yes there is. 
Keith Locke 
: I seek leave to table the second document also from  
The Times 
 dated 6 September headed: “China ‘tops list’ of cyber-hackers seeking UK government secrets.” 
Madam SPEAKER 
: Leave is sought to table that. Is there any objection? Yes there is. 
Keith Locke 
: The third document is from  
domain-B 
 magazine 10 September and is headed: “Chinese military hacked into US defence secretary’s office”. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? Yes there is. 
Television New Zealand—Revenue Decline 
12.  
Dr JONATHAN COLEMAN (National—Northcote) 
 to the  
Minister of Broadcasting 
: What steps has he taken to assure himself that Television New Zealand’s strategy will reverse the company’s decline in revenue following the announcement of the company’s worst ever financial result? 
Hon STEVE MAHAREY (Minister of Broadcasting) 
: 
 As people will know Television New Zealand (TVNZ) has developed a 5-year strategic plan. Sir John Anderson the board and the management have assured me that this plan will return TVNZ to profitability. The chief executive confirmed this on Radio New Zealand National yesterday when he said that the issues that had led to the loss have been addressed and TVNZ is confident of returning the company to good solid profits. 
Dr Jonathan Coleman 
: Does the Minister really expect the public to believe his explanation in the House yesterday that TVNZ revenues will be increased by its moving to digital cutting costs looking for new ways to source revenue and launching a plan to reach New Zealanders on every screen; if so how exactly will the business model work or are the mere financial details beneath him? 
Hon STEVE MAHAREY 
: Yes. 
Maryan Street 
: Has the Minister seen any reports on the relative performance of TVNZ since 2003? 
Hon STEVE MAHAREY 
: Yes I have. Yesterday Dr Coleman put out a press release on its performance between 2003 and 2007 in which he made a number of fundamental mistakes. He did not notice for example that there had been a separation of TVNZ and Transmission Holdings in 2004. He showed he does not understand the difference between shareholders’ equity and company value. He said that TVNZ launching two new channels was a strange thing to do when every public broadcaster in the world is going into a multi-channel environment. He also did not acknowledge that in the 1990s National sold off Sky shares—a major mistake—bled the organisation through rates of return of 23 percent on average and prepared it for sale. All of that was absent from his press release and that shows that it would be a really good thing if he talked to people around the sector about how it operates. 
Dr Jonathan Coleman 
: Why when the Minister has just admitted that the mere financial details are beneath him is he blaming TVNZ’s financial difficulties on audience fragmentation and changes in technology when the reality is that over the same period that he has managed to halve the value of TVNZ and reduce its revenue by $120 million TV3 competing in exactly the same market has actually grown its revenue and increased its value? 
Hon STEVE MAHAREY 
: I can only say that the member needs to go and talk to people in the sector. If a company is split in half as TVNZ was then half of the value goes off into Transmission Holdings and half stays with TVNZ. I think that changes the value of the company. TV3—to take another of the member’s questions—is a company that focuses largely on the 18 to 34 demographic in the Auckland market. TVNZ focuses on the whole country and on all demographics. That changes the fundamentals of both companies. 
Dr Jonathan Coleman 
: How does the Minister explain that on his watch last year TVNZ turned a $34 million taxpayer investment into a $4.5 million loss—its first ever—and how can he possibly think that that represents a good return for the New Zealand public? 
Hon STEVE MAHAREY 
: Apart from the fact that this Government is not preparing the company for sale as the previous National Government was I would say that the chief executive explained it extremely well. I know that issues like the fragmentation of the audience the reduction of the amount advertising available the changes in the nature of analog broadcasting and the need to move to digital are beneath the member but they are very important to all broadcasters and I am sure that if the member visits them they will help him understand that. 
Dr Jonathan Coleman 
: Would the Minister outline for the House what his charter has actually delivered for the New Zealand public apart from a $4.5 million loss the halving of TVNZ’s value a $120 million slump in advertising revenue and  
Dancing with the Stars 
 which according to Rick Ellis is a charter programme but according to Michael Cullen is not? 
Hon Dr Michael Cullen 
: It had Rodney Hide on it. 
Hon STEVE MAHAREY 
: Dr Cullen was just observing that it was just one participant who he thought was not up to the charter. I can point to TVNZ’s regionalisation of its news; its internationalisation of its news by putting journalists overseas; its higher presence of Maori and Pacific programming; its greater number of broadcasts with local content; its rising number of documentaries; its buying high-quality overseas programmes; its 5½ hours of coverage—a fantastic operation—of the Maori Queen’s funeral; and mainstream television’s adoption of Maori language. I could go on and on. There is its programme in schools. There is its work with independent producers of programmes. It is not a bad record really. 
Dr Jonathan Coleman 
: Now that the Minister has reduced the value of TVNZ by half during his tenure does he reckon he has got time to chew through the other half before the 2008 election or will he need another term as Minister to bring the value down to zero? 
Hon STEVE MAHAREY 
: The member can guarantee that we will have another term; that is something I want to say to the member. I imagine that during that time National will reinstate Maurice Williamson as spokesperson; at least he understood something about the portfolio and he is probably sitting there cringing right now. But I go back to something very simple: if a company that used to have both TVNZ and Transmission Holdings in it is split its value will change quite substantially. 
Judith Collins 
: I seek leave of the House to table the Government’s plan to bring TVNZ back into profitability. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
General Debate 
Hon PHIL GOFF (Minister of Defence) 
: 
 I move  
That the House take note of miscellaneous business 
. They say that imitation is the most sincere form of flattery. I guess therefore that Labour should be flattered by the National Party’s desperate efforts to snuggle up to Labour on defence and foreign policy. The problem is that an Opposition is meant to oppose; an Opposition is meant to project new and alternative ideas and policies. 
How do we explain the National Party’s position over recent months in these areas? I guess Guyon Espiner got it right the other day in his  
North and South  
article. He said that National so clearly perceived its weakness in defence and foreign policy that it wanted to depoliticise those issues. And it is no wonder: National in Government and in Opposition has consistently shown poor judgment—the poor judgment that until recently let Mr Key and many other members of the National Party say they would have committed New Zealand soldiers to the war in Iraq just as Mr Key’s predecessors three decades earlier had committed New Zealand soldiers to a war in Viet Nam. 
Now the National Party is saying it wants us to believe that it is sincere in its support for a nuclear-free New Zealand. The National Party that I have observed over the last 15 years has flip-flipped flip-flopped and flip-flipped on nuclear-free policy every time it thought it was in its interest to be in favour of nuclear ships or not to be in favour of them. We would not know whether National members were being shallow and dishonest then when they said they were against a nuclear-free New Zealand or whether they are being shallow and dishonest now when they say they are in favour of it. 
Then there is the issue of scrapping the air combat wing. Dr Mapp and Mr McCully have said that Labour’s policy would leave New Zealand undefended—undefended and bludging off its mates. Now they admit that Labour had it right all along. I could not help but notice the comment in the paper the other day from a commentator who asked whether the National Party was now prepared to countenance bludging off its mates and leaving New Zealand unprotected or whether it was admitting that its former rhetoric was hysterical nonsense. Were National members being shallow and dishonest when they were against scrapping the air combat wing or are they being shallow and dishonest now that they have totally flip-flopped on their policy? 
Actually I tend to agree with a columnist in the  
Sunday Star-Times 
 last weekend who said that the showmen and the shallow men of the National Party have replaced the hollow men of the National Party. I think that that is almost right. It is only almost right; we have the showmen and the shallow men—John Key epitomises that—but we still have the hollow men. They are the hollow men who were prepared to take money in secret from the extremists and the fundamentalists. They were prepared to spend that money with the expectation from those groups that they would deliver for those with privilege and those holding fundamentalist viewpoints. 
The truth of the matter is that there is a vacuum of principle there is a vacuum of policy and there is even an absence of analysis in the National Party itself. It is shallow it is expedient and when its members flip-flop one way we cannot even rely on them not to flip-flop in the opposite direction depending on the expediency of the moment. They flip-flop because no policy is anchored in principle and no policy is anchored in philosophy. These are the ultimate shallow and hollow men of New Zealand politics. 
Let us get a few answers from the National Party to some questions. Can those members really believe in climate change one moment when just a moment ago John Key was saying it was a hoax? Did people believe him then or do people believe him now? How shallow was that policy or how dishonest is the change in those members’ stance? And can we believe that they will not cut superannuation? That National Party of which Lockwood Smith was a member said it would scrap the surtax—“no ifs no buts no maybes”. Those members lied they reversed their policy and they did it again. [ 
Interruption 
] I say to Mr English that he did it again in 1999 as Minister of Finance when he cut superannuation. 
JOHN KEY (Leader of the Opposition) 
: 
 We know that when Phil Goff leads off for the Labour Party it is barbecue season again. “Chuck us another lamb chop.” I would say to Mr Goff as I know he has been waiting waiting waiting. But the waiting is coming to an end my friend! Phil Goff sits in his caravan with the Little Lucifer Fire Starters—there he is ready to go. He normally gives quite good speeches but I was tempted to ask for an extension of time; I was not quite sure what would happen. 
It is a very odd Labour Government I have to say when the way to keep one’s job is to text message the Prime Minister from a duty-free shop in Hong Kong saying one does not want it any more. That is the way to keep it. I wonder what the Prime Minister texted back. That is the interesting question. I bet that it was not a resounding vote of support for Damien O’Connor. [ 
Interruption 
] Well exactly. Probably it was: “Pick me up another bottle of Gordon’s gin.”; I am not really quite sure what she texted back. 
 This is the interesting bit. The Prime Minister lectured that Cabinet just a few weeks ago and said that it was time for discipline. That is what she did. She had just fired David Benson-Pope and she said it was time for discipline. Damien O’Connor walked out of that meeting into a briefing in his office where he was told that if he took Mr Morgan—someone who was on suspension from the Department of Corrections—on a rugby trip it might not be a very smart thing to do. What did he do? He took Mr Morgan on the trip—he did not care about the Prime Minister. When he got to Hong Kong on the way back home he decided he had better text in his resignation. 
Well his job is coming to an end—no question about that. The Prime Minister—like the people of New Zealand—has no confidence in Damien O’Connor because this is a man who is overseeing a department that has suffered from a catalogue of failures. Make no mistake New Zealanders have died under the watch of that Minister. The Department of Corrections is an operation where guards are being suspended for contraband and drugs being brought in. This is an operation where they cannot get it right on how much a prison costs—to the nearest $100 million. This is an operation where the Minister thinks it is more important to spend $11 million on landscaping than to spend it on rehabilitating prisoners in order to get them off drug and alcohol issues. This is the man whose best is to text in his resignation and then not tell us for how long his job is safe for. 
The one thing we could say about Damien O’Connor was that he managed to game Helen Clark. He knew she could not accept his resignation because it is not a minor tweaking; it is major open-heart surgery going on over there. This is a Prime Minister who is looking not only for a replacement for Mr O’Connor but for Mr Benson-Pope Mr Burton Mr Barker—and the list goes on and on. It would be Jill Pettis and Russell Fairbrother if they had ever made it to the point where they could be sacked but they have not actually got there yet. That is what is happening over there. The Prime Minister is fishing in a very shallow pond. 
Quite interestingly the  
Otago Daily Times 
 described Labour this week as being past it. The  
Dominion Post 
 editorial said Labour members were people who were out of touch. Well the National Party is in touch. I will tell the House how in touch National is. National has been around the country and this is what one learns when one is around the provinces. I was in Palmerston North last week. It was quite an interesting visit last week. What was interesting about it was this. It turns out that Steve Maharey will not be getting the job as vice-chancellor of Massey University—not because he has not applied for it but because Massey University does not want him. They asked me: “Would you hire him?”. I said: “No I don’t think so. His track record’s not that good.” They said they were not fools there in Palmerston North. They did give me an interesting snippet though. They said: “Don’t worry too much. He’s applied for another job at Waikato University.” 
That is what is happening. The Prime Minister is working out who to sack the front bench is working out how to get out and Damien O’Connor is working out where the Chamber is—we have not seen him since he has come back from England. That is what is happening on that side of the House. 
Helen Clark is now sitting up in her office with a Velcro board trying to work out who is in and who is out. The only problem is that she has got a whole lot more going out than she has got coming in. The great white hope is Shane Jones—and if he is the great white hope it will be interesting. 
Hon RICK BARKER (Minister of Internal Affairs) 
: 
 It is very interesting how the National Party always puts out there its hopes and plans to get rid of Helen Clark—for example by promoting her to the United Nations. The National Party knows that when it comes to stumping it out on the campaign trail it will never have a campaigner who will out-campaign Helen Clark. The best thing that National members can do is hope that she goes away and gets a job somewhere else. It is the same hope that they are putting up for Steve Maharey. 
Talking about plan Bs let us talk about Mr Williamson and his tasteless jokes about obesity and prisoner of war camps. This means that Mr Williamson will be a prime candidate for Minister of Corrections—if National ever ever gets back on to the Treasury benches. As for Mr Brownlee he has had himself a job for a while that was to be his plan B—that is working for a bunch of people trying to tidy up casinos. But unfortunately for Mr Brownlee the two people involved in his company have gone AWOL and have never been seen again—Gerry jumped first. 
When it comes to arguments about what will go on in the future the National Party for a long time was running a campaign of very vicious personal attacks against Helen Clark but its members have now suddenly decided that they do not like personal attacks any more because questions have been raised about the judgment of their leader John Key. The question that has been asked on several occasions is what John Key thought about the Springbok Tour. Well we all know that he says he cannot remember. We all talk about whether John Key was for the war in Iraq. He was for it for a while. Simon Power put out the National policy in favour of the Americans and the British and he said that where they go is where National wants to go. That was until National got such a negative reaction from the public. National members suddenly changed their minds and then had a different policy. That policy was gone by lunchtime as well. 
It is just typical of the National Party’s policy development that it is for things when people are for them and it is against them when everyone else is against them. On the Kyoto Protocol National members thought at the time that the general public were opposed to the protocol. John Key went around and said that climate change was a complete hoax. Another National MP said that it was the worst example of international socialism. Now suddenly because of Al Gore’s movie and other people National realises that it is a very important issue for the future of our planet and it is now in favour of Kyoto. 
On paid parental leave the National MP Anne Tolley said that if National ever got back into power it would scrap it. John Key later said that he thinks he supports paid parental leave. Judith Collins said in the  
Sunday Star-Times 
 that she would have much rather had tax cuts than paid parental leave but recently told the  
New Zealand Herald 
 that she could have done with paid parental leave when she had a little child. So I ask National members which it is—are they in favour of paid parental leave or are they against it? Or will it be like 4 weeks’ annual leave? They opposed it bitterly at the time but suddenly realised that the New Zealand public wanted to have 4 weeks’ annual leave and they are now in favour of it. Is it going to be like KiwiSaver? National opposed KiwiSaver bitterly at the time but now because the general public thinks it is a great idea National is in favour of it. 
If we want some more flip-flops from the National Party what about the combat wing? We had a long period of rhetoric where the National Party claimed that New Zealand under Labour had gone soft on its responsibilities and should have had what it claimed to be a balanced strike force and that if we did not have this we were bludging on our mates. Now the National Party has come around and said that it will not reinstate the combat wing. 
How believable is the National Party on any of its policies? The National Party did everything it could to oppose the nuclear-free policy but now it has suddenly decided that the general public seems to like it so it is in favour of it. The National Party has no credibility on any of these policies whatsoever. The last one which I thought was a classic was on foreign policy. The National Party has recently gone on the record as saying that there is not much difference really between National and Labour on foreign policy and that in fact the National Party basically agrees with Labour. So I ask the National Party which it is. Is it going to have some policy before the next election or not? Is it going to have policies that it will oppose the Government on on a point of principle on a point of argument and on the point of having a logical reason for being in such a position? 
We had a very good example in the House this afternoon when Steve Maharey challenged the National Party spokesperson on education to have a policy. We have not heard one at all. What does the National Party’s website have relating to justice? There is a blank space. There is nothing. What it has is a statement that it would like to hear people’s ideas and asks them to send an email. That is the National Party’s position. It does not have any ideas. It likes to steal the Labour Party’s ideas. But when the public comes to a view that this is what they really support National will agree with that too. The National Party has no ideas so it is going to take up the challenge at the next election. It is going to be confronted by an energised Labour Party full of ideas and full of policy. 
SIMON POWER (National—Rangitikei) 
: 
 That member was the Hon Rick Barker who was making his last desperate bid to remain in Cabinet following the reshuffle that is to come for the Labour Government. How do we know that the lobbying for the reshuffle has begun? We know that because when Helen Clark was out of the country at APEC David Cunliffe was driving into service stations in the dead of night and filling up liquefied petroleum gas tanks for Phil Goff’s barbecue. He was too scared to do that while the Prime Minister was in the country but he will be right there with Phil Goff if the time comes. We know that the reshuffle is already creating all sorts of lobbying in the corridors amongst the Labour MPs. We know that they are desperate to have their last dying days in Cabinet if they can. I thought it would be a useful use of my time in this debate to help out some of those Labour MPs by making some predictions from this side of the House as to what is going to happen in the reshuffle. 
We know that after a prison overspend the Graham Burton tragedy and the death of young Liam Ashley Damien O’Connor is gone. We do know that he was smart enough on advice from the right-wing faction of the Labour caucus to offer his resignation to the Prime Minister by text from Hong Kong to ensure that it placed her in a tricky position in respect of removing him from Cabinet overall. That will be interesting to watch. Mark Burton too is gone. He is a Minister who was too slow to recognise that he was being set up as the front person on the Electoral Finance Bill to give the leadership around Helen Clark enough excuse to shift him on. He has effectively paved his own way to the exit door; he did not see that one coming down the road. Rick Barker whom we have just heard from has lost his seat and his swagger. He used to walk into the debating chamber full of confidence. He is a broken sad man now. 
What do all three of those Ministers have in common? They are all from the justice sector: the Minister for Courts the Minister of Justice and the Minister of Corrections. It is a land of opportunity for people like Parekura Horomia who has decided that keeping a low profile will help him to slip through the reshuffle unnoticed and retain his current position. 
Pete Hodgson knows that he is gone from the health portfolio. He is the only Minister of Health who while patients are lying on trolleys in corridors at North Shore Hospital has time to go around digging up non-existent dirt on John Key. It makes us realise just how smart Paul Swain and Marian Hobbs were after all. They saw it all coming from well down the road and decided they would get out of Cabinet. We know the situation is becoming vicious inside the Labour caucus at the moment. We know that the lobbying is frantic. But members should not rely on my word; they should rely on the words of that helpful fellow Mike Moore. He was helpful enough to say recently: “This politics of personal destruction is fearful. Why is Labour so good at it? Because we practise on each other.” That is exactly what is occurring right now in the back corridors of the Labour caucus. Mike Moore described the banning of advertising in election year as sinister and even gave his old friend Phil Goff a bit of a nudge when he said: “Even the normally sensible Phil Goff has joined the chorus hoping to ingratiate himself with left-wing MPs for later.” 
Where does the talent lie? Who is coming in in this Cabinet reshuffle? Well it might have been Clayton Cosgrove before his old mate Mike Moore decided to make his comments in the media. We know that Maryan Street may not be told to wait for just one more adjournment as she has been told all year long. It is the same with Shane Jones. His philosophy is to say nothing and get promoted and it seems to be working for him today. I have some advice for my colleague and friend Darren Hughes. I say he should concentrate on winning Otaki and not worry about the Cabinet reshuffle. He should concentrate on that. 
The real question though is: will the Prime Minister deal to the front bench or will we keep seeing on TV the sad tired faces that represent the defeated few? Can the Prime Minister afford to mix it with the factions and upset those along the front bench who represent the faces that the public have had a gutsful of? But deep talent lurks further back in Labour. We have noticed Harry Duynhoven’s frenetic activity during question time recently. He has taken more points of order than Michael Cullen over the last three or four days. He is obviously mastering his skills in the House in order to be ready for a shift up along with the likes of Dave Hereora Mita Ririnui Martin Gallagher and Moana Mackey. 
MARYAN STREET (Labour) 
: 
 I have absolutely no interest in responding to the inane the fatuous and the superficial comments from the Opposition. The two contributions to the debate that we have heard from the Opposition—from Mr Key and from Mr Power—demonstrate that National still has a vacuum where its policy ought to be. This Labour-led Government is keen on and committed to getting on with the business of governing which is something that that party in Opposition has no collective memory of and will have no chance of doing. We are keen to advance our policies and the innovations that continue to promote well-being and to advance the living standards of New Zealanders all over the country. 
I want to talk particularly about health. I want to draw attention in the very few minutes I have to some of the things that have been the standout gains in the last few years in the Labour-led Government and to some of the things that have happened in the last month alone that demonstrate how this Government is going forward and progressing in order to make things better for New Zealanders. 
Let me identify a few key points. First of all since 1999 since we have been in Government there have been an additional 4000 nurses an additional 1400 medical personnel and an additional 675 allied health professionals. We have provided a historic pay increase—some $549 million over 4 years—to build and maintain our workforce of nurses. We have undertaken the single largest hospital building programme in living memory with 28 new public hospitals from Kaitaia to Invercargill. Over $2.2 billion has already been committed. When completed that will add another 22 new operating theatres. 
We have undertaken the largest mass immunisation campaign in New Zealand’s history and lowered the number of new cases of meningococcal B by 57 percent. We have halved average doctors’ fees and that matters to New Zealand families. We have reduced the cost of medicines to no more than $3 per prescription item and that matters to New Zealand families. We have provided 7500 extra cataract operations. We have provided another 10000 extra hip and knee replacement procedures. We have provided an additional 10000 New Zealanders a year with elective surgery costing $200 million over 4 years. 
The Opposition has gone very quiet because it knows these things are true. Opposition members will not tell us whether they would maintain the same level of commitment and financing of the health portfolio that allows these advances to be made for New Zealanders. They will not commit to that because they know that their real policy which they have not released to the public consists of public health spending cuts. In fact they go on about it all the time. It is the only thing they have put up by way of health policy—that there would be cuts to expenditure in the health budget. That is what they promise and that is what we can guarantee they will deliver should they ever unfortunately be in the position to do so. 
I also point out that in the last month alone the Government has made a couple of announcements and advanced a couple of policies that indicate we are still on the case. This Government will not rest. It will continue to improve things for New Zealanders and New Zealand families. Making doctors’ visits free for under-6-year-olds matters to New Zealand families. We have introduced before-school checks for 4 and 5-year-olds so that any problems for those kids can be identified and sorted out before they start school. Those are two major things just in the last month that identify this Government’s onward push to ensure that we are improving the lot of families and New Zealanders. This Government is eager to get on and do the business. We will not be distracted from that by fatuous contributions from the Opposition that contain no policy. 
R DOUG WOOLERTON (NZ First) 
: 
 As some people in this House probably know many years ago when one did not have much choice I used to belong to the National Party. I did reasonably well in the National Party. I was privy to a lot of discussions a lot of problems and a lot of solutions but today National members have a problem that they will have to put their best money minds to. I know that Shane Jones is no slug in this department so even he may be asked to help National members with this problem. 
The question they have to answer and the conundrum they have is how they will fit a $5 million war chest into a $2.5 million spending cap—not only that but a spending cap lasting 11 months. The question we must ask ourselves is whether they will spend some of the $5 million this year. 
Dr the Hon Lockwood Smith 
: When is New Zealand First paying back the taxpayers’ money? 
R DOUG WOOLERTON 
: I am pleased that Dr Lockwood Smith brought that up. I can tell him that in New Zealand First we know how much money National spent. We also know how much public money National spent and we will tell the people of New Zealand before the next election. 
I can tell everybody in this House and those further afield that no party in this House spent more money at the last election than the National Party did. Everybody knows that. 
Dr the Hon Lockwood Smith 
: Labour did. 
R DOUG WOOLERTON 
: I am talking about public money. No party in this Parliament spent more public money at the last election than the National Party did and the party knows that. 
Will we see the billboard campaign start in October 2007 November 2007 or when? National has a problem because if the Electoral Finance Bill goes ahead National cannot spend its war chest in the 11 months leading up to the next election. That is why we hear Mr English asking all the dumb questions. He knows there is no answer to those questions and that he is not correct. 
Back behind the scenes all the boys with the money brains are working out how to fix this problem. Quite obviously they intend as they did in the last election that some of the money will go to the Maxim Institute. 
How much will National spend towards the end of this year? The Brethren are a little bit out of favour so National will find another name to spend some of that money on. National will give money to the Brethren rather than the other way around but it has plenty so it is not a problem. 
That will be the question at the next election. I am making this speech so that everybody knows that that is what is behind Bill English’s questions to the Minister Mark Burton. It is not about free speech. It is not about free speech at all; it is about how the National Party spends its huge war chest. 
I believe that National has a problem that even the likes of Chris Finlayson could not finesse a way out of. The greatest art in the National Party is spending excessive amounts of money legally. It may not be morally right it may not be what the public expects it to do and it is certainly not what other parties such as ourselves expect it to do but National is an expert at it and it will find a way around this problem as best it can. 
Personally I doubt whether National can get rid of that $5 million at the next election but it will get rid of a lot more than the $2.5 million it is allowed to spend under the spending cap that applies to us all. It will be interesting to watch National members on that issue. 
I say to the public and to people who are thinking about giving the National Party money: “Don’t worry about it. Forget about it. It is a waste of time. They have heaps already. They have money they cannot possibly spend before the next election.” I say to people that they should do themselves a favour and give the money to New Zealand First. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 It must be pretty caustic in the Labour caucus these days. What Mike Moore had to say in the last few days about a reshuffle was: “It’s needed.” Those were his words. It is interesting to read what Mike Moore said. I guess that he knows what goes on inside Labour. He did not say that Helen Clark is planning a major reshuffle. His words were that Labour was planning a major reshuffle. We have to ask ourselves whether that is coded language for the fact that there is more on in Labour at the moment than just whether Helen Clark will reshuffle her favourites in Cabinet or whether in fact the knives are out. With Phil Goff leading off the debate today we have to ask ourselves whether the knives are finally coming out in preparation for a bigger reshuffle. If Mike Moore had meant that Helen Clark was planning a reshuffle he would have said it. 
If there is to be a real spill in Labour we are told that the big pretenders for Helen Clark’s role are Steve Maharey and Phil Goff. Well we know that Steve Maharey applied for a job at Massey University and did not get it. Mind you I could have told colleagues that he would not get it. Massey is not that dumb. After having spent 7 years of my life at Massey University and getting to know a few of the people around that place I know there is no way Steve Maharey would get that job. There is now a new term around this place. It is known as the “Maharey touch”. In our young days we all heard about the Midas touch which was that anything one touched turned to gold. The “Maharey touch” is the antithesis of that. Steve Maharey has screwed up every role that he has had in this Parliament since becoming a Minister. 
 Look at what Steve Maharey did when he was Minister in charge of tertiary education. He set up that massive Tertiary Education Commission with 400 people employed. They do the same job—only a lot worse—that I used to do with just 15 officials. He has hundreds—to do the job worse! Now what do we have in the wider education sector? We have promises of 20 hours’ free education and a 1:15 teacher to pupil ratio. He is screwing up the lot. That is Steve Maharey—Waikato is welcome to him! What this means is that he is not the one. Clearly Steve Maharey is trying to get out of the place. 
He is not the one; Phil Goff is the one. He is the one whom Helen Clark has got to watch and we have known that for a long time. Of course there are some things this Parliament should know about Phil Goff because Phil Goff was a Minister when Labour was last heading out of office. When Labour looked at the fact that it was going to lose the election in 1990 Phil Goff was Minister of Education. This is very topical right now with the Electoral Finance Bill before the Parliament and I remind the House what the Hon Phil Goff—aspirant to the leadership of the Labour Party right now—did in the lead-up to the 1990 election when he was Minister of Education in the days before we had a Fiscal Responsibility Act. What Phil Goff did was direct his officials at the Ministry of Education to spend money illegally—to spend money for which there was no appropriation from this Parliament to spend. That is the equivalent of spending money illegally. 
The officials at the Ministry of Education were so concerned about being directed by their Minister to spend money for which there was no parliamentary appropriation that they went and saw Treasury and the Audit Office to make sure the ministry covered its back in spending money. The ministry was directed by the Hon Phil Goff to spend a whole lot of money on schools—millions of dollars—to try to buy votes. That was what the Hon Phil Goff did leading up to the 1990 election when he was Minister of Education. What the Hon Phil Goff then did was direct the Ministry of Education to spend $20 million on capital works in polytechnics for which there was no appropriation. How do I know this? I know because I took over as the Minister of Education from the Hon Phil Goff—aspirant to the leadership of the Labour Party. The very first thing was that the Ministry of Education’s financial controller—a guy called John Gill—came to see me to tell me how Phil Goff had been directing the ministry to spend unappropriated money. 
LESLEY SOPER (Labour) 
: 
 It is like being pelted by popcorn from the National Party benches when we hear a speech like that from one of the failed old front-bench members of the National Party. Those National members spend so much time bouncing from insubstantial cloud to insubstantial cloud trying to think of ways to justify the latest flip-flop. Let us look at the latest flip-flops. Well National has adopted Labour’s defence policy and it has adopted our foreign policy. It would have sent troops to Iraq—no it would not send troops to Iraq after all. It would raise the age of eligibility for superannuation—no it would not after all. It would get rid of the Ministry of Women’s Affairs—no it would give the ministry more teeth. 
National members spend so much time on trying to think of another excuse for having not even one little new policy idea of their own let alone any new big policy idea of their own. They spend so much time on reviving the hollow policies of the National Party past—like Work for the Dole under Mrs Collins tax cuts that would rob the family incomes of the 160000 families receiving the Working for Families package failed privatisation policies for accident compensation and the health system failed bulk funding for the education system and National’s desire to gut the Resource Management Act. Every time members opposite get to their feet and try to play the man and not the ball—just as Dr Lockwood Smith has done—they show they have no credibility whatsoever and nothing substantial to offer and they might as well continue to go on bouncing from cloud to cloud. 
On the other hand the Labour-led Government is getting on with the business. We are looking for the new issues. We are about delivery and have been since we became the Government in 1999. We are about improving the lives of all New Zealanders and we are about keeping our word. That means the Working for Families package for 160000 families. That means over 360000 more people in jobs than when we became the Government in 1999—something the National Party does not like to acknowledge. That means an unemployment rate of 3.6 percent—the equal-lowest since records started. That means 1000 youth-unemployed as a result of our policies compared with 18000 unemployed 18 and 19-year-olds when National was in Government. That is delivery and that is what the National Party does not like to acknowledge. 
It does not want to acknowledge that we have been a successful long-term Government with a brilliant leader and a brilliant front-bench that delivers. That delivery on policies means things like thousands of Modern Apprentices under the Modern Apprenticeships scheme—the answer to a National Government that destroyed the apprenticeship system. That means industry training schemes that deliver. That means extra funding for free doctors’ visits for under-sixes—something the former National Government failed to deliver to any point in the health system. That means the building of new hospitals under this Government—there is one in my electorate of Invercargill which I am very proud of having been a part of. It was delivered on budget and on time. 
These are things the National Party knows nothing about because it is not interested in delivery. It is interested in nothing but trying to play the man not the ball. It is interested in cheap shots. It is interested in insubstantial jumping from cloud to cloud and getting nowhere. The electorate of this country has begun to recognise there is nothing substantial in this policy. Every day people tell me that “our” Government—and New Zealanders regard this Government as “our” Government; the Government they can relate to which has delivered to them—will win next year and win well. This insubstantial popcorn throwing from the Opposition benches is exactly that—insubstantial little ideas. 
CHRISTOPHER FINLAYSON (National) 
: 
 What an honour and a thrill it is to follow Lesley Soper this afternoon! I must say I always find the general debate a rather strange parliamentary ritual when for an hour MPs stand and yell and scream at one another—none more so than the Minister of Defence who stands in this House and for 5 minutes hyperventilates with veins in his neck popping while he recounts some misdeeds apparently committed by the National Party in the days of Sid Holland and Keith Holyoake. 
Well I do not intend to hyperventilate or ululate or bellow or scream this afternoon but just rather quietly assess the performance of some of Helen Clark’s Ministers. Nor am I going to spend too much time on Mike Moore because there is nothing new in Mike Moore’s comments. Everything is as it should be in the Labour Party where hatred is the norm. Ancient and modern hatreds in the Labour Party are always amusing to observe or read about. We know that John A Lee hated Savage the left of the Labour Party hated Fraser Kirk hated Nordmeyer Rowling hated Lange Lange hated Helen Clark Helen Clark hates Mike Moore Mike Moore hates Helen Clark and everyone hates Jim Anderton. 
 Let us look at the Government’s justice team because it is the most ineffective team in decades and its responsibilities are grave indeed. I have always been generous when I have spoken about previous Labour lawyers. I have said that Rex Mason was a good Attorney-General and Minister of Justice for 17 years. Martyn Finlay did some good work between 1972 and 1975. Geoffrey Palmer—the de facto Minister of Justice today—was an enthusiastic Attorney-General and Minister of Justice in David Lange’s Cabinet. David Lange himself was a distinguished Attorney-General between 1989 and 1990. Indeed in the Lange-Palmer administration there were some good lawyers—people like Richard Prebble David Caygill dear old Frank O’Flynn Bill Jeffries and Trevor de Cleene. They were serious legal minds whom one respected even if on occasion one disagreed with them. But let us take a look at Helen Clark’s justice team. 
First we start with the Attorney-General who in the critical question of the Electoral Finance Bill has failed to act as an independent and fearless law officer by providing that all-important report under section 7 of the New Zealand Bill of Rights Act. Loyalty to party is more important to our Attorney-General than loyalty to democracy. 
Then there is the Minister of Justice. Lenin once described some of his lackeys as “useful idiots”. When he tired of them it was off to the Gulag or the grave. The bewildered member for Taupo Mark Burton is nothing more than a fall guy for the Prime Minister. Day after day he goes out to bat for the Government in this Chamber only to find that his captain has broken his bat. Constantly humiliated by my deputy leader the poor chap is out of his depth. He talks daily—as he did again this afternoon—about the need for elections to be a contest of ideas but he has never had an original idea in his entire political career. I put it to the Labour members sitting opposite to give me an example of one original idea that Mr Burton has had. I tell them I will make it easy for them. They can refer to any idea in any portfolio the man has held: tourism Treaty negotiations local government or justice. Is there just one example from Mr Swain? There is silence. Mr Burton will be gone in a fortnight. 
Then there is the Minister of Corrections who will soon be out of his job and next year will lose his seat to Chris Auchinvole. Others have commented on his performance this afternoon and as I am feeling charitable I will leave it at that. The Minister for Courts is next. Courts is an extremely important portfolio. An efficient court system is a fundamental ingredient of our justice system yet the Minister Rick Barker has no answers—he does not even know what the issues are. Finally in this star-studded line-up there is the member for Waimakariri Clayton Cosgrove and there is the Hon Mita Ririnui—enough said about them. 
The area of justice needs urgent reform in a number of areas and Labour’s justice team is simply not the team to address them. At the end of the day it is the fault of the Prime Minister. She has always placed a premium on loyalty rather than on talent and experience. She is now reaping the reward of her years of selfish leadership of the party and of stuffing her party caucus full of social workers and trade unionists. Loyalty and subservience are qualities to be desired more than talent and experience. Next year the Prime Minister will find out the cost of those omissions. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Tena koe Mr Assistant Speaker. Tena tatou katoa e te Whare. I apologise for breaking with tradition but instead of using this general debate to slag off others in this House I would like to take the opportunity to recognise a man who has played a critical role in the Maori renaissance here in Aotearoa. 
Some years back I was asked who had had a big influence on my life. I started thinking about it and ended up with a huge list which I had to cut back so that I did not look like some dork who needed everybody else to run his life for him. I ended up with these people: my mum Titewhai because she will always be my mum and for her total commitment to all her whanau; my wife Hilda who hates my saying so but is everything to me; Nelson Mandela who proved that if one’s spirit is strong then not even 27 years in jail can break it; Muhammad Ali for being young incredibly gifted and proud to be black; Maori Marsden who taught me that being Maori is a gift to be thankful for every day of my life; and Syd Jackson who taught me that if we believe in something then we should not let anyone set us aside from that belief. 
Last week we buried Syd Jackson at his home marae Matahiwi which is down Hastings way. Here is my poroporoaki to him. 
Syd Jackson was a founding member of Nga Tamatoa which people of my generation or older will remember as that radical Maori group that back in the 1970s fought for Maori to be taught in schools and that dared to say that Maori had Treaty rights. Back then Pakeha people all round the country hated Syd—and so too did a whole heap of Maori just quietly. But Syd was never cowed by that. He would always say that Aotearoa is Maori land and he would argue his point with anyone anywhere. He never ever took a backward step. 
Syd never voted either because he did not believe in Parliament. I suspect I was a bit of a disappointment to him probably saved from absolute condemnation in his eyes only by my comments about John Howard and my visit to Alice Springs to visit our Aboriginal cousins. 
Syd made being Maori highly educated and fearless his trademark. He dominated university life and gave up any hope of a glittering corporate career in order to fight for Maori rights. His Maori was hopeless but he fought for the language so that others might benefit from knowing its beauty. He marched to Waitangi when Maori were afraid to talk about it publicly. He put his freedom on the line in land occupations at Raglan and Bastion Point. He worked tirelessly within the trade union movement. He hosted the  
Liberation Talkback 
 show on Radio Waatea for years. He helped to build Turuki Health Care into a powerful health provider in South Auckland. 
For all of that Syd Jackson was my hero. And now his life is over. The funny thing though is that I am happy he died. He gave his all when he was with us—100 percent every single day of his life. Even when his body was being eaten up by cancer his mind was always sharp and his politics never wavered. I am happy for him that the pain has gone and that his wairua can return to those others who have gone before him—people like Eva Rickard Hana Te Hemara Tom Poata Eddie Hawk and many many others. 
No reira e te rangatira haere. Hoki atu ki a ratou e tatari ana kia kite ano hoki i a koe. Ano ra e te rangatira haere haere hoki atu ra. Our lives are brighter for his having lived amongst us. Tena koe Mr Assistant Speaker. Kia ora tatou katoa. 
KATE WILKINSON (National) 
: 
 Mike Moore said it all did he not? Mike Moore said it all. Members should listen to this: “This politics of personal destruction is fearful. Why is Labour so good at it? Because we practise on each other. Helen Clark is superb at it…she’s dispatched more Labour leaders than anyone else too. Now Labour is planning a major re-shuffle. It’s needed.” But it gets better. He also said: “We have the largest Cabinet in the Western world per head of population. Killing the wounded is the hardest job in politics particularly if they have been loyal subjects. They are bled slowly swirling rumours appear planted from Beehive sources then when the victim is anaemic too exhausted to fight back someone is dispatched to put the pillow over their head.” Mr Moore continues that it is very hard and that the circle of close mates gets smaller and weaker and he asks: “Exactly what does the ‘consort’ Judith Tizard and the legion of Ministers outside Cabinet actually do? Perhaps it’s good they don’t do much. They manage the remarkable feat of being self-important expensive trivial and irrelevant at the same time.” 
 While all this is happening Rome is burning. Just look at our justice system. I appreciate that the Minister is probably preoccupied with the obsession to bring in what has been described as the second of the most self-serving bills in history to enter this House. The first was this Labour-led Government retrospectively legalising and validating its own unlawful overspending of taxpayer money at the last election. That was the first. That was reprehensible enough. The second is the undemocratic also reprehensible Electoral Finance Bill to take away New Zealanders’ rights of freedom of speech at the same time as giving this Labour-led Government carte blanche to spend whatever it wants of taxpayers’ money and to say whatever it wants yet at the same time deprive New Zealanders and community groups of their rights to spend what they want of their own money and deprive them of the right to say what they want. That is absolutely reprehensible and it is a disgrace to the democracy of this country. 
While this is happening Rome is still burning. The justice system is in disarray. Only last week the Auckland District Law Society said this: “Of note were his concerns at a justice system particularly in regard to civil work that is almost grinding to a halt because of unreasonable delays. It is of huge concern … that in all aspects of our work that we hear the same and continuing concerns that access to justice is not being provided in our community either because of the barrier of legal aid or a justice system that is not able to effectively and efficiently deal with people’s cases—and that is a serious concern because it impacts on peoples’ lives.” 
While this is happening the Minister is fiddling. We have a legal aid crisis and the Minister fiddles. We have had a legal aid crisis that the Minister has known about for months and months and still he hides his head in the sand. We have fewer and fewer lawyers doing legal aid work. Family aid lawyers have dwindled from 2000 to 1000 in 12 months and still this Minister does not recognise that. We have more and more examples of victims—battered women unable to get legal representation and unable to get access to justice and who find the process simply too hard and just walk away from the process. That is what is happening in Blenheim as an example. We have criminals charged and let out on bail because the court logjam means they will not get a trial date for over a year. We have the trifecta of the justice team of the Labour Government—three Ministers—all fiddling away whilst our justice system burns. There is a priority for this Government and it should be the justice system and not the persecution of the Opposition. 
KEITH LOCKE (Green) 
: 
 It is disturbing to see our Government so scared of offending the Chinese Government even when its officials are hacking into our own Government computers. There does not seem to be any question that this is the case. The head of the Security Intelligence Service Warren Tucker virtually said as much in an interview published in the  
Dominion Post 
 yesterday when he referred to the hacking in the context of comments by Canada’s security service about Chinese spying. Then we have high officials in Britain Germany and the United States all reporting Chinese hacking of Government computers such as that of the US Defense Secretary’s office. 
Today I asked the Prime Minister a series of questions on the hacking issue and did not get anything back that would be very useful to New Zealanders. I asked her whether she believed New Zealanders have a right to know which foreign country is endangering the security of our Government information and that public embarrassment is the best medicine for this—as when she publicly scolded Israel for trying to obtain false New Zealand passports. She dodged that question. Once again the New Zealand Government has shown weakness before the size and economic power of China—the same sort of weakness we saw most recently when Cabinet Ministers were forbidden from officially meeting the Dalai Lama for fear of upsetting the Chinese Government. I simply cannot fathom how displaying such weakness before the Chinese Government helps us to negotiate a good trade agreement. 
As I asked in another of my questions today how does the Prime Minister think New Zealand can continue to effectively negotiate a free-trade deal with China in good faith if the Chinese Government is hacking into our computers and stealing information relevant to our bargaining position? Yes we have to protect Government computers and the Greens congratulate those New Zealand Government officials who have been detecting hacking attempts from the Chinese. As I said in my last question today we can join with the US British and German Governments in protesting this hacking. But such cross-country action is somewhat undermined by the extensive electronic spying on other nations done by the United States—in particular through the National Security Agency backed up by the four other Anglo nations in the Echelon network Britain Australia Canada and New Zealand. 
Every day the satellite communications interception station at Waihopai draws down off two communication satellites over the Pacific equator the details on millions of phone calls faxes and emails which are filtered for key words and addresses mainly for the benefit of the US National Security Agency. It would be much better if we in New Zealand had clean hands as a small independent nation in the world. We would have much more of a moral case against Chinese hacking. It would be good if our Government Communications Security Bureau concentrated on defending our computers rather than using most of its resources spying for the National Security Agency as it does now. 
Chinese hacking is part of a larger attack on privacy and human rights which is mainly directed at its own citizens. Unfortunately our Government says little in public on this. I was privileged yesterday to host a parliamentary forum of experts on these matters—particularly David Kilgour a former Canadian MP and former Canadian Secretary of State (Asia-Pacific) and a prominent Canadian human rights lawyer David Matas. They have produced a pamphlet entitled  
Bloody Harvest: A Revised Report into Allegations of Organ Harvesting of Falun Gong Practitioners in China 
 which scientifically proves the gruesome sale of organs from executed prisoners—and China has the world record for executions something like 10000 a year according to Amnesty International. Proper figures are not made available by the Chinese Government. Huge fortunes are being made by army officers and very sick medical professionals out of this horrific trade in organs. 
New Zealand has a duty to be part of the world response to the large-scale violation of human rights in China—particularly leading up to the Olympic Games in a period when the Chinese Government is particularly susceptible to Government embarrassment. Our Government has to be more outspoken about the executions the organ harvesting the presence of around 250000 people in the Chinese gulag—many of them dissidents and Falun Gong practitioners—and the gross censorship of the news media and the Internet. Standing up for human rights in China is also the most effective way to combat that Government’s hacking of our computers. 
The debate having concluded the motion lapsed. 
Securities (Local Authority Exemption) Amendment Bill 
First Reading 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I move  
That the Securities (Local Authority Exemption) Amendment Bill be now read a first time. 
 I intend that this bill be referred to the Commerce Committee at the appropriate time. The bill provides for the inclusion of an exemption for local authorities from section 5 of the Securities Act 1978. The exemption will again allow local authorities to meet reduced disclosure requirements when offering debt securities to the public. Local authorities will have to produce an investment statement with a certificate of compliance signed by two councillors rather than an investment statement and a prospectus signed off by all councillors of the local authority. Regulation 17 of the Securities Regulations provides assurance that the information disclosed in an investment statement is an adequate and accurate account of the specific issue on offer. However full accountability for the funding decision and associated process involved with making an offer to the public rests with the local authority as a whole. A similar disclosure exemption for local authorities was repealed in 1996 with effect from 1998—who was in Government then? I cannot remember—in order to make local authorities subject to the same obligations as companies and other corporate entities. 
This theoretical level playing field did not take into account differences in the respective legal frameworks of the organisations and that had the effect of seeing local authorities withdraw from the public debt securities market. Only one local authority—Auckland City Council—has issued debt securities to the public since that time. That has occurred because the costs associated with preparing a prospectus can be disproportionate to the amount being sought and therefore prohibitive and because the signature and liabilities provisions do not suit the legal framework of a local authority where an elected member is not liable at law for decisions and actions he or she does not support. 
The principle of collective responsibility under which company directors tend to operate simply does not exist within local government. Nor did the theoretical level playing field approach take into account the significant differences in the reporting regimes of local authorities and corporate entities. Consideration of the level of disclosure that local authorities currently operate under with regard to their finances plans and prospects shows that the issuer-related information required in the prospectus is readily available in the public arena. The reality is that the status quo imposes unnecessary compliance costs on local government—I am sure the Opposition will want to remove unnecessary compliance costs on local government—and effectively prevents it from capital raising in a cost-effective manner. 
The broad policy objective of the Securities Act is to promote investor confidence in the capital markets. The information disclosure regime in the Act seeks to achieve that policy objective by ensuring that investors receive from issuers full accurate and timely disclosure of information material to their investment decisions. The disclosure should include information covering the specific securities product being offered the current position and future prospects of the provider and relevant information relating to the industry involved. This allows investors to make an informed decision on the potential risks and returns of their investment choices and to take responsibility for their investment decisions. 
I recognise that the disclosure regime imposes costs on issuers. I want to ensure that these costs are imposed only if they are outweighed by the benefits the disclosure regime provides to investors. The significant disclosure currently required under the Local Government Act means that concurrent compliance with the full disclosure regime of the Securities Act produces duplication of information and added costs. Local authorities through their statutory obligations under the Local Government Act effectively operate in a manner that achieves the policy objectives of the Securities Act as stated above. They are public bodies that cannot be wound up for default and have a discretionary power to support their financial commitments through a rates-as-security provision. An issuing authority has the discretionary power to charge a rate or rates revenue as security for an issue of securities to the public or to allow market forces to determine the risk premium applicable to the particular offer. The availability of local authorities debt securities on the retail market will provide a viable alternative for funding infrastructure assets and for investors to diversify their portfolios—a pretty compelling reason I would think at this moment in time. 
Local authority long-term plans show that local authorities are undertaking some $30.8 billion in capital works—network or community infrastructure—in the 10 years to June 2016 and that due to potential front-loading 50 percent of this amount could be required by 2009. Infrastructure assets which are the primary recipient of local authorities funding are long-term investments and borrowing helps spread the cost over the life of the asset. Financial decisions by local authorities raise important issues of equity including intergenerational equity and affordability. This is particularly the case when they are making funding decisions. This bill will provide a further dimension to those funding decisions. It will reduce compliance costs by easing the process for local authorities to offer securities to the public while expanding and diversifying the investment options available to retail investors. 
Local Government New Zealand welcomed the announcement of the Government’s intention to introduce this bill. Its president Basil Morrison said: “We are pleased that the proposed change will make it easier for councils to raise some funds from the public for major projects and will hopefully take some of the pressure off rates by allowing us to better match our borrowing strategies with the life of our assets.” He went on to say: “Given the size of the capital works programme outlined in councils’ 10-year financial plans the ability to once again issue debt securities will save councils millions of dollars in interest costs.” 
The bill clearly has the support of the local government sector. I am very pleased that it is also supported by a number of parties in this House. I commend the bill to the House. 
SIMON POWER (National—Rangitikei) 
: 
 National supports the Securities (Local Authority Exemption) Amendment Bill at its first reading and looks forward to the submission process at the Commerce Committee. There are some unanswered questions that go with the bill but the Minister Lianne Dalziel has done a thorough job of outlining the provisions in almost a clause by clause way of what would be the purpose and effect of this legislation. 
It is worth recalling that the bill amends the Securities Act 1978 to provide an exemption from the full disclosure requirements of that Act. The Minister is quite right when she says that there was concern around the number of signatures that have to be collected from local councillors and also around councillors’ exemption at law in the event of non-execution of that documentation which provides in the corporate sense an added political hurdle that most businesses looking for the issuing of debt securities do not have to face. This is a very fair point. 
Also I believe that it is worth emphasising the point the Minister made that the reporting that local bodies are required to do at present—particularly through annual planning and report documentation as well as in the long-term council community plan process which includes 10-year projections for financial performance for that territorial authority—does provide quite a strict framework for financial reporting for those particular territorial authorities. 
It was worthwhile listening to the Minister’s comments on those matters. I could not help but note a slight political snipe there at one point when she recalled the fact that a similar disclosure was repealed in 1996 in order to make these types of securities subject to the same obligations as companies and other corporate entities. This brings to bear what is probably the only outstanding issue in relation to the proposed exemption—that is we want to make sure using a corporate governance and financial reporting model for debt issuing as opposed to a territorial authority that whilst we provide a legislative mechanism for convenience we in no way reduce the level of standards that have to be met before the debt security is issued. I think that is probably the one outstanding question National has. 
National wants to reassure itself during the submission process that whilst we create this framework of convenience for local government—and I will come back to why that is so important—we do not in any way suggest that it is the model of governance that determines the reporting requirements and the financial reporting stringency around the issuing of debt securities. I think that is a point that no doubt the committee will— 
Hon Lianne Dalziel 
: It will be good to have the product in the market. 
SIMON POWER 
: I am sure it will I say to the Minister but it is an important point to make because the committee needs to be reassured that we are not creating two standards that come about only because of the nature of the governing body that is making the decision to issue the debt security to the public. 
The example that leapt out—that the Minister outlined in her speech and is contained in the explanatory note—is the issue of political considerations cramming or preventing the execution of documentation relating to the issuing of debt securities when companies operate under a board collective-responsibility model but at law it is not the same for territorial authority councillors and that is a very valid point. 
I think the issue of issuing debt securities for the funding of infrastructure is really the driving point behind this legislation and making available to local bodies the opportunity to fund infrastructure in a way that is outside the current rates-based framework is an important step and one that National supports. In order to achieve long-term assets borrowing is an option because it spreads as the explanatory note says the cost over the life of the asset—it makes some sense. There will be more about that later. 
It is interesting to note too that not only does it make financial sense but the argument about community ownership is an important one as well. Of course we know that if families purchase a home or an asset in a particular community they tend to be woven into that community in a deeper way than they otherwise would have been by way of that ownership. Likewise purchasing debt securities for funding of infrastructure and the like is an important point. 
As I said we will be supporting this bill at first reading. I put on notification as I said earlier that National will need some reassurance around any reductions in standards to make sure that we are not creating a lower standard for local government than for companies. This exemption makes sense. It makes sense from a practical point of view when it comes to execution of documentation. It makes sense because the reporting regimes are also fair and of a high standard for local government outside of the frameworks of the financial reporting legislation. And it makes sense for the funding of infrastructure in the medium to long term. We await further discussion on the bill but at this point the Government can be assured that National will support the first reading of this bill. 
STEVE CHADWICK (Labour—Rotorua) 
: 
 The Securities (Local Authority Exemption) Amendment Bill as submitted today is a welcome relief for the local government sector. It is interesting how members in the Opposition forget what this has done to the ability of local government to raise cash for major infrastructure assets ever since 1996 simply because of the compliance cost. This bill is everything the Opposition argues for about the reduction of compliance costs yet when they brought in this in 1996— 
Simon Power 
: Steve we’re voting for it! 
STEVE CHADWICK 
: I know National is voting for it but in 1996 my golly what an imposition it was on to the local government sector when it could not even start to look at how it was going to raise funds for major infrastructure assets. 
I have attended the local government forum which Ministers attend and where it was said: “Thank goodness for this Government. Ministers are prepared to engage with us as chairs of local government and regional councils. We will share opportunities share some challenges directly at the table and there will also be sharing of information.” The Local Government New Zealand sector raised this issue to Lianne Dalziel as the Minister of Commerce. She took it seriously and took it on board and this bill with its introduction today is the result. 
In the 1990s under National no Ministers bothered to engage as a collective with the local government sector. I was on council at the time. We had one visit about a roading policy and that was the only one in the entire time I was on the district council. This is now a quarterly forum. It raises issues and if they are serious issues that impede the functioning of the local government sector they are taken on board. 
This bill will amend the Securities Act to exempt local authorities from the full disclosure requirements of the Act when issuing debt securities. For that reason it will go to the Commerce Committee. Local government has said as a sector that it has suffered with this disclosure exemption since 1996. It was introduced to try to establish a level playing field with private companies but they are different beasts—they are entirely different beasts. The exemption did not take into account any differences in the legal frameworks between companies and local authorities. They have been very constrained. Disclosure is just too costly. As the Minister said only one local authority since 1996 has picked up the opportunity here and that was Auckland which was able to meet the disclosure requirements. It would have been for a major capital infrastructure asset that they bothered even to meet that threshold. All councillors had to unanimously agree to sign off a prospectus to issue debt and to fund any project. All councillors—when has any local authority ever been able to get all councillors to agree on anything in a unanimous vote? 
Local authorities’ long-term council community plans show that the authorities are undertaking some $30.8 billion investment in the next 10 years on capital works whether it is network or community infrastructure up until June 2016. Due to potential front loading of those investments 50 percent of this amount could be required by 2009. So it is no wonder the local authority sector is really keen for this to happen. 
The Department of Internal Affairs is currently reviewing the recommendations of the rates inquiry that was led by David Shand. It is looking at rates pressures in the local authority sector—and they are definitely evident especially with the level of capital works that local authorities want to undertake. The report recommends that a 50 percent of rates ratio to operating costs is when the level is about right; at the moment it is currently sitting around 56 percent. So this recommendation is something very very welcome to the sector. I am sure the Department of Internal Affairs will be looking at other recommendations too that will help the rates pressure on local authorities. 
In Rotorua we are looking at over $100 million investment in infrastructure assets so that we can reticulate sewage screens to increase the water quality. There is no ability of local authorities to raise that funding without this exemption. The president of Local Government New Zealand Sir Basil Morrison said: “We are pleased that proposed change will make it easier for councils to raise funds from the public for major projects”—they are very diverse all over the country—“and will hopefully take some of the pressure off rates by allowing us to better match our borrowing strategies with the life of our assets.” He then went on to say: “Given the size of the capital works programme outlined in councils ten year financial plans the ability to once again issue debt securities will save councils millions of dollars of interest costs.” 
To end my little speech today I just want to say that this again shows that the Labour-led Government is really showing its commitment to strengthening the way in which councils can operate and serve their communities. This is a Government that listens to the local authority sector and responds to its demands. I commend this bill to the House and I know the Commerce Committee will do a great job with it. 
LINDSAY TISCH (National—Piako) 
: 
 As National’s spokesperson on commerce Simon Power has said we will be supporting this Securities (Local Authority Exemption) Amendment Bill’s first reading and referral to the select committee. 
I guess the broad goal of the bill is to provide investor confidence in the market. It will allow the councils to have the flexibility that they have not had to borrow money to invest in the infrastructural challenges they face. The explanatory note states: “Local authority long-term plans show that local authorities are undertaking some $30.8 billion in capital works … in the 10 years to June 2016 …”. That is a significant development a significant investment which needs to occur within the regions if we are to get the infrastructure right. There are challenges there particularly in roading and water supply. There are other areas like telecommunications but local authorities are not necessarily involved in those particular areas. 
The point that Simon Power made which I think is important is that the select committee will be wanting to see exactly what the structures are and how this will work. This document talks about regulatory impact statements. One of the concerns I have is that this Government does not have a good record of actually complying with its own legislation in terms of regulatory impact statements. Page 5 of the explanatory note under the heading “Adequacy Statement” states that “The Ministry of Economic Development (MED) confirms that the Code of Good Regulatory Practice and the regulatory impact analysis (RIA) requirements including the consultation RIA requirements have been complied with.” and that the Ministry of Economic Development has no difficulty with them. Well the Ministry of Economic Development is in fact a Government agency and I would say that over the years legislation has got through without any regulatory impact statement. A classic example of that was KiwiSaver. No regulatory impact statement accompanied KiwiSaver—absolutely none whatsoever. So although we have a statement here that the Ministry of Economic Development considers the regulatory impact statement and the regulatory impact analysis undertaken to be adequate one of the questions I want to ask at the select committee is about robustness and transparency. Where is the robustness and the transparency that show that compliance costs will actually be controlled by this legislation? I do not have confidence at the moment that this is as straightforward as it may seem. I hope to be proved wrong because I think this bill is a move in the right direction and National is supporting it. 
If people want to buy a home or a business or whatever they will go to the market—usually a bank—to borrow money. People do not wait until they have the money in their pockets before they make those investments. The same applies to local authorities. This bill allows two councillors to sign up to a project rather than the whole council having to sign up to it—we would never get the agreement of a whole council—so that we can see some progress. This is what differentiates local authorities from a company operation. Company directors tend to operate under the principle of collective responsibility but no such obligation exists within local government. So this is certainly a move in the right direction. 
I am particularly concerned about the whole area of compliance. Although the regulatory impact statement says it is adequate and the Ministry of Economic Development is satisfied with that we must remember that the ministry is a Government agency. It is the one that is actually scrutinising Government policy. I am looking for robustness and transparency and I suggest that there needs to be an independent body to do this work. We need a watchdog agency as opposed to a Government agency which will be telling the select committee and this Parliament that everything is kosher and that there will not be regulatory creep as I call it or increased compliance costs associated with this. If there are we need to know that a cost-benefit analysis has been done that shows that the benefits will outweigh any additional costs associated with it. 
As Simon Power indicated—and I am sure other speakers will as well—the reinstatement of the exemption for local authorities will provide them with a reduced disclosure regime due in part of course to those disclosure regimes and requirements that are already in the Local Government Act 2002. They are already met under that Act. This is a move in the right direction but I flag to this House that there will be significant scrutiny as to exactly what the regulatory impact statement and the regulatory impact analysis have to say about compliance costs. 
Hon BRIAN DONNELLY (NZ First) 
: 
 Astute members of the House may have picked up last week on the fact that New Zealand First was just slightly irked by the Minister of Local Government over the public release of the rates inquiry. But I have to inform the House that we have kissed and made up and everything is fine and we will be working constructively into the future. The point I make is that while National was planning to vote for Rodney Hide’s dumb bill—I have to say that—New Zealand First used that situation to be able to single-handedly force the inquiry into local government. There are some serious issues around the revenue raising of local government. We recognise that. But we also recognise that a simplistic bill like Rodney Hide’s bill was not going to resolve those issues. We held out in fact for a high-level and independent inquiry such as we got even though we came under an enormous amount of pressure largely from our own party members. I have to give great credit to the New Zealand First caucus for steadfastly showing such resolution and sticking to its guns and finally getting this local government report. 
I have to say that the report which is commonly referred to as the Shand report will be seen as a watershed. It will stand out as the equivalent of the Royal Commission on Genetic Modification and it is against the suggestions contained in the report that decisions will be made I believe over the next two decades or more. 
I take the opportunity—because this bill and the report do dovetail together—to congratulate the chair David Shand and Christine Cheyne and Graeme Horsley on the quality of the report and the depth of their analysis. The panel has certainly served New Zealand very well and this will become increasingly obvious as time goes on— 
Hone Harawira 
: Increasingly obvious. 
Hon BRIAN DONNELLY 
: —yes it will—and as people suddenly realise. First of all they have to actually read the report. Once they have read the report and digested it they will see the wisdom that underpins it. 
One of the key recommendations made in the report is that in order to spread cost over generations councils should make greater use of borrowing for long-term capital projects—the very point that Simon Power was making. I would like to read from the relevant sections. The report states on page 156: “The panel considers that there are very good reasons for local authorities to make greater use of debt to finance long-life investments. Doing so may advance the date at which the infrastructure can be provided and spreads the capital cost more equitably across the generations that benefit from that service. Moreover central and local authorities are generally low-risk debtors so they enjoy low interest rates in debt markets.” 
Recommendation No. 19 specifically states that local government should look favourably at making more use of debt to finance long-term assets and that this should include the issuance of bonds including infrastructure bonds on the capital market not just shorter-term borrowing from commercial banks. This is where the two things dovetail together. Because as the report points out under a 1998 amendment—it was a 1996 amendment but it came into force in 1998—to the Securities Act 1998 local authorities are no longer exempt from obligations on bond issuers including the publication of a prospectus that all elected members must sign. This amendment made the issuing of bonds more costly and politically difficult for local authorities. One councillor could therefore prevent borrowing on the market regardless of the majority view. However the Government has recently announced that it will seek to amend the Act to remove the requirement for a prospectus for local authorities. So one can say this is the first legislation that has partially flowed from that particular I think extremely important report. 
I just want to talk about our own local district council. During the present term one councillor there has taken a position of opposition to literally everything that the council has proposed. He has placed himself as a matter of principle in an absolutely adversarial position in relation to the majority of the council members and his stance is not dictated by the merits of the case but simply by his political position. Herein lies the problem we have at the moment which this bill we believe will overcome. As has been stated in the report one councillor can actually hold up a decision by the council to fund capital projects through debt and through taking on debt—the very thing the report recommends councils should be making greater use of. 
If we think about it councils are created through a democratic process involving the whole of the adult population within their areas and that whole adult population has a multiplicity of different agendas that they are running and that they are voting on whereas a company and its shareholders have the common purpose of maximising profit. Therefore even if the vast majority of the population actually votes for councillors who support the raising of debt for capital projects it is easy in the democratic process for voters in one particular area to elect a councillor who has proposed not to do so and they can hold the whole process up. In other words the present situation leads to an undemocratic process. 
The rule that requires all council members to sign off on a prospectus when issuing debt securities to the public puts all of the power into any individual member’s hands. We do not believe that that is the best situation. In fact it runs contrary to the very suggestions that are coming from the advisers to the Government and also from completely independent and autonomous members of the inquiry team—and I can assure members that this went through a totally autonomous process. 
Therefore New Zealand First will be supporting the bill. We think it is a sensible bill. I think it rectifies some problems that have been observed. It certainly will encourage councils to take on board recommendation 19 of the Local Government Rates Inquiry and we think that it is going in the right direction. In fact we think it is an absolutely critical step to take so New Zealand First will be supporting this bill. 
METIRIA TUREI (Green) 
: 
 I want to take just a short call on the Securities (Local Authority Exemption) Amendment Bill in order to advise the House that the Greens will be supporting the legislation. It is a fairly small bill in the sense of not being particularly controversial but it will be very helpful for councils to be able to have a greater capacity to use this mechanism for getting funding presumably for their major capital works. 
This issue was raised in the rates inquiry as Mr Donnelly has discussed already so it makes sense to have this legislation as a tool. The Greens have been concerned though that by reducing the disclosure provisions for councils there will be ways they can use this process to subvert some of the democratic processes that are inherent in the Local Government Act. 
There is an element of protection in requiring councils to disclose as much information as everybody else is required to both for those who are looking to invest and for the ratepayers who are at the end of the process responsible for the health of that debt if you like. We asked for more information about the issue. We were told that because all of that information is already required under the Local Government Act—because councils have to provide it in their long-term council community plans and because the process for making those decisions is provided in the documents—there is that kind of disclosure anyway and that this process is just repeating it at quite a significant cost especially for smaller councils. 
That argument makes a lot of sense. We understand the argument but there is still the concern that was raised by the Office of the Auditor-General in its review of those long-term plans which came out a few months ago. The Office of the Auditor-General recognised that there were some real problems with some of those plans that they were often extremely large documents and that it was very difficult to tell what was important. Trying to find useful information in those documents could therefore be very very difficult. 
 That raises the concern that if the councils do not have to engage in the same disclosure practices for making decisions around issuing securities because they can rely on these large plans to include that information then investors and ratepayers who are looking for that information could find it extremely difficult to locate. The information might be there but it could be buried in 10000 pages. That is not disclosure. That is not enabling the information to be made available. 
We would like to see the investment statement issued providing more detail so that although councils give less disclosure than other companies they give a slightly higher level than is currently required in the bill. We would like councils to have to identify where the information is in the other documents they produce so that people can find it. It could be as simple as giving page numbers. How councils do it is up to them. It is also about how we structure those provisions in the bill. 
If we are prepared to rely just on these unwieldy huge documents with huge amounts of detail which are comparatively unstructured and difficult for lay people to find information in then there simply will not be disclosure and protection for either the investors or ratepayers who have to foot the bill at the end. We would like to see more information being required in the investment statements and to have them expanded slightly so that there is a cross-reference to information in other documents. 
We will have to work through that approach in the select committee as to how it might work. There may be other ideas from councils or others about how we could do it. But this approach would be a wise way of making sure that we meet the objectives and that councils would be able to engage in the process practically without costing them huge amounts of money in preparing their prospectuses and information. It would be a wise way of making sure that the plans they have to provide under the Local Government Act are already coherent and sound and that they contain all the necessary information. It will also make sure that investors can find the information they need in order to be able to make sensible decisions for themselves and that ratepayers can follow the decision-making process that has led from the consultation and engagement involved in making that decision through to using this tool. They can follow the process through to the long-term council community plans and other documents and then finally through to the investment statements. 
With that approach there is the maximum amount of transparency with a reasonable amount of control over the cost for councils. It could be a very sensible way of engaging with this method giving councils the best possible flexibility and giving investors and ratepayers the greatest amount of protection. Thank you. 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Tena koe Madam Assistant Speaker. This Securities (Local Authority Exemption) Amendment Bill seeks to restore an exemption for local authorities to the current Securities Act disclosure regime. In effect this action backtracks 10 years to 1998 when local authorities were withdrawn from the public debt securities market. But it goes even further to 20 years ago in 1978 when the original Securities Act granted local authorities a disclosure exemption in the first place. 
The rules around the issuing of securities were quite clear. Those that would be exempt included the Crown the National Provident Fund board the Reserve Bank of New Zealand and local authorities. But I want to suggest today that the real context for the bill goes back even further again for one of the primary purposes driving the bill has been the concern from local government that the onerous disclosure regime prevents them from being able to raise funds to fund capital works. Currently apart from the Auckland City Council councils are limited to raising funds by borrowing from financial institutions and also of course through hikes in rates. So there are two particular issues that I want to canvass in this first reading: the concept of capital works and that of local body rates. 
We are pleased that this bill proposes that councils not be burdened further than they already are by the onerous reporting requirements set out in the Local Government Act 2002 should they agree to issue debt securities. The neo-liberal drive towards submitting all transactions regardless of the context to business rules and compliance requirements has failed miserably to take into account the significant differences in the reporting regimes and legal frameworks of local authorities and corporate entities. But we in the Maori Party also suggest that particular communities have borne the brunt of the collapse of investment and resourcing options to fund capital works needs. 
This bill is being heralded as making it easier for an estimated $30 billion to be spent on infrastructure development—bridges footpaths sealing and resealing of roads street lights sewerage and stormwater services and all of the things that we understand as being part of capital spending. What we know is that the asset-rich infrastructure organisations such as local bodies require large amounts of annual capital expenditure to keep their assets operational. They depend on virtual cash cows to renew ageing assets and to acquire new assets in order to provide the services required by the changing needs of the community. In some areas it seems that they require virtually herds of cash cows to get them through the crisis conditions reflected in their capital works programme. 
For some areas it will be natural disasters that create the crisis. I ask members to think of the devastating rainfall and flooding that ravaged the coastal Bay of Plenty in May 2005 as a case in point. For others it may be the impact of economic decisions made in one sector that leaves behind a trail of destruction in another. One has only to think of the impact on roading by heavy commercial vehicles—particularly at high intensities as with logging trucks—to see evidence of capital works projects in the making all over the country. The wear and tear leading to much earlier road failure than otherwise expected comes about from decisions to shunt logging trucks into areas where roads have never been constructed for heavy traffic. 
The expectations of increased maintenance costs and the probability of major reconstruction or repair costs all bump up the road expenditure significantly. I have only to think of my own tribal rohe of Ngati Kahungunu where I have witnessed the impact of logging trucks weighing up to 40 tonnes and being over 22 metres long speeding up the Napier to Gisborne highway—and it is already a hazardous stretch of road. So although the Minister of Commerce Lianne Dalziel is quick to promote the possibility that this law change will help to achieve the Government’s economic transformation agenda we must not underestimate the decay and devastation that has brought about the demand for capital works in the first place and simply ask ourselves this question: how do we support the communities that most stand to be affected by these issues?  
It is here of course that we think back to the announcements made a fortnight ago by the independent panel conducting the Local Government Rates Inquiry. It does not take a rocket politician to know that the undue impact of and demand for capital expenditure hits hardest in the more vulnerable communities—locations populated by tangata whenua. The rates inquiry concluded that not only were the ratings valuation of Maori land inappropriate and “significantly overstated” but that there were far too many examples of “landlocked unproductive Maori land being valued at inexplicably high figures”.  
So we welcome the opportunity provided by this bill to be able to make much-needed decisions about the funding of capital works programmes without causing the massive rates hikes our people have experienced. We absolutely agree with the concept that infrastructure assets are long-term investments and that borrowing helps to spread the cost over the life of the asset. But we are also acutely aware of the very complex and strange relationship that often exists between Maori landowners and local government—a relationship that has suffered from deteriorating capital works and overinflated overrating of Maori land.  
We supported the recommendation from the independent panel to address the relationship between the Treaty of Waitangi and rating law. We believe it is a recommendation that could well be relevant to the legislative process introduced in the context of the Securities Act disclosure regime. We believe that decisions about infrastructure development need to be made in conjunction with mana whenua—literally the people who hold authority with the land. The Treaty relationship requires councils to have both adequate Maori representation and to undertake specific consultation with Maori. This is a huge challenge for central and local government as a recent research project describing Maori engagement with local government has confirmed. The project was entitled  
He wharemoa te rakau ka mahue 
— 
A hollow tree is left behind 
. The research concluded that participants felt there was little opportunity for Maori representation or consideration of Maori issues in local government and that where there was it was often tokenistic.  
Researchers Christine Cheyne and Veronica Tawhai suggest that efforts for structural change and greater power sharing in local government are considered by Maori as both a Treaty of Waitangi issue and an issue of democracy. They left three key messages for local government: improving the information flow—knowledge is power; enhancing Maori participation—diversity is the key; and increasing accountability to Maori—integrity is everything.  
The Maori Party believes these messages are significant challenges which councils must consider as they pursue their search of income for infrastructure development and they are messages that we will be looking to the select committee process for to learn how moves to ensure affordable local and regional development reflect the commitment to meaningful compliance with the Treaty of Waitangi. Thank you. 
Bill read a first time. 
Bill referred to the Commerce Committee. 
International Finance Agreements Amendment Bill 
In Committee 
Part 1 Preliminary provisions 
Dr WAYNE MAPP (National—North Shore) 
: 
 As is well noted the International Finance Agreements Amendment Bill pretty much had the broad consent of the Foreign Affairs Defence and Trade Committee. As members will note new section 1A to be inserted by clause 5 sets out the purpose of this legislation. It really is part of the international framework of financial and monetary institutions to which New Zealand belongs. The bill ties in effectively with the International Monetary Fund and the International Bank for Reconstruction and Development as is noted in the proposed new section 1A(1). 
The purpose of this particular agreement—which one might loosely say is to complete that framework of agreements—is to assist and promote investment in developing countries where there is significant political risk. That is fundamentally set out in new section 1A(3) which states that the purpose of the bill is to enable the Government of New Zealand to fulfil its obligations as a member of the OECD—and I want to stress that—to provide for the Multilateral Investment Guarantee Agency. We do not have to guarantee investments in Britain Australia or the United States. All of these countries and many other countries of course have robust independent legal institutions. Any New Zealander can invest his or her money safely in those countries or make an investment in those countries and that person will face only the normal business risks. 
However New Zealand companies may well wish to invest in places in the world where there is substantially serious political risk. It may interest members to know that I did my doctorate in investments in Iran. There was immense political risk there because of the hostage crisis. A special arbitral procedure had to be set up to effectively protect the United States investments and to compensate for the huge wide-scale expropriations. Members will be interested to know that that particular tribunal drew on a whole body of litigation and arbitral decisions that primarily related to South America and the Middle East and that were built primarily around investments in oil exploration investments in steel and generally speaking resource development contracts. Those are the sorts of contracts that investors are primarily entering into with countries that do not have let us say robust legal systems and that are lacking in any sort of independence and protection. So in order to give an incentive for developed nations to invest in some of these developing nations we have to have this guarantee agency. 
The purpose of the Multilateral Investment Guarantee Agency as is clearly set out in the purpose provision in Part 1 is to make it easier for developed nations or investors in developed nations to invest in developing countries in order to lift the wealth of those developing countries. We know that many of those countries have weak institutions. They are not democratic. They do not have a sense of independent judiciary and the like. Agreements are often made on a person-to-person basis. There are problems around corruption and so forth. Yet such countries still need the investment. And to be truthful developed countries need access to the resources. It is—and I might say this actually to the Maori Party—a relationship that benefits both parties; both the developed countries and the developing countries benefit. The developing countries do not have the financial resources to develop those resources and they need essentially external finance. Without that those resources remain idle and the people remain poor. The countries that have really accepted foreign investment are the ones that have had the fastest levels of development. 
I will just briefly finish on this point. This agreement is to assist developing countries to build their prosperity. I say to the Maori Party that after it has considered the bill it should decide to vote for it because the bill is actually about assisting developing countries in a symbiotic relationship that is beneficial to both parties. That is why National supports this bill. Thank you. 
JOHN HAYES (National—Wairarapa) 
: 
 I rise in support of this bill and to speak on Part 1. I particularly want to direct my comments to small businesses because it is quite interesting to see that the members from our region include Australia the Federated States of Micronesia Palau Papua New Guinea Samoa Vanuatu Fiji Indonesia Thailand and Viet Nam. This legislation can be used by small businesses. Set up under the Multilateral Investment Guarantee Agency is a section that is particularly designed for small to medium sized investors. 
In order for small New Zealand businesses or even medium sized New Zealand businesses to get access to a guarantee the reciprocating party the other country in which the investment is to be based also has to be a member of the agency. So those member countries that I have named are really quite important. I think that the encouragement of growth in small to medium sized enterprises in the countries we are talking about in our immediate neighbourhood is critical to the creation of jobs and economic growth. I think the agency will be useful because it will help investors in New Zealand especially those that are small or medium sized to invest in these countries. For example if we think about Fiji and the failing sugar industry it ought to be quite possible for a New Zealand company to go in there and encourage the development of an ethanol industry on the back of that sugar industry. 
The areas that we will have to be in to take up the purpose of this legislation will be those associated with the expansion modernisation or financial restructuring of existing projects. Also eligible for New Zealand companies will be acquisitions that involve the privatisation of State-owned assets and that will be particularly relevant for example in Papua New Guinea where a lot of privatisation is going on. The types of foreign investments that this legislation will provide a guarantee for will include equity shareholding loans and other shareholder loan guarantees provided there is a maturity of 3 years. I am talking only about dealing with the small to medium sized enterprise investment. 
Before the guarantee office will pick up an investment and protect it for a New Zealand company it will have to be satisfied the project is financially and economically viable environmentally sound and consistent with the labour standards in New Zealand and the licensing agreements that would apply in New Zealand. The eligible investors will include nationals of member countries of the convention—and those will soon include ourselves—and corporations if they are either incorporated or have their principal place in a member country or if they are majority owned by nationals of member countries. If they are majority-owned New Zealand companies they will be eligible. 
New Zealand companies that wish to invest in the immediate region will be required to meet a few other criteria. First of all the entity is to have no more than 300 employees. It must have assets of less than US$15 million so it could conceivably include for example some of the tourist infrastructure in Fiji. The total annual sales must not be more than US$15 million. This scheme which has been specifically designed for small and medium investors has no restrictions in respect of the size of the investor but it is specifically designed to assist small and medium sized investors and most New Zealand companies would fit that arrangement. 
The second comment I would like to make while I am on my feet is that this convention was signed up to in Australia back in 1996. It came into force there in 1998. The one thing to think about is that the Labour Government has been in power here for the last 8 years and what progress has it made? What has it been doing to help our small to medium sized businesses? That Government could have signed up to this convention. [ 
Interruption 
] I say to the Minister that he could have organised this 8 years ago and the Government could have been supporting New Zealand industries. The Government could have been supporting small businesses in Papua New Guinea in Fiji in Palau and in the Federated States of Micronesia and the Minister has not failed to do that. 
Hon Clayton Cosgrove 
: I haven’t failed to do it. Thank you very much. 
JOHN HAYES 
: I beg your pardon? 
Hon Clayton Cosgrove 
: I’m just quoting you. You said that I haven’t failed to do it. 
JOHN HAYES 
: Well I think that the Minister has actually because— 
Hon Clayton Cosgrove 
: That’s what you said—that I haven’t failed. 
JOHN HAYES 
: The Minister has failed. He has failed to put this measure in place and I think small New Zealand businesses and our immediate neighbouring countries can be really concerned that this legislation has taken so long to get into this Parliament. 
With those comments I would like to offer our support for this bill because I can see it helping in particular our small Pacific Island States and small to medium sized enterprises here in New Zealand. Thank you. 
Part 1 agreed to. 
Part 2 Membership of Agency 
The CHAIRPERSON (Ann Hartley) 
: The debate on this part includes the schedule. 
TIM GROSER (National) 
: 
 I will take a brief call just to highlight one or two of the articles in the convention in new Schedule 7 of the principal Act that I think are quite interesting in terms of the overriding objective of helping developing countries attract—given the risk premiums involved here—greater flows of funding from the members of this agency. So if we start by looking at article 2 we see the statement very clearly that the objective is indeed to encourage the flow of investments for productive purposes amongst member countries. Later on in article 2(a) we see a very clear statement that the real objective is to insure against as is described non-commercial risks. So it is not intended to cover normal operating insurance needs but very much the non-commercial risks. 
If we turn to article 11 a little more definition is given to the covered risks there. They are obviously as my colleagues have just pointed out not the sorts of risks that any New Zealand investing company would expect to meet in Australia in any OECD country or indeed in many developing countries with reasonably robust institutions but in certain markets these become possibly a complete disincentive to investment. They are listed in article 11 as first “Currency Transfer” which is defined as “any introduction attributable to the host government of restrictions on the transfer outside the host country of its currency into a freely usable currency”. 
One would note in passing that this was a massive problem around the 1930s and right into the early 1950s when currency convertibility was more or less achieved in a very rapid period of time amongst the then major industrialised countries. It is still a fundamental problem in a few developing countries so if this were to be reintroduced it is one of the risks that is covered. 
The second one is certainly familiar. My colleague Dr Mapp referred to his own doctoral dissertation on the Iranian situation expropriation and similar measures. There is a very precise definition in article 11(a)(iii) in relation to breach of contract by the host Government. Finally article 11(a)(iv) refers to war and civil disturbance. These are risks that any prudent investor would have to take into account in certain developing country situations. This is an agency that will essentially take out those risks for a fee and deal with that risk allowing the private investor to handle only the more traditional insurance risks that would be apparent. 
Various other clauses deal with membership and capital. During the examination by the select committee which as my colleagues have pointed out was non-contentious we noted that New Zealand’s liability is encompassed in holding 513 shares. From memory there is a contingent liability of around US$5.5 million and we pay 10 percent upfront in cash. So the opportunity cost of that is not very high from New Zealand’s point of view and it is playing our part in the overall multilateral economic cooperation process. 
As I think I might have said in the first reading the only surprise to me was to find we were not already members of this agency. Clearly it is important that the guarantees are done in a cooperative way with the host Government. As everyone in this House knows there are acute issues of sensitivity about sovereignty. One would almost say there is an inverse relationship between the stage of development people have and the sensitivity they feel about sovereignty so it is important that article 15 makes it clear that this proceeds only with the host country’s approval. There are fairly standard subrogation provisions—and I understand it is a very technical issue—in article 18. The agency is also allowed through article 21 to offset some of its risks by using in certain circumstances reinsurance facilities to spread the risk. 
In terms of looking at the overall risk of the agency as a whole there is a provision that limits the total amount of contingent liability to 150 percent of the subscribed capital. Elsewhere in the bill—I cannot recall the article but I remember it from the time of the examination—there is a cap per project of from memory $110 million. This is a carefully designed agreement. It has obviously been worked through by technical experts from the World Bank who are well placed to do this. We are very pleased to support the bill at this stage. Thank you. 
Dr WAYNE MAPP (National—North Shore) 
: 
 I will take just a brief call on this part. It is really the core of the agreement and refers essentially to the principal schedule new schedule 7 which sets out the agreement which is the convention itself. It sets out the calls that each country has to make in terms of share capital and it sets out the membership. The membership is in two lists if you will—category 1 and category 2. The category 1 nations are essentially what we would call the developed nations ranging from Australia Austria Belgium etc. right through to the United States. They have a total shareholding of 59000 shares. New Zealand’s share of that is 513 so it is slightly under 1 percent. It is a very small level of shareholding in this instance and we have to subscribe to approximately $5 million. But as Mr Groser has said we in fact pay only 10 percent of that in any event. 
The category 2 States are the developing countries. Clearly it is a much longer list and its total share capital is 100000 shares. So the developing States have almost 60 percent more shareholding than the developed nations and I suppose to some extent that reflects the allocation of wealth around the world. It is not even and it is not intended to be even. The developed countries have a weighted voting system reflecting the fact that they are the major investors. But I want to emphasise this point: it is nevertheless a minority. 
The reason I emphasise that point is that I am making it to the Maori Party and I do that quite deliberately. It was the only party that voted against this agreement. It was the only party that raised its voice to vote against Part 1. The Maori Party is always saying that it is there to protect the interests of developing nations. It talks about the importance of various UN conventions that do that. We have to ask ourselves the simple question: why therefore would one vote against an agreement that has been put in place to assist developing countries and moreover gives the developing countries the majority of the votes by a substantial margin? 
Do members know what the Maori Party will do? It will revert to its ideological stance and simply cast a reflexive vote against. I can understand that of a party that has just arrived in this Parliament. I recall seeing the Green Party always operating like that. These days the Green Party takes a somewhat more sophisticated view of things and it does a more careful evaluation of what it will do in terms of its votes. The Greens still vote like a left-wing party; I do not doubt that. But I do say to the Maori Party not to take just a reflexive approach on these things but to analyse the issue. Surely it is significant that almost every nation in the world—indeed the vast majority of the Pasifika nations as was clearly pointed out by Mr John Hayes—is a member of this convention. The Pasifika nations which I presume the Maori Party has a certain camaraderie with have said this is an agreement that is good for them because it will assist them to get development capital. Surely that is a good thing and is the pathway to growth and development. 
I say to political parties that when they are elected to this Parliament one of their responsibilities is to look more broadly. I know that takes a little bit of time and so forth. I have seen the Green Party go through this evolution. I would hope the Maori Party does not just vote reflexively on this and takes note that the Pasifika nations have seen the merit in and the value of this agreement. That is clearly indicated in the membership of this convention. Thank you. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 The Maori Party is not against development per se but we are not of a mind to be blindly supportive of international developments that lead to the kind of scenario we had in Bougainville or the kind of scenario where New Zealand supported the Indonesian Government and the Indonesian army to continue to plunder West Papua and other places. Although I hear the korero that Pasifika countries have signed up to this agreement I am not so dumb as to believe that they signed up to it because they love it. Often they sign a deal because it is the only deal going. It is a bit like the Multilateral Agreement on Investment. 
I am prepared as is the Maori Party to be convinced of the rightfulness of this but we will not be voting for it simply on the basis that somebody from the National Party thinks we should. We are independently minded enough about what happens in our country and we are mindful also of what happens in other countries. 
I look again to the Northern Territory. I know for example that although John Howard was talking about child abuse etc. and saying he had a 5-year plan to turn it round for some strange reason he slipped in a deal to get his hands on land in the Northern Territory for the next 95 years. Why? He did it so that those so-called resource development companies—people who will come in and help all those poor people—can go in there and get access to all the minerals out of that place so that the other companies that might say nice things about what they will do in the Northern Territory can actually dump all their nuclear waste from the reactor down in Sydney. No I say to Mr Mapp. 
I am happy to say the Maori Party is open-minded to development but we are not about to be dragged into development that is not consistent with the needs of indigenous people. We are more than happy to take it up with representatives of some of those Pacific countries—and we will—to see whether in fact this is the kind of deal that is beneficial to them on their terms or beneficial to them because that is the only deal they can possibly get. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 109 
New Zealand Labour 49; New Zealand National 48; New Zealand First 7; United Future 2; Progressive 1; Independents: Copeland Field. 
Noes 10 
Green Party 6; Maori Party 4. 
Part 2 agreed to. 
Schedule 
A party vote was called for on the question  
That the schedule be agreed to. 
Ayes 109 
New Zealand Labour 49; New Zealand National 48; New Zealand First 7; United Future 2; Progressive 1; Independents: Copeland Field. 
Noes 10 
Green Party 6; Maori Party 4. 
Schedule agreed to. 
Clauses 1 to 3 
TIM GROSER (National) 
: 
 I want to take a brief call just to give a view about what I think is the bigger picture here because my first mokopuna was born about 16 weeks ago and she has moved already in 16 weeks from living in London to living in Hong Kong. That is the world she will grow up in but I hope obviously that she will become a New Zealander and will make a contribution here somewhere 20 years down the track. But the world that she and our other grandchildren—or for the younger members of the House our kids who are growing up and in primary schools now—will be living in is going to be fundamentally different from the world that I as a child grew up in some decades ago. This world will be different for a number of reasons but one of its absolute marked features is the rise in the importance of developing countries and this bill is ultimately related to that broader purpose. 
People of my generation have lived in a world that has been culturally and economically dominated by developed countries. The world in which my grandchild will be living will be totally different. It will not be dominated by developing countries because many of the countries that I have in mind when I make this point will no longer be considered then to be developing countries in any real sense of the word. It will be a much more diverse world and it will be a world I believe fundamentally that will be fairer that will involve far less poverty and that is already coming into view. It will be a world in which much will shift in favour of what we today call developing countries. 
In trade that is obvious; in emissions if we are looking at the future of a post-2012 Kyoto convention we see that at the moment around 60 percent of all emissions comes from developed countries. By 2040 that will change around almost exactly to the other side of the coin to where two-thirds of emissions according to the UN framework convention will be likely to come from what are called today developing countries. So this is part of a process. This clause which is designed to promote the development of these countries is a small piece of that puzzle. 
I believe that an enormous majority of New Zealanders have great sympathy for people in developing countries. Personally I am hugely discomfited by their problems of acute poverty and their lack of access to adequate food nutrition and education. But we obviously have differences of view in our community from that shared base about how best to address those issues. The differences are less acute now than 30 or 40 years ago when I look back on the debates I was involved in then but they are still replicated in this House in academic discussions and in media articles. 
They are basically the same two views and this bill puts them into that context. One view is that the global economy out there is a problem for developing country folk and that they must assert their control more clearly. They must try to keep out investment and keep out imports. That is the old import substitution model. In respect of this particular bill—the International Finance Agreements Amendment Bill—that model puts heavy restrictions on inward foreign investment. The other view—I will not labour the point—is obvious: it is growth as a non - zero-sum game. If developing countries open their economies to the ideas technology—and in this case investment flows—and join in international multilateral co-operative agreements such as this agency we are debating has this bill will work in their favour. Obviously I subscribe to that view and this is why National is supporting this bill. 
If members reflect on the empirical evidence over the last 30 or 40 years I believe that they will see that that view is unmistakably correct. We are now seeing a world in which far from the rich getting richer and the poor getting poorer developing countries as a group—without exception including those countries that are going backwards usually in Sub-Saharan Africa but also those other countries where there are massive problems—have been growing cumulatively about twice as fast over the last 20 years as the sum of all developed countries. Massive shifts are taking place in favour of developing countries in terms of world trade flows. In 1986 at the beginning of the launch of the previous multilateral trade round a mere 24 percent of developing country exports went from those developing countries to each other. In other words it was fair perhaps 25 years ago to see this as a north-south conflictual situation. When the Doha round was launched in 2000—24 years on—nearly 50 percent of developing country exports went from developing countries to each other. 
We are now seeing the rise of the two giant developing countries India and China which literally represent half of humanity. They have linked into the global economy and turned back from the earlier economic and political models of rigid control total obsession with their sovereignty and resistance to agencies exactly such as this. They have embraced inward foreign investment and outside ideas and have lifted hundreds of millions of people from poverty. 
So this bill—highly technical as it is—fits into what I think is one of the big stories of the world that my own grandchildren and younger members’ children will be living in. It is a world that will be very very different and it is a world awash with opportunities—both for New Zealand and for the individuals who have the skills and equipment to actually participate in it. Thank you. 
JOHN HAYES (National—Wairarapa) 
: 
 I am quite astonished by my colleagues from the Green Party because they were full participants in the Foreign Affairs Defence and Trade Committee which considered the International Finance Agreements Amendment Bill. At no point did they raise concerns about the bill put in a dissenting voice or vote against the bill. So it is quite astonishing to come to the floor of this Chamber and find them voting against it. 
I say to my colleague from the Maori Party Hone Harawira that I am sure he knows quite a number of Maori who own dairy farms and corporations that are raising money and investing in the future of their mokopuna by generating income from exporting dairy products. I will tell him that in 1994 when I was Ambassador to Iran we faced a situation where the Iranian Government defaulted on $100 million of letters of credit that had gone through the Iranian banking system. That money was owed to 14 New Zealand companies. Members may recall that Mr Cosgrove’s erstwhile colleagues Roger Douglas Mike Moore and I suppose David Lange got rid of the Export Guarantee Office. We used to have a State agency in this country that guaranteed the exports of New Zealand companies. The Export Guarantee Office had gone down the gurgler by 1993-94 and we were in a situation where those New Zealand companies—there were 14 of them—had potentially lost $100 million of their money. They were carrying the loss—not the State as used to be the situation. 
So I say to my colleague in the Maori Party that it is in the interest of his people who are engaged in dairying or logging for example to support this legislation. I will repeat to him that we are in a situation whereby this legislation and the risks that are covered by it—as set out in the convention in new schedule 7 of the principal Act—are about issues of currency transfer. That means that in a situation like that which occurred recently in the Solomon Islands were it a member—unfortunately it is not—when it hit the wall and could not provide enough foreign currency to meet its bills then this insurance scheme would have come into play. It would have come into play in Iran because Iran is a member were we members back then—when Australia was unlike this Government. 
If we think about a second area of new schedule 7 we realise article 11(a)(ii) of the convention will allow the covering of business risk where any legislative action administrative action or omission attributable to the host Government has the effect of depriving the holder of a guarantee of its ownership or control—in other words situations where the host Government takes something off the holder as could easily happen in Fiji where we have martial law at the moment. 
The bill also provides under article 11(a)(iii) of the convention in new schedule 7 for breach of contract. That is something that happens regularly in Papua New Guinea. This scheme is used for example to cover the Lihir goldmine. What is the Lihir goldmine about? It is about providing an export income to Papua New Guinea. It is about providing jobs to Papua New Guinean people. It is about using the money gained from the extraction and export of that gold from a very highly sophisticated goldmine in order to educate children. The money from that goldmine allows the Government to fund its anti-AIDS programme. AIDS is a huge problem in Papua New Guinea. That money can also be used to engage in roadmaking and to pay for heavy machinery imports—all sorts of things that ultimately are of benefit to the people of Papua New Guinea. I ask my colleagues in the Maori Party not to keep their heads in the sand. 
We also have to look at events in the Pacific area because under new schedule 7 article 11(a)(iv) of the convention also enables New Zealand companies—and particularly small to medium sized companies—to cover losses attributed to any military action or civil disturbance. I think there of Tonga. Do members recall that Tonga’s capital burnt down very recently? I think of the Solomon Islands. The capital there was burnt down too. I am still with article 11(a)(iv) of the convention in new schedule 7 where we have cover for civil disturbance. Those things are a reality in the Pacific. I know that the Government is burying its head in the sand and pretending we can use a megaphone to beat the heck out of the military regime in Fiji for example. That is to the detriment of New Zealand companies that are trying to do business there—for example running hotels exporting food and those sorts of things. Belonging to this insurance convention will insulate New Zealand companies particularly small to medium sized ones from the risks this Government is imposing upon them. 
It is also really important that we ask the Government to engage in encouraging those Pacific countries that are not yet members of the convention—for example Tonga and the Solomon Islands— to join it. When that happens their companies will be able to benefit from that membership. 
 If I could move on a little I notice that in article 32 of the convention in new schedule 7 there is a structure for appointing a board of directors. I would simply like to point out particularly to my Labour colleagues in the select committee—to our chair Dianne Yates to Paul Swain and to Jill Pettis—who will be leaving this House over the next few months or if not then certainly next year that there is a possibility of work after they leave this Parliament by finding themselves a slot as a director of the agency. That is really encouraging and it may be a way to help those people to move on. 
We warmly support the bill. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 109 
New Zealand Labour 49; New Zealand National 48; New Zealand First 7; United Future 2; Progressive 1; Independents: Copeland Field. 
Noes 10 
Green Party 6; Maori Party 4. 
Clause 1 agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 109 
New Zealand Labour 49; New Zealand National 48; New Zealand First 7; United Future 2; Progressive 1; Independents: Copeland Field. 
Noes 10 
Green Party 6; Maori Party 4. 
Clause 2 agreed to. 
A party vote was called for on the question  
That clause 3 be agreed to. 
Ayes 109 
New Zealand Labour 49; New Zealand National 48; New Zealand First 7; United Future 2; Progressive 1; Independents: Copeland Field. 
Noes 10 
Green Party 6; Maori Party 4. 
Clause 3 agreed to. 
Protection of Personal and Property Rights Amendment Bill 
In Committee 
Part 1 Miscellaneous amendments 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 Thank you for the opportunity to speak on Part 1 of the Protection of Personal and Property Rights Amendment Bill. This bill has arisen out of the Law Commission’s paper:  
Misuse of Enduring Powers of Attorney 
 in 2001. As I noted yesterday it is now 2007—an extraordinary time in fact 6 years since that paper—and finally this bill has come into Parliament. It does seem that it has taken a very long time for this Labour Government to finally get this legislation before the Committee given that it has the support of Her Majesty’s most loyal Opposition. National regards this as a reasonable bill but we are very concerned that it has taken so long to be brought here and that perhaps reflects quite directly on just how lackadaisical this Labour Government has become. 
I note that there is a curious statement about commencement in clause 2. It states: “This Act … comes into force 1 year after the date on which it receives the Royal assent (unless it is earlier brought into force on a date appointed by the Governor-General by Order in Council).” It does seem curious given the very long gestation of this bill after the commission’s report that it could be another year before the legislation comes into force. I would certainly exhort the Government to make sure that it actually is brought into use far earlier than that date. Perhaps the Minister in the chair the Hon Mita Ririnui may take a call and assure us that his Government will bring that about. 
Part 1 is really involved with miscellaneous amendments around persons who may apply for exercise of the court’s jurisdiction and it revolves around repealing paragraph (f) of section 7 and substituting the following paragraph: “where the exercise of the Court’s jurisdiction is sought in respect of any person who is a patient or a resident in any place that provides hospital care rest home care or residential disability care within the meaning of the Health and Disability Services (Safety) Act 2001 the principal manager of that place:”. It is important to point out that some have thought that this bill is to be confined to just the elderly whereas clearly and as I know my learned colleague Kate Wilkinson has mentioned earlier this bill does indeed apply to young and old. It applies to those who are disabled and to those in the whole spectrum of either mental disorders or physical incapability that may occur. So it is not just confined to one particular area; it is broad in its perspective. 
Clause 5 “Persons who may apply for exercise of Court’s jurisdiction” states: “Section 26 is amended by repealing paragraph (g) and substituting the following paragraph: (g) where the exercise of the Court’s jurisdiction is sought in respect of any person who is a patient or a resident in any place that provides hospital care rest home care or residential disability care within the meaning of the Health and Disability Services (Safety) Act 2001 the principal manager of that place:” Once again these miscellaneous amendments in Part 1 are important to make sure the coverage of the bill is comprehensive. 
Might I say once again that it is of concern to National that this bill has taken so long to come through—something like 6 years after the commission’s paper on the  
Misuse of Enduring Powers of Attorney 
. That is a lot of time and it does as I say reflect very badly on the Labour Government that probably tens of thousands of New Zealanders have not had the opportunity to benefit from this bill. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
KATRINA SHANKS (National) 
: 
 It is my pleasure to rise tonight to speak to Part 1 of the Protection of Personal and Property Rights Amendment Bill. Part 1 is a very small part—there are only two clauses in it—and basically it applies to persons who may apply for exercise of the court’s jurisdiction in terms of being “a patient or a resident in any place that provides hospital care rest home care or residential disability care within the meaning of the Health and Disability Services (Safety) Act …”. The bill itself is very important. It is one that has been underestimated I think in respect of the impact enduring powers of attorney have on people’s lives. This bill has been extremely well written. The officials are here tonight to listen to us talk to their bill. I congratulate them on the good work they have done. This bill will be in place for quite some time before it will need to be amended in years to come to stay relevant for our society for our ageing population and for the people who choose to use enduring powers of attorney. We had many submitters on this bill and I believe that none of them spoke to Part 1. 
The main issues coming out of the submissions related more to the cost of this legislation and the impact that that will have on enduring powers of attorney and the cost of enduring powers of attorney going forward. We had quite a few submissions from the community law centres around New Zealand. Really their main concern coming through in respect of this bill was the cost going forward and the regulations and conditions that will be imposed on enduring powers of attorney going forward because this bill is actually intended to safeguard and protect those users of enduring powers of attorney in our society. 
This has been great legislation which we are very proud to be part of. I was on the Social Services Committee that considered the bill along with Judith Collins—who is the deputy chair—Paul Hutchison and Bob Clarkson from the National Party Heather Roy Judy Turner Sue Kedgley the chair Russell Fairbrother and some others. It was a good select committee. We worked hard and we listened to the officials’ advice. We heard some very very good advice from the Law Commission. As always the commission put in a wonderful submission and had some great points which we took on board when we put this legislation together. 
Part 1 is very small very direct but also very important. These small amendments are normally the ones that trip people up as they go through so it is important that we get these little ones right especially for those people who are more needy. The more needy people are the ones who are actually using enduring powers of attorney and those who are in the hospitals and the rest homes and have respite care. Part 1 is very important for the most needy in our society whom it addresses. 
The Protection of Personal and Property Rights Act 1998 related to enduring powers of attorney. Obviously this bill came about through recommendations made by the Law Commission after a 2001 report was published on the misuse of enduring powers of attorney. There has been a little bit of a time lag between the 2001 Law Commission report being published and 2007 where we are today. It has taken a little while to get this legislation in front of the House but it is here now and that is the important thing. It is important that this legislation is here as it is a safeguard for all those who have been abused by not having an enduring power of attorney that worked well for them. 
It was interesting to hear from submitters that most of the people who were abused by their attorneys were abused by family members who were taking advantage of their parents or grandparents who were reliant upon them. These family members had the rights to do things and were abusing those rights. So this legislation has been very important going forward. We look forward to supporting it and I will be speaking to it later in the night. Thank you. 
Part 1 agreed to. 
Part 2 Amendments relating to enduring powers of attorney 
JUDITH COLLINS (National—Clevedon) 
: 
 It is my privilege to be able to speak tonight to this Protection of Personal and Property Rights Amendment Bill in the Committee stage. In particular I would like to point to clause 18 which affects section 103 of the principal Act in relation to the ability of people to apply to the court “to review any decision made by an attorney acting under an enduring power of attorney while the donor is or was mentally incapable:”. 
This is an extremely important provision. I say that because there have been instances—as my colleague Katrina Shanks has so ably pointed out—of people who have misused a power of attorney to benefit themselves others or their own families to the detriment of an elderly relative. In particular it is quite distressing for people to see that sometimes the most unkind people in these situations can be one’s own children. I think that many of us hope that our children do not do the same to us as others have. I think it is important to note that the donor—and this bill does accept the fact that donors can sometimes lose and then regain mental capacity—can ask for decisions to be reviewed. Other people who may apply for any decision to be reviewed are: any relative or attorney of the donor who is not the particular attorney who has made the decision; a social worker; a medical practitioner; a trustee corporation; the manager of a residence in which the donor is a patient; and any welfare guardian. 
So there are ample opportunities for those people who see or think that they see an abuse of a power of attorney being undertaken to do something about it. It is really important to have that standing and one of the best things about this particular part of the bill is that it allows that. Many of us will have worked with people from Age Concern and with other people who are involved in the area of preventing elder abuse and these people have said that that provision is particularly important. That is why the Social Services Committee inserted subsection (h) in section 103 to allow for “a person authorised by a body or organisation contracted by the Government to provide elder abuse and neglect prevention services” to also apply for the decision to be reviewed. So there is ample opportunity to review a decision. 
Hopefully people will never need to apply for a review. Hopefully the message will get out there that the enduring powers of attorney which were set up to help people whose health—in particular mental health—had declined often in their advanced years will not be able to be misused again. Obviously some people will try but at least we now have a mechanism—a very good mechanism I believe—for people to be able to deal with that. 
In conclusion I say that I am very pleased with this bill. I think that Part 2 is a good part. It is the main part of the bill it is sensible law and it is one that I think everybody on the select committee was able to agree with and be proud to be part of. 
Hon RUTH DYSON (Minister for Senior Citizens) 
: 
 I first of all add my thanks to that already given to the officials who have worked so hard and constructively with the Social Services Committee on this bill. I also repeat the comments I made in my second reading speech and thank the select committee. It is not well known amongst the public of New Zealand that policy differences are often put aside during the select committee process for the betterment of bills and this has certainly been an example of that. So I acknowledge all of the members of the select committee rather than just those of my own party which I do not think is very appropriate to do at a time like this. 
I also want to address Supplementary Order Paper 145 in my name which proposes a number of changes that I draw to the attention of the Committee. It starts off with changes to clauses 7 and 8. These are technical changes that clarify the relationship between new section 94(A) which specifies the requirements for creating an enduring power of attorney and section 95 of the principal Act which sets out when a power of attorney is an enduring power of attorney. That is the first change set out on my Supplementary Order Paper. 
The next change replaces subsection (1) of new section 94A with a new subsection that provides that section 94A applies only to powers of attorney executed after the bill comes into force. That clarification is obviously needed. It inserts new section 95(1) to provide that: “Except as otherwise provided in this section a power of attorney that meets the requirements of section 94A is an enduring power of attorney.” So they are points of clarification. 
The next change proposed in my Supplementary Order Paper is to clause 15. It basically corrects an earlier oversight in new section 100A which as the explanatory note of the Supplementary Order Paper states: “enables a donor of an enduring power of attorney who has been but is no longer mentally incapable to suspend the attorney’s authority to act under the power.” This amendment ensures that the court’s determination of the donor’s mental incapacity if any is taken into account for the purposes of this new section. 
The next clause that is amended by my Supplementary Order Paper is clause 16. That is a technical amendment; it just removes an incorrect section reference from the principal Act so I am sure there will not be a lot of debate about that. 
Then the next amendment is to clause 18—the part of Part 2 that the member who has just resumed her seat Judith Collins spoke to. The proposed amendments to this clause relate mainly to new section 103A. It is amended to provide consistency of wording as a consequence of the changes I referred to in clauses 7 and 8. It also corrects a minor drafting error so that we have terminology that is consistent and I know that members in this Chamber will be particularly interested in that consistency. 
The next changes which are the final ones in this Supplementary Order Paper are to clauses 21 and 24. They are further technical amendments that correct minor drafting errors for consistency of terminology by replacing “made” with “executed”. I am sure the Supplementary Order Paper will continue to be well supported by parties in the Chamber. It is a pleasure to be able to progress with strong support legislation whose primary purpose is to give better financial protection and to ensure that the persons’ interests are carried through when they are no longer able to make decisions for themselves. 
We now know that the most vulnerable people in our society who are dependent on some other trusted person to make a decision for them will have much stronger backing from the law to make sure that that trust is not abused. Sadly for us all that trust is abused by members of families. In fact that is the biggest concern in terms of elder abuse and neglect that is referred to the services that our Government funds throughout the country. Perhaps it is the one that is the most reported but it is certainly one that we are taking big steps to address in this legislation so I urge its speedy progress throughout the Committee stage. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 I am grateful for the opportunity to speak on Part 2 of this Protection of Personal and Property Rights Amendment Bill. It is good to see the Minister in charge of the bill Ruth Dyson in the chair and I hope that at some stage of events she will answer the question that has been on my mind for quite some time: given that the commission’s report was in 2001 why has it taken so long for the Labour Government to finally bring this legislation to the House? Her Majesty’s most loyal Opposition is supporting this bill—we believe that it is sensible—but we are concerned that the Labour Government has prioritised other things and indeed that it has taken it so long to bring in something sensible. Perhaps the Minister will tell us why it has taken so long. 
I would like to start off by commenting on new section 93B “Presumption of competence” inserted by clause 6. I make the point here that new subsection (4) states: “A person must not be presumed to lack the competence … or as the case may be the capacity described in subsection (1)(b) just because the person is subject to compulsory treatment or has special patient status under the Mental Health (Compulsory Assessment and Treatment) Act 1992.” I am sure the Minister would agree it is absolutely appropriate that that is clearly spelt out. 
We go on to creating the enduring power of attorney. I was very pleased to see that some of the constructive submitters caused a change to be made to the bill in terms of witnesses to the signature of the donor. It will be possible for not only a lawyer or an officer or employee of a trustee corporation but also a legal executive who meets the requirements of new section 94A(9) inserted by clause 7 to witness a signature. I must say that the New Zealand Institute of Legal Executives made an excellent submission. It pointed out the range of things that legal executives do and that they currently undertake this work anyway—both large and small drafting. It mentioned an informal email survey of its members that had something like a 76 percent response rate and that these executives are regarded as highly competent in their explanations to their donor clients. Much to my surprise on average legal executives are doing this two or three times a week—up to 200 times a year. The institute had very strong support from both the Law Society and Chapman Tripp in its submission so it is very pleasing to see that indeed the institute’s submission has been taken notice of and that provision is within the bill. 
Finally I want to comment on one of the Minister’s amendments in clause 15. I agree that we should support the point made in new section 100A(1) which states: “A donor of an enduring power of attorney who has been but is no longer mentally incapable may suspend the attorney’s authority to act under the enduring power of attorney …”. It is absolutely vital to have that correct. It would have been an awful anomaly if it were not so National will be supporting that very very cogent issue. 
It is with pleasure that I have spoken on this bill. National will support it as we go on in the debate. 
RUSSELL FAIRBROTHER (Labour) 
: 
 It is my pleasure to follow the previous speaker Paul Hutchison who wobbled around the point until he thought of something to say which was very typical of his contribution in the select committee process too. His concern was mostly with the pineapple slices on the table instead of getting to the meat of the subject. 
I was delighted to hear the Minister Ruth Dyson say that great camaraderie had broken out in the select committee. That may well be an exterior witness’s viewpoint of it but I have to say it was an enjoyable select committee for only two reasons: one because of Michelle Malyon who left the committee today to go to richer pastures and who will be a loss to the Clerk’s Office; and two because the committee was very well led and because during the time of its being very well led some of the contentious matter was dealt with. 
Hon Member 
: Who by? 
RUSSELL FAIRBROTHER 
: Georgina Beyer. Then a new leader took over and we got to the substance of the matter. 
Tonight in the 5 minutes available to me I first of all want to make clear that enduring powers of attorney have two forms: the property enduring power of attorney and the personal care and welfare enduring power of attorney. Those two forms are often mistaken and muddled up. They are muddled up and amalgamated into what is known as a living will. Neither of those powers of attorney are living wills. In fact there is no such thing as a living will although people talk about them as though they are some great invention of the neo-liberals opposite. 
Judith Collins 
: What? 
RUSSELL FAIRBROTHER 
: Yes I knew that member might be listening. 
Judith Collins 
: I’ve been called many things but never a liberal. 
RUSSELL FAIRBROTHER 
: And never new either. 
 I want to talk particularly about clauses 9 and 10 of the bill. 
Dr Richard Worth 
: Clause 9 has been deleted. 
RUSSELL FAIRBROTHER 
: Oh that member wishes it had been deleted because it is about property. The onus upon a lawyer is now much more considerable and the charging practice of that interjector would never make him capable of doing properly the work of an enduring power of attorney in property matters. I draw that member’s attention to subsection (4) of section 97 inserted by clause 9. The subsection imposes an obligation on the attorney to be forever vigilant as to the welfare of the donor. The term “the welfare of the donor” is a concept that is quite strange to that member who interjected before but I have to say that at the end of the day even property matters have ultimate beneficiaries—individuals and human beings—none more so than those covered in new subsection (4) in section 97 which will be inserted by clause 9 of this bill. 
New subsection (4) provides that the donor may authorise the enduring power of attorney to have effect while the donor is mentally capable and to continue to have effect if the donor becomes mentally incapable or only if the donor becomes mentally incapable. There is an important difference there that we should remember. It is clarified in the bill. The enduring power of attorney for property matters arises from one of those two matters. 
I really want to talk about clause 10 of the bill which inserts new section 97A. This amendment imposes on an attorney quite a high threshold of obligation. New section 97A describes how an attorney under an enduring power of attorney in relation to a donor’s property is to exercise that power if the donor becomes mentally incapable. Referring to subsection (2) of section 97A the obligation of the attorney is such that: “The paramount consideration of the attorney is to use the donor’s property in the promotion and protection of the donor’s best interests”. That statement may seem obvious but in my submission this is where the important part comes in. Subsection (2) goes on to state: “while seeking at all times to encourage the donor to develop the donor’s competence to manage his or her own affairs in relation to his or her property.” 
In my submission that is one of the remarkable features of this bill and is a remarkable amendment to the present Act. It brings to the forefront the obligation even for property powers of attorney to have regard to the well-being of the donor at all times and to encourage the donor to develop competence in the management of his or her own affairs. The stories are legion about lawyers particularly—provincial lawyers often—who become set in their ways. They become so set in their ways—[ 
Interruption 
] as is demonstrated by the heckling from the rather hardened members of the National Party on the other side—that despite the best will in the world they proceed to set up law practices that manage wills and powers of attorney as though they are self-enduring and self-fulfilling functions. 
Law firms in the modern day have policies in place that will enable them to check that their staff are meeting their obligations. The alterations brought about by new section 97A bring to the forefront the fact that at all times the obligation to deal in good faith with property is not the only obligation. The very real obligation is to make sure that the donor’s well-being is at the forefront so much so that he or she is encouraged to gain competence to manage his or her own affairs. 
Last night during the second reading debate I spoke about the ability of mental health patients to still be considered capable of managing aspects of their affairs. New section 97A inserted by clause 10 embodies that principle in very stark reality. 
I conclude speaking on this part in the Committee stage by saying that I consider it a matter of great moment that a bill that deals with property rights and enduring powers of attorney carries that very human requirement to have regard for the donor and to at all times administer the property obligations with a view to encouraging the donors themselves to regain competence so they can manage their own affairs. 
The twilight is nigh for the lawyers who in the past took it upon themselves to have a power of attorney and go off on a tangent often leaving the beneficiaries and donors in the wake unable to respond to or to take issue with what they sensed was wrong but were not able to articulate. 
This bill is a very good amendment to the Protection of Personal and Property Rights Act. It is an amendment that reflects the current thinking of an enlightened Government which reflects the long gestation period that Dr Hutchison referred to before. Emerging from that long gestation is a very finely tuned bill. It was honed out by a very attentive select committee and it has been delivered to a very diligent Minister for consideration by this very very considerate Committee. 
The question was put that the amendments set out on Supplementary Order Paper 145 in the name of the Hon Ruth Dyson to Part 2 be agreed to. 
Amendments agreed to. 
Part 2 as amended agreed to. 
Clauses 1 to 3 
JUDITH COLLINS (National—Clevedon) 
: 
 Generally the Protection of Personal and Property Rights Amendment Bill is one that I think everyone can agree with but there are a couple of little things I would like to point out. It is not a bill to be taken lightly because obviously powers of attorney—particularly enduring powers of attorney—are incredibly important documents. 
I was re-reading some of the clauses and in particular clause 20 which substitutes section 107 of the principal Act. I noted that attorneys cannot actually benefit from their actions as attorneys in relation to property. That is good except of course if this deals with families where for instance the husband or wife or partner—one of them—is mentally incapable and the other needs to deal with the property that they may jointly own. 
I thought that this was the sort of clause that could trip up people who have an enduring power of attorney and believe they can do what they need to do. It is a measure that will require advice particularly in relation to subsection (1)(c)(i) which states that an attorney may benefit in certain circumstances “if the attorney and donor are married to or in a civil union or de facto relationship”—whatever that means—“with each other and are living together and sharing their incomes”. So in other words if one of them is living in a rest home or a hospital then they are not living together and sharing their incomes. Many of us will know of many married couples de facto partners civil union partners and others who do not actually share their income. So they would not be able to benefit from this provision. They will not be able to use it. 
Paragraph (i) goes on to state the circumstances in which the attorney in such a relationship may benefit as being in “any action taken by the attorney in respect of real or personal property that the donor and the attorney own jointly and not as tenants in common:”. Some people remember how the whole joint tenants and tenants in common issue is used particularly in law. It is one of those things I think that those of us who are lawyers and have practised in this area will understand the ramifications of. But it is the sort of thing that could trip up a very well-intentioned person who happens to have a power of attorney for their partner wife husband or whatever and who thinks they are doing the right thing. They could very easily trip on that issue because they have not had specific legal advice that actually pertained to it. 
The Law Society will need to make sure that lawyers are aware of this issue and also by the way that legal executives are aware of it. It will be incredibly important that we do not have the unintended consequence of people who think they are doing the right being thing caught up by the fact that they are either not living together now—because for example one is in a hospital or a rest home—and not sharing their incomes or they own the property as tenants in common rather than as joint tenants. I think that issue will need to be very carefully looked at. I hope that the New Zealand Law Society and its branches are able to give people some good advice on it and to make sure that their members—the lawyers legal executives and others—are fully aware of this issue. It will be very important for trustee corporations as well when they are giving advice. 
In conclusion the National Party supports the Protection of Personal and Property Rights Amendment Bill; we think it is a good bill. After 19 years of enduring powers of attorney it was time the Act was updated but no doubt we will have to revisit it at some other stage as circumstances change and people’s lifestyles change as well. 
KATRINA SHANKS (National) 
: 
 It is my privilege once again to stand tonight and speak to the Protection of Personal and Property Rights Amendment Bill. For those Aucklanders who are still in rush-hour traffic on their way home tonight I hope this debate is good listening for them. Hopefully they are not too far away from home. And for those mothers who have just picked up their children from care and have young children in the back of their cars in the traffic jams in Auckland I hope that they enjoy listening to this debate tonight and that they are not too far away from home. Many of those mothers like myself know what it is like to have children in their cars late at night and they will be feeding dinner to their children in the back now some way or another. So I hope that they get home safely and that they are not too far away. 
The Protection of Personal and Property Rights Amendment Bill may not affect those women in their cars in Auckland at the moment but moving forward it certainly will affect their parents and their grandparents. I would like to talk about the dates surrounding this bill. Enduring powers of attorney have been around for 19 years—Judith Collins just spoke about that. Judith Collins is deputy chair of the Social Services Committee alongside Russell Fairbrother who chaired it. They both did a good job. We worked hand in hand on this and produced good legislation and we worked alongside the officials of course who gave us a lot of help. 
I would like to talk about the time frames surrounding this legislation. Enduring powers of attorney have been around for 19 years as I mentioned just before. In 2001 the Law Commission or Law Society did a review— 
Dr Paul Hutchison 
: Commission. 
KATRINA SHANKS 
: I thank the member very much. In 2001 the Law Commission came up with the paper  
Misuse of Enduring Powers of Attorney 
 so it has taken a little while for this legislation to get here tonight in 2007. That is 6 years. 
I will talk about a submission that we received in the select committee from representatives of Alzheimer’s New Zealand. They talked about looking at the legislation again in 1 to 3 years to ensure that it is still relevant and that its intent—which was to safeguard and protect those who have enduring powers of attorney who are the most vulnerable in our society—is relevant and that it is doing the job it should be doing. I think it is a great idea to look at legislation and ensure that it is current in the environment and that its intention and purpose actually accords with what is happening out there in real life. That is what legislation is about; it is about making it relevant in people’s lives and actually making a difference. 
The people from Alzheimer’s New Zealand brought up a couple of interesting things. They brought up the need for a register for enduring powers of attorney—which the committee did not take on board—because there was a discussion about how people can make more than one enduring power of attorney. They can have a number of enduring powers of attorney out there and no one would be quite sure which was the last registered enduring power of attorney. People might think they have enduring powers of attorney for other people when they actually have not—they have been overwritten with a new enduring power of attorney. So this organisation came up with the suggestion that a register be put forward for enduring powers of attorney and that is something we looked at at the time. 
Alzheimer’s New Zealand was very concerned about continuing community education and continuing education for the public so that people would understand the changes in this legislation around enduring powers of attorney. The organisation was also concerned that the people who need the information most actually have access to it which was a very valid point. The other point Alzheimer’s New Zealand raised was about welfare guardians. The Social Services Committee looked at those issues and although the organisation’s submission was very well written we did not take it on board; we kept focused on the legislation that we have produced tonight. 
So for those who have just tuned in and are listening to us I would say that— 
Dr Richard Worth 
: Welcome! 
KATRINA SHANKS 
: Yes welcome. Enduring powers of attorney are important for us and for our families moving forward. It is our pleasure to support this good legislation tonight. Thank you very much. 
Clause 1 agreed to. 
Clause 2 agreed to. 
Clause 3 agreed to. 
Bill to be reported with amendment presently. 
Property Law Bill 
In Committee 
Part 1 Preliminary provisions 
Dr RICHARD WORTH (National) 
: 
 It is a bit unusual really to start off this debate without a prefatory comment from the Minister. I am a bit surprised by that because this is important legislation which has a history that in recent times has gone back to 1952 but beyond that it goes way way back to the conveyancing ordinances of 1842. There is a shameful aspect to it which I would like for just a moment to refer to—that is we are here faced with legislation that was the basis of a very careful report by the Law Commission some years ago and it has taken all this time to come to fruition in the parliamentary process. It was I understand in 1994 that the Law Commission completed a report on this important topic yet it was not until 14 November 2006 that the Government introduced this legislation. 
One of the current issues in Parliament is this word “property” and the scope of this word and in the last few days that has been an issue that this Parliament has had to revisit in a number of contexts. But here we have a very broad and sweeping definition. “Property” means everything that is capable of being owned whether it is real or personal property and whether it is intangible or tangible property. In the context of some seven parts to this legislation there is an opportunity of course to take multiple calls but I would just say that in respect of Part 1 where we are dealing with preliminary provisions what is at issue here is the purpose of the legislation and a raft of definition provisions. I notice that the Act will bind the Crown which is surely appropriate and there are some other general and enabling provisions. 
I commend Part 1 to the Committee. 
CHRIS AUCHINVOLE (National) 
: 
 I would like to join my colleague Dr Richard Worth in commending Part 1 of the Property Law Bill to the Committee. We spoke at the second reading of this bill last night and as my colleague has said this is a very important bill. It probably is too. I have not weighed it and I have not counted the pages although I guess they are numbered but it must be one of the largest bills before the House as well. Perhaps not—the Minister in the chair Ruth Dyson is not sure. 
Hon Ruth Dyson 
: That’s the tax bill. 
CHRIS AUCHINVOLE 
: The tax bill is larger. OK that is significant. But this is a substantial bill and indeed it is a very important bill because property and its correct definition is something that affects all of us to varying degrees right throughout our lives. It is interesting to see where the— 
Hon Member 
: Cradle to grave. 
CHRIS AUCHINVOLE 
: That is right—and even after. 
Hon Ruth Dyson 
: Can’t take it with you. 
CHRIS AUCHINVOLE 
: Well an awful lot of people when we look at the Wills Bill try to determine how things will happen from the grave. 
To give members an instance of how important the definition of “property” is and how important mortgages and attendant qualifications are I will tell members about a press release I got from the West Coast today that reflects on the significance of mining licences or permits as property. It was about a case where a West Coast company has received another setback with the Court of Appeal effectively ruling that the licence the company bought for $45 million in 1997 has a real value of just $290000. The managing director said that he was totalled by the decision. 
 It was an interesting case. The genesis of it was in terms of property a mining licence that in 1994 had a value of $100. It was first issued to two partners in one company; it was transferred to a further company for $5000; it was later transferred to yet another and another after that for $10000; and then the value of the resource was put at $45 million to $180 million. The valuer was prepared to go to the larger figure but the value was set at $45 million. It was estimated the extraction value of the stone would be $4000 a tonne and there were 15000 tonnes. A transaction occurred but all was lost after the settlement. A debenture and mortgage of shares were executed the trust account of $44920000 was delivered to the purchaser but the Chief Inspector of Mines in January 2000 withdrew a consent for the modified work programme that had been lodged 2 years earlier. By the time the licence expired in 2000 the company Glenharrow Holdings had extracted only 3600 tonnes of stone. So the legal complications go on and on and on. 
It was interesting to be part of the select committee that examined the Property Law Bill. I guess the best contribution one can make to this part of the debate is to signify parts of the report of the Justice and Electoral Committee. In the case of Part 1 probably one of the significant things—and it was discussed earlier in the last bill debated the Protection of Personal and Property Rights Amendment Bill—was the irrevocable powers of attorney. It was recommended that “clause 21 of the bill be amended to make clear that it applies in favour of purchasers. This ensures that the current law contained in sections 136 and 137 of the Property Law Act is retained and helps to make it clear that third party purchasers are protected.”  
This is a long bill—I think there are seven parts. I am sure that those who are in the Chamber are familiar with the bill and there is little point in talking it to death. So I will restrict myself to that much on Part 1. 
The question was put that the amendments set out on Supplementary Order Paper 146 in the name of the Hon Clayton Cosgrove to clause 4 be agreed to. 
Amendments agreed to. 
Part 1 as amended agreed to. 
Part 2 General rules relating to dispositions instruments transactions and property 
The CHAIRPERSON (Ann Hartley) 
: The debate on this part includes schedule 1. 
Dr RICHARD WORTH (National) 
: 
 Part 2 of course is concerned with general rules relating to dispositions instruments transactions and property. It has some seven subparts which separately deal with a range of issues of interest to lawyers but not I suspect to the general public. Subpart 1 deals with deeds powers of appointment disclaimers and powers of attorney. Subpart 2 which I wish to deal with at some length deals with writing required in certain cases. Subpart 3 deals with sales and other similar transactions. Subpart 4 deals with the apportionment of periodical payments between vendors and purchasers. And there are three more subparts which deal with particular issues. 
I was drawn—as I am sure the Minister would similarly have been drawn—to this curious provision in clause 22 which is entitled “Persons between 18 and 20 years may do certain things”. It is perhaps a statement of where the Labour Government is that it now is legislating for people in various age ranges as to what particular activities they are permitted to undertake. Clause 22 allows persons between 18 and 20 years of age to carry out a number of activities—some of which it may be that this Parliament would not approve of. But surprisingly clause 22(2) states: “Anything done by a person under subsection (1) has the same effect as if the person were 20 years old.” None of that is terribly clear to anyone interested in these matters. 
I also noted just looking at these technical issues that have so bogged down the Government and have resulted in the incredible delay in the legislation being introduced that in clause 23(2)(a) it states: “words denoting a gender include every other gender:” Now that is a very interesting statement because most of us would have a view that there were two genders—masculine and feminine. But the Government has opened up a new possibility—perhaps more than one—that there may be genders apart from male and female that should be given specific consideration in this legislation. I rather doubt that but it seems that it was an important point for the Government to make in this legislation. 
What I think is probably more significant in Subpart 2 is that it records two obligations that have always been critical from the perspective of property lawyers—that is that contracts for the sale and purchase of land need to be in writing. The bill makes it clear that a doctrine called the doctrine of part performance still applies. There was an opportunity to make a change there. I am glad that no change has in fact been made because probably in the reality of property transactions in the course of a person’s life the buying and selling of his or her home is the most significant transaction—apart from marriage—that he or she enters into. It is important that there be a clear understanding as to what the terms of the deal are. That is why clause 24 provides that contracts for disposition of land are not enforceable unless in writing. 
The other provision clause 27 is about guarantees. From a practical lawyer’s perspective it is clearly appropriate that contracts of guarantee be in writing. I also commend that particular provision. 
CHRISTOPHER FINLAYSON (National) 
: 
 That was what one would expect from Dr Worth—an outstanding contribution. So I do not need to spend long dealing with Part 2 of the Property Law Bill. It is a very interesting part of the bill. Subpart 1 brings together rules about deeds powers of appointment and powers of attorney which may seem to be dry dusty and boring but which are actually very important indeed. Those changes will result in the repeal of quite ancient legislation. 
For anyone who is interested in law reform and in some of the changes that are being made by this legislation one need go no further than Subpart 7. I am surprised that Dr Worth who is such an eminent legal historian did not spend some time looking at Subpart 7 because it deals with the abolition and modification of common law rules relating to property. 
Dr Richard Worth 
: Well I’d better take another call then. 
CHRISTOPHER FINLAYSON 
: I think Dr Worth should take another call because I very much would like to hear from him about the effect of clause 57 and the abolition of feudal incidents of estate in fee simple. In fact I would love for the Minister to take a call and explain that to us. That really would be interesting. 
I ask members to look at clause 58—and I think Dr Worth could address this as well—which is entitled: “Abolition of obsolete estates and rules”. I ask members to look at what is going as a result of this ground-breaking legislation constituting such a major reform of property law for the first time in 55 years. Under clause 58(1)(a) estates tail and estates by wrong go. Under clause 58(1)(b) the making of a forfeiture by any conveyance goes. Under clause 58(1)(c) the passing of the legal estate in any land by certain means—a covenant to stand seized and a contract for the sale and purchase of land—goes. 
Indeed one of the changes that the Justice and Electoral Committee made was to remove the provisions of clause 58(3). Members of the Committee will see that originally this clause as drafted would have abolished the rule of law known as the rule in Shelley’s case. I would be most grateful if the Minister could take a call and explain to us what the rule in Shelly’s case was. We took the view that the rule in Shelley’s case had already gone. I refer members to page 2 of the commentary which talks about the rule in Shelley’s case and to the fact that section 22 of the Property Law Act 1952 had already abolished that rule. Unless one is a member of New Zealand First—whose members have a tendency to introduce legislation that seeks to repeal or abolish points of law or rules of law that have already been abolished—there would seem to be no point in trying to do that. 
This is a very interesting subpart. It is the sort of thing that will interest law students in years to come. These ancient common law rules relating to property all go in this modernising statute. I commend Subpart 7 to members because it does make very interesting reading indeed. 
Part 2 is very important. It deals with the general rules relating to dispositions instruments transactions and property—the sorts of things that affect all of us on a day-to-day basis—and as I said Subpart 7 deals with the modification and abolition of common law rules relating to property. It is very interesting it is very important and at the end of the day it is very practical. That is why National is supporting Part 2. 
Dr RICHARD WORTH (National) 
: 
 I am glad that Mr Finlayson has drawn our attention to clause 58 “Abolition of obsolete estates and rules”. I think it is important to note—and probably the Minister will speak about this—that we are now seeing abolished some rather critical provisions that I think well stood the test of time. I am talking obviously of a covenant to stand seized livery of seisin and a contract for the sale and purchase of land. But what I would like to direct the attention of the Committee to is not clause 58 which Mr Finlayson has spoken on so well but rather to clause 60 where we see I think with some sadness the doctrine of interesse termini abolished. 
I hear from members of the Committee perhaps rumblings of concern to see that doctrine abolished. It was a seminal part of land law and it certainly I think detained many conveyancing practitioners as with pens poised they looked to see whether changes might be made to a particular conveyancing document. The way that the Justice and Electoral Committee approached the matter has been to strike out that particular provision and substitute what is probably a much more workable framework. So not only is the doctrine of interesse termini abolished but additional provisions of a most helpful nature have been added. I think probably the most helpful is clause 60(2) which states: “A lessee acquires an estate in the land on the date fixed for the commencement of the lease whether or not the lessee enters into possession of the land on that date.” That is a provision that I think it is worthy of particular note. 
The question was put that the amendments set out on Supplementary Order Paper 146 in the name of the Hon Clayton Cosgrove to Part 2 be agreed to. 
Amendments agreed to. 
Part 2 as amended agreed to. 
Part 3 Mortgages 
The CHAIRPERSON (Ann Hartley) 
: The debate on this part includes debate on schedule 2. 
CHRISTOPHER FINLAYSON (National) 
: 
 I will take a brief call to talk about Part 3 because again it deals with something that is really very practical for most New Zealanders and that is mortgages. I think that an excellent job was done by the Law Commission in reporting on this particular area of the law and I commend the Ministry of Justice which took the commission’s report and dealt with some very complex issues of law reform in the area of land and which has done it very well in Part 3. 
There are a couple of minor amendments but again I repeat what I said in the House during the second reading debate yesterday: the quality of work that was done is reflected in what is really the paucity of reports or comments from the Justice and Electoral Committee on this area. I think we recommended that clause 77A be inserted in the bill. The reason for that as the commentary says is to clarify the relationship between this bill and the Personal Property Securities Act. But really there is not too much of any great moment here that one needs to dwell on. It is one of those areas as I have said in the House in the last few days in relation to other statutes that one could spend a lot of time on or briefly summarise. 
But the key point that needs to be made is that Part 3 brings together all the rules relating to mortgages and it is a splendid piece of work. That is all I think I need to say. 
CHRIS AUCHINVOLE (National) 
: 
 I would agree with both my colleagues who have spoken previously and I say to Dr Worth that I too shared his sense of distress initially at seeing the doctrine of interesse termini being abolished. But I daresay it is something that one comes to terms with. 
I also shared the views of my colleague Chris Finlayson in recognising that Part 3 is a very useful codification of mortgages and other things. Just to deal with one particular aspect of that and not to take the Committee’s time unduly I bring to the attention of the Committee the terms and conditions of leases where the Justice and Electoral Committee has recommended that an amendment be made to clause 142(2)(a) to require the inclusion of all renewal terms in the maximum lease term. The clause as introduced requires the term of lease entered into by a mortgagee in possession not to exceed 2 years in a residential tenancy or 15 years in any other case except with the consent of the mortgagor or a court. The committee considered that the clause as introduced is ambiguous about whether renewal terms are included in the 15-year period and the last thing one needs in mortgage agreements is ambiguity. Thank you. 
The question was put that the amendments set out on Supplementary Order Paper 146 in the name of the Hon Clayton Cosgrove to Part 3 be agreed to. 
Amendments agreed to. 
Part 3 as amended agreed to. 
Part 4 Leases of land 
The CHAIRPERSON (Ann Hartley) 
: The debate on this part includes schedule 3. 
Dr RICHARD WORTH (National) 
: 
 In this long-running Committee debate on the Property Law Bill we see in Part 4 key provisions relating to the leases of land. There is only really one provision that I think is worthy of comment in the Committee stage although I am sure other members will have other issues that detain them. But I would like to direct the attention of the Minister to clause 265 and ask a number of questions of him because tricky legal issues arise here. Clause 265 is concerned with the removal of fixtures by the lessee. The lessor is the landlord; the lessee is the tenant. Clause 265 reads in part: “A lessee may remove any trade ornamental or agricultural fixture (except a lessor’s fixture) that the lessee has affixed to any leased premises” but only on two conditions. The first is while the lessee is in lawful possession of the premises; or during a reasonable period after the lease ceases to apply in the particular case. 
I just note the provisions of clause 265(3) that a lessee who exercises a right to remove a fixture has some very precise obligations. The first is to cause as little damage as possible to the leased premises; the second is to make good any damage caused; and third to accept a compensation obligation. In that context I am sure members of the Committee who may have been in the position of being a tenant will know about the disputes that break out between landlord and tenant on fixture removal issues. Here we see a carry-forward of old law and a clarification in plain English of obligations that certainly needed that degree of precision and rewording. 
CHRIS AUCHINVOLE (National) 
: 
 I selected clause 224 of Part 3 of the Property Law Bill to speak on because I felt that as a non-practitioner in a legal sense I would find it easier to understand. 
It is an interesting point that the Justice and Electoral Committee recommended this particular clause be amended to allow a commercial lease to include an absolute prohibition on changing the use of the leased premises. At first I was struggling to understand why that would be a good idea but this amendment is particularly relevant to the multi-tenancy permits and premises—for example malls where retailers depend on all the premises in the complex being used for their designated purpose. This amendment would ensure that a lessee was limited in the use to which he or she could put a specified lease and it would protect the interests of the lessor and others in the vicinity of the lease. 
The select committee considered the potential interpretation and the effect of this recommendation and it was one of the very few clauses that attracted a number of submissions. I should say that being on the select committee one of the biggest disappointments was the lack of submissions—particularly from the legal fraternity. But the select committee considered that such an amendment would create a workable balance between the interests of lessors and lessees and would ensure more certainty in practice while reducing the potential involvement of the courts. So it was recommended that the clause be amended to avoid misinterpretation and to make it clear that the lessor can claim legal costs and expenses only if entitled to do so under the lease. 
The select committee also considered recommending an amendment that would allow all the parties to a commercial lease to agree on the conditions to be satisfied by a lessee before a sublet can be signed in order to provide greater certainty to parties. However such an amendment might similarly remove the ability of the court to determine whether a lessor’s consent was unreasonably withheld. It was recognised that this would be a significant change to the current law and it was considered not to be in the best interests of the parties involved. For those reasons it was recommended that the existing provision be retained. Thank you Madam Chair. 
The question was put that the amendments set out on Supplementary Order Paper 146 in the name of the Hon Clayton Cosgrove to Part 4 be agreed to. 
Amendments agreed to. 
Part 4 as amended agreed to. 
Part 5 Covenants easements profits and access lots  
The CHAIRPERSON (Ann Hartley) 
: The debate on Part 5 includes debate on schedules 4 and 5. 
The question was put that the amendments set out on Supplementary Order Paper 146 in the name of the Hon Clayton Cosgrove to Part 5 be agreed to. 
Amendments agreed to. 
Part 5 as amended agreed to. 
Part 6 Special powers of court 
CHRISTOPHER FINLAYSON (National) 
: 
 So far as I am aware no changes were recommended by the Justice and Electoral Committee. No I am wrong; there was one which related to clause 333—so I will come to that in due course. But I simply say that Part 6 outlines some special powers of the court in various situations and brings into this legislation some provisions that I think were included in a number of amendments to the Property Law Act 1952. Some of the circumstances in which the court is required to exercise these special powers are interesting indeed. For example Subpart 1 deals with entry on to neighbouring land and Subpart 2 deals with wrongly placed structures—a situation that can occur from time to time. 
Subpart 3 is very interesting and the problem of landlocked land sometimes does arise. When I was in practice I can recall being involved in a number of cases where someone wanted to get access to some land that was landlocked and needed to apply to the court to enable an order to be made so that the neighbour would be required to grant reasonable access to landlocked land. I am not saying that the issue is an everyday occurrence in the courts but it is one that does arise from time to time and we need to have clear rules to enable justice to be done in the particular circumstances. 
Subpart 4 is one of those areas that causes a great deal of upset between neighbours. The number of times neighbours fall out over trees and unauthorised improvements on neighbouring land is surprising. Indeed the court may make orders for trimming trees or for removing and altering structures if the trees or structures are causing a nuisance or some kind of injurious affection to a neighbour. I have had a number of those cases in my time and I can assure the Committee that nothing creates greater tension between neighbours than a tree that has grown too large. Indeed I can recall a case in Lower Hutt where there seemed to be a problem with a tree and when one of the applications was going to the court it was suddenly found that the tree had been poisoned and was dying. That was one way of dealing with the issue but it was certainly not in accordance with the Property Law Act or indeed in accordance with the criminal law. 
So Subpart 4 sets out some provisions to deal with this issue which as I have said can cause so much trouble between neighbours and it is in that context that the select committee recommended a minor change. We recommended that clause 333 be amended so that a party subject to one of these orders can apply to the District Court for a variation of the order if circumstances have changed in such a way that it will result in a different order being made by the court. It is a fairly minor amendment but it enables the courts to have flexibility to grant orders that are appropriate to particular circumstances. 
So Part 6 is about the special powers of the court in particular circumstances and it provides a reasonably straightforward way in which the court can deal with the kinds of issues I have outlined. Other than that I have nothing further to say on Part 6 because only one change needed to be addressed—the one I have just mentioned—and in all other respects the Justice and Electoral Committee was satisfied that Part 6 was well drafted and workable. 
The question was put that the amendments set out on Supplementary Order Paper 146 in the name of the Hon Clayton Cosgrove to Part 6 be agreed to. 
Amendments agreed to. 
Part 6 as amended agreed to. 
Part 7 Miscellaneous provisions 
CHRISTOPHER FINLAYSON (National) 
: 
 For the record I will make some brief comments on Part 7 which deals with miscellaneous provisions. The part that interests me is the second part of Part 7 which sets out certain repeals. It is worth referring for example to clauses 360 and 361 because they give the Committee an idea of the extent of the changes that are being introduced by this very important legislation. I ask members to go to clause 360(2) where they will see that some very ancient statutes indeed are headed for the scrap heap. We start with the 1267 Statute of Marlborough and move to the 1289-90 Quia Emptores statute the Partition Act 1539 the Partition Act 1540 and so on. Through the reign of William and Mary some statutes go; some statutes from Queen Anne’s time go; various statutes from George II—one of those Hanoverian kings—go; and then statutes from more recent Victorian times go. Indeed that famous statute the Fires Prevention (Metropolis) Act 1774 is affected by this legislation. 
All I am trying to emphasise is that as a result of the passage of this legislation certain imperial enactments relating to property are no longer to be considered part of the law of New Zealand. It will be very interesting after this legislation has been passed to undertake an assessment of just how many imperial enactments are left. I venture to suggest there will not be very many at all. 
So Part 7 is absolutely uncontroversial and it simply deals with a couple of miscellaneous rules. But for the record it is worth considering the far-reaching impact of clause 360 because as I said it deals with imperial enactments repeal. So some of those ancient statutes that were brought into New Zealand by virtue of the Imperial Laws Application Act 1988 shall upon the Governor-General’s assent being given have no longer any effect in this country. 
The question was put that the amendments set out on Supplementary Order Paper 146 in the name of the Hon Clayton Cosgrove to Part 7 be agreed to. 
Amendments agreed to. 
Part 7 as amended agreed to. 
Schedule 1 agreed to.  
Schedule 2 
The question was put that the amendments set out on Supplementary Order Paper 146 in the name of the Hon Clayton Cosgrove to schedule 2 be agreed to. 
Amendments agreed to. 
Schedule 2 as amended agreed to. 
Schedule 3 
The question was put that the amendments set out on Supplementary Order Paper 146 in the name of the Hon Clayton Cosgrove to schedule 3 be agreed to. 
Amendments agreed to. 
Schedule 3 as amended agreed to. 
Schedule 4 
The question was put that the amendments set out on Supplementary Order Paper 146 in the name of the Hon Clayton Cosgrove to schedule 4 be agreed to. 
Amendments agreed to. 
Schedule 4 as amended agreed to. 
Schedule 5 agreed to.  
Schedule 6 
The question was put that the amendments set out on Supplementary Order Paper 146 in the name of the Hon Clayton Cosgrove to schedule 6 be agreed to. 
Amendments agreed to. 
Schedule 6 as amended agreed to. 
Schedule 7 
The question was put that the amendments set out on Supplementary Order Paper 146 in the name of the Hon Clayton Cosgrove to schedule 7 be agreed to. 
Amendments agreed to. 
Schedule 7 as amended agreed to. 
Clauses 1 and 2 
CHRISTOPHER FINLAYSON (National) 
: 
 I am almost completely dumbfounded by the Committee stage of this bill tonight. This bill is the most important reform of property law for 55 years. It has been in gestation for many years indeed because as the Justice and Electoral Committee’s commentary on the bill states it builds on the work of the Law Commission over a lengthy period of time and more recently on the work of the Ministry of Justice. It deals with extremely important rules of law affecting most if not all New Zealanders at some time in their lives. Yet what we have seen is not one Government speaker prepared to stand up and say anything about any part of it. Nothing! They were all sitting there utterly mute. I am simply amazed that on such important legislation they could not get off their chuffs and make at least a brief contribution. 
Look at the subject matter we have been studying tonight and which National members have been addressing—mortgages powers of attorney deeds leases—all the sorts of things that we need to understand and that we come in contact with time and time again. I go back to the days when I used to sit up in the public gallery when I was a student. In those days of course there would have been a clause by clause analysis of the bill and we would have had the Geoffrey Palmers on their feet debating the clause by clause analysis—a rigid exegetical analysis of the legislation. Look at members opposite now sitting there in various states of putrefaction totally unable to make any contribution. I think they are so absorbed in intra-party hatred and fighting that they have no energy left to come down to the Chamber and discuss the Property Law Bill. 
I am very very disappointed because it is important legislation. It is not every day that the Parliament of this land looks at some of these arcane and important areas of law and we have had no contribution to the legislative process from Labour at all. I frankly am dumbfounded by the failure of the Government to engage in the debate. It is not as though we were working incredibly hard on this side because all we needed to do was have a part by part analysis. In the time available given the restrictions on debating bills by parts all we could do is take one or two subjects and then expand on that. 
Chris Auchinvole 
: But we were on the select committee. 
CHRISTOPHER FINLAYSON 
: We were on the committee we were interested and we were prepared to play a part—unlike the drones on the other side. I am very disappointed. Thus this legislation passes into law and one can say in all honesty that the Labour members in the Committee have contributed not one jot or tittle. 
Hon CLAYTON COSGROVE (Associate Minister of Justice) 
: 
 It would be a terrible evening if Mr Finlayson were disappointed. I will take a short call to respond to the load of political bile that emanated from that side of the Chamber. After working jointly in a non-partisan way with the Justice and Electoral Committee the reason that members of the Government have chosen to allow this bill to go forward is simply a little bit of common sense. 
We agree with the Property Law Bill. We do not need to hear hour upon hour of the sound of our own voices and our own legal knowledge of those of us on this side of the Chamber—not including myself—who are lawyers. We do not need to stand up and wax eloquently way back over the centuries of law. Put simply the taxpayers of New Zealand pay us to pass legislation. The Government agrees with this bill. The Government thanks the Opposition—at least those on the select committee—for the way in which they expedited this non-partisan legislation as facilitated by the Law Commission. 
It is a fact that the legislation makes radical change and improves our property laws. It is significant legislation as the learned Mr Finlayson said. Therefore in the view of the Government instead of puffing up our own egos taking speech after speech we agree with and support the legislation—as does the Opposition—and we feel we should pass the legislation as taxpayers charge us on our large salaries to do. 
Clause 1 agreed to. 
Clause 2 agreed to. 
Bill to be reported with amendment presently. 
House resumed. 
The Chairperson reported the International Finance Agreements Amendment Bill without amendment the Protection of Personal and Property Rights Amendment Bill with amendment and the Property Law Bill with amendment. 
Report adopted. 
Agricultural Compounds and Veterinary Medicines Amendment Bill 
Second Reading 
Hon ANNETTE KING (Minister for Food Safety) 
: 
 I move  
That the Agricultural Compounds and Veterinary Medicines Amendment Bill be now read a second time 
. Firstly I thank the Primary Production Committee for its consideration of the bill as well as those persons who provided submissions and representations to the committee. The committee’s consideration has resulted in a number of enhancements to the existing provisions of the bill. 
This bill provides for changes to the principal Act—the Agricultural Compounds and Veterinary Medicines Act 1997—to make it more effective and more administratively efficient. It includes improvements to the regulatory framework and clarifies certain provisions in order to achieve the original policy intent of the Act. The changes improve the workability of the Act for stakeholders. In particular these changes make provisions for a one-stop shop system for assessing and managing risks associated with the use of agricultural compounds. 
The bill also allows changes to be made to the organisational environment—that is it allows changes to the Government department responsible for the administration of the legislation—without the need for further specific change to the Act. This change will allow for the recognition from 1 July 2007 of the New Zealand Food Safety Authority as a separate public service department with responsibility for the administration of the Agricultural Compounds and Veterinary Medicines Act. 
The bill makes provision to close several gaps identified in the coverage of the Act in order to better manage the public health effects of agricultural compounds and the regulation of all parts of the supply chain. These provisions expand the purpose of the Act to include managing risks to public health and specify that the manufacture and import of agricultural compounds that do not comply with the Act are prohibited. They also provide for the ability to set requirements for the distribution storage and transportation of agricultural compounds. The bill clarifies the statutory backing for arrangements to restrict the supply sale or use of certain products such as prescription animal medicines and poisons such as cyanides to authorised persons and the process for transfer of registration between authorised persons. It also clarifies that pet foods and stock foods are covered by the Act. 
The bill will also make changes to improve the enforcement of the Act. It provides for alignment of the processes and powers relating to imports of agricultural compounds and veterinary medicine products with those of the Biosecurity Act. It enables the director-general to recall non-compliant product or suspend product registration and provides for a more appropriate and effective range of penalties for offences. 
The bill makes changes to improve the flexibility and administration of the Act by providing an alternative approval process in special circumstances for the import manufacture or use of agricultural compounds without registration. It allows for recognition of persons or agencies to carry out specified activities or functions for the purpose of the Act and provides for the issue of certificates of compliance to assist exporters. It also updates cost-recovery provisions in the Act. 
The bill removes or amends regulatory requirements that are in excess of those necessary to manage risks or where the required degree of control can be achieved by non-regulatory or administrative measures. The bill also makes some minor technical changes removes provisions that have become redundant following changes in the operating environment and updates terminology.  
Hon Tau Henare 
: Read the speech. 
Hon ANNETTE KING 
: The member opposite is interested in my speech. Somebody is awake to hear this very very good speech. I thank Mr Henare. 
I will continue telling members about this very good legislation. The Primary Production Committee made amendments to clauses 20 21 and 44 of the bill which relate to sections 28 and 75 of the Act in order to clarify the way in which the Act works in respect of the imposition of conditions on agricultural compounds the setting of standards required to effect those conditions and the notification of technical specifications detailing how standards can be met. These changes arose from concerns raised by the Legislation Advisory Committee to the New Zealand Food Safety Authority officials advising the select committee. The Legislation Advisory Committee was concerned that the Act was complex lacked clarity and conferred wide powers on the director-general. Further it was advised that the bill as introduced added to these difficulties rather than reduced them. To address this the select committee made changes to the bill to further clarify the relationship between codes standards and conditions on trade name products. The mechanisms for setting these requirements at the secondary and tertiary levels of the legislation have been made more straightforward and will be subject to increased levels of parliamentary scrutiny. 
I fully support the changes made by the select committee to the structure of the Act. The changes deliver on the policy objectives and the intent of the Act and the bill without stepping beyond the scope of the bill. The amended provisions will confirm the power to impose standards through regulation thus providing transparency in the standard-making process and ensuring parliamentary oversight via the Regulations Review Committee. To ensure that people can understand what is required to achieve standards set under the Act the director-general will have the power to issue notices that set out the technical detail of how compliance with a standard can be achieved. These changes prompted a further consequential change to the bill with the deletion of clause 55 which amended the Privacy Act. Clause 55 became redundant with the changes to the standard-setting and code of practice provisions. Additionally codes of practice will now be known as operating plans in order to convey more accurately the nature of these instruments and their place in the scheme of the Act. A definition of operating plan is added to the interpretation clause of the Act. 
The committee amended the bill by adding a section that broadly sets out the overall scheme of the Act in order to address the Legislation Advisory Committee’s concerns about the lack of clarity in this respect. The committee also amended clauses 15 and 21 by replacing the words “prescribing” with “authorising the use of” to address concerns raised by submitters about the potential for confusion in this area between the requirements imposed on veterinarians in respect of the standards for prescribing medicines under this Act and those under the Veterinarians Act. 
The committee also amended clause 23 which extends provisions for protection from compensation to cover the revocation or amendment of an approval under the new section 8C entitled “Director-General may approve agricultural compound as exempt in special circumstances”. The committee’s amendment clarifies that the provision covers court-awarded damages as well as compensation given by the New Zealand Food Safety Authority. 
Minor amendments to the bill made by the committee include the deletion of the reference to the Meat Act 1981 and the Dairy Industry Act 1952 as these Acts have been repealed since the bill was drafted and changes to the wording in new section 81E(1) of the Act to correct a drafting error. 
The Government supports all these amendments because they clarify the intent of the bill provide greater transparency for the stakeholders and improve the workability of the bill. Although access to and the use of agricultural compounds and veterinary medicine is vital to New Zealand’s pastoral horticultural and forestry sectors there are also risks if they are used inappropriately or unwisely—risks to human and animal health our biosecurity and our agricultural exports. The Agricultural Compounds and Veterinary Medicines Act is a key part of New Zealand’s regulatory framework for managing these risks. 
I thank once again the members of the Primary Production Committee for their work in considering this bill and I also acknowledge the helpful contribution of submitters. I commend the Agricultural Compounds and Veterinary Medicines Amendment Bill to the House. 
Hon DAVID CARTER (National) 
: 
 The National Party is of course delighted that finally the Government has brought the Agricultural Compounds and Veterinary Medicines Amendment Bill to the House for its second reading—nearly 4 months after the Primary Production Committee reported the bill back to the House. 
The question being asked tonight by the media is why the Government has suddenly brought this bill back to the House after it sat around for 4 months. I suspect that Annette King as Minister for Food Safety is in the same camp as Damien O’Connor is in as Minister of Corrections. I think she is for the chop as the Minister for Food Safety because this bill was an absolute mess when it came before the select committee. Annette King said euphemistically a few minutes ago in a well-written speech supplied by officials—which she had trouble reading correctly—that the select committee had made a few enhancements to the bill. The truth of the matter is that the select committee had to make substantial changes in order to tidy up the bill because that Minister had not done her homework and the bill was presented to the select committee in an absolute mess. 
But the good news is that the bill is now back before the House in substantially better shape than when we saw it at its first reading. We want to now see the Government move the bill quickly through the rest of its stages because there was general support from all the submissioners. They helped us tidy up the mess the Minister of Food Safety had made and they were generally supportive of the bill. I have been fielding calls from them for months asking when they could expect to see some progress on the bill. It was first introduced to the House late last year—I think it was 6 December. 
Hon Annette King 
: Then you went on holiday. 
Hon DAVID CARTER 
: No we were out campaigning. The Minister went on holiday and we called for submissions which closed in late February. We then did our work and it certainly took a lot of work because the Minister had presented such a mess to us. We brought it back to the House on 29 May and it sat there for 3½ months—and not much important legislation has been passed by the Labour Government over the past 3½ months—but finally the good news is that the Government has decided to progress the legislation. It is a lot tidier and I look forward— 
Hon Clayton Cosgrove 
: They’ve sent the C-team down tonight haven’t they? 
Hon DAVID CARTER 
: I think the Minister for Food Safety is the C-team. She is the one who is going to get the chop when Helen Clark does the reshuffle. Mr Clayton Cosgrove will get the corrections portfolio so he will get the chop in the next reshuffle. It is the C-team that is down here that is for sure. 
Hon Annette King 
: Can’t even make the front bench. 
Hon DAVID CARTER 
: I think her glasses need a clean but we thank the Minister for Food Safety for finally getting the legislation back to the House. I thank her for the kind words she said about the select committee tidying it up. We have been doing that for a while now—the Primary Production Committee is always tidying up the Labour Government’s mess. But the bill is now back and in good shape and National looks forward to the Government progressing it forthwith through all stages. 
Dr ASHRAF CHOUDHARY (Labour) 
: 
 I would like to thank the Primary Production Committee and indeed the chairperson of that select committee the Hon David Carter for his and his colleagues’ cooperation on the Agricultural Compounds and Veterinary Medicines Amendment Bill. This is a wonderful bill and all the work done in the select committee is appreciated. I must confess that this is one of the fantastic committees that I am a member of and I enjoy working with the committee members. We really worked for the nation. I take pride in the fact that this particular committee works as a team and works for the farmers and for the economy of this country. So to that extent I am delighted. 
New Zealand’s agriculture and forestry sector provides exports to a total value of $17 billion which is about 60 percent of our total merchandise exports and 45 percent of our foreign exchange earnings. So it is a big industry. All the pesticides and veterinary medicines that we use are very important for us and they have a huge input into our industries. We use about $400 million worth of pesticides in our agricultural industry and there is a huge variety of them. New Zealand uses about 1000 different pesticides and 2000 different veterinary medicines and compounds so it is very important that we have access to our veterinary medicines and that we use them in a wise and safe manner. 
This bill is really about managing the risks to animal and human health. So to that extent this is a very timely bill that makes sure that all the agricultural medicines and pesticides are used properly. This bill will ensure that the risks to trade that are associated with agricultural compounds and veterinary medicines are managed more efficiently. I do not have a lot to add to what the Minister has already said. Both sides of the House agree that this is a very good bill and I support and commend it to the House. 
ERIC ROY (National—Invercargill) 
: 
 I also commend to the House the Agricultural Compounds and Veterinary Medicines Amendment Bill. The Primary Production Committee has had its head around a number of issues in relation to a bill about a very complex matter. Essentially this bill seeks to allow the utilisation of a whole range of agricultural compounds but to maintain their integrity and the assurance that those products are safe and that there is no way they will impair denigrate or reduce the impression of the products we want to sell. That is quite a complex issue. 
This bill is called the Agricultural Compounds and Veterinary Medicines Amendment Bill and the first question that I think is of interest is: “What exactly is an agricultural compound?”. Agricultural compounds can be natural or synthetic and they can include medicines. They are fertilisers pesticides fungicides herbicides and insecticides and they can be synthetic organic or conventional. Over 500000 different compounds have been identified within foods in terms of nutrients and natural and artificial pesticides. So it is a very complex area. 
We are all aware that we have to enhance what we do. We need to apply remedies we need to improve fertility and we need to do a number of things to treat sickness. That is where the animal compounds come in. This is important because we have to keep finding new remedies and new compounds that will do the work for those people who are in the production sector. We can very easily say: “Well here is a level of protection—we just allow nothing in.” but that certainly would impair the ability of our primary production sector to compete in a world in which it is becoming increasingly more difficult to produce at a rate that is competitive product that has all the qualities the market demands. 
So we have a very complex thing called an agricultural compound that we need to be able to shift into New Zealand. We need to be able to give an assurance to the consumers who are buying the product. Agricultural compounds are controlled by a whole range of things: the Hazardous Substances and New Organisms Act the Environmental Risk Management Authority the Agricultural Compounds and Veterinary Medicines Act and Food Standards Australia New Zealand. There are a whole range of things covering this very very complex area. This bill wants to set some trails or some pathways so that when a product comes in there is an identified way of giving an assurance setting some requirements or refusing entry to a new product or a product that is being used. 
There is a lot of delegated authority in this bill. The question is whether there is another way to do it. Seemingly there is not. The director-general is given a whole range of powers with a set of quite stringent regulations as to how he or she makes determinations. It is quite important that someone has that responsibility and that it sits on one individual’s head. It does have some potential to increase compliance costs but in essence there does not seem to be any other way when we are dealing with such a complex area. 
I commend the bill to the House. We really need the bill to be passed to allow opportunities for the utilisation of a variety of agricultural compounds—not only those that are in use but also those that will be invented and those that are available in places other than New Zealand that we decide to have here. 
SUE KEDGLEY (Green) 
: 
 I rise to give the Green Party’s support to the Agricultural Compounds and Veterinary Medicines Amendment Bill. I missed the number the previous speaker gave of how many chemicals we have in existence. 
Dr Ashraf Choudhary 
: It is 1000 pesticides and 2000 other medicines. 
SUE KEDGLEY 
: We have 1000 pesticides and 2000 others. It is worth remembering perhaps as we consider this bill that human civilisation has existed for millennia for thousands of years without the use of any agricultural compounds or veterinary medicines. In fact it is only in the last 50-odd years that we have started to become reliant and dependent on agricultural chemicals and veterinary medicines. Of course we have a thriving organics industry around the world—and to a small extent here in New Zealand—and that industry manages without reliance on these agricultural compounds and veterinary medicines. That is worth remembering because the way the bill is set out implies—and indeed some previous speakers such as Mr Roy have suggested—that the agricultural sector would collapse if we did not have access to these thousands of pesticides and agricultural compounds. [ 
Interruption 
] I have just reminded Mr Roy—I think he may have been talking to someone else at the time—that we did manage for millennia without agricultural compounds and veterinary medicines and that we managed until the last 50 or 100 years. 
Nevertheless the Green Party would like to make a couple of points about this bill. One of them is to say thank heavens for the Regulations Review Committee. I think that the Regulations Review Committee is rather overlooked in this Parliament. I know that it toils hard and meets several times a week at some early hour of the morning. Thank heavens for that committee because it—along with the Legislation Advisory Committee—pointed out that powers and standards in the original bill would not be subject to any form of parliamentary scrutiny. There were a number of things that the Regulations Review Committee recommended needed to be changed and that is a concern. I have noticed that an increasing amount of legislation coming before this House gives through regulation extensive delegated powers that are not subject to any form of parliamentary scrutiny. This bill was yet another example of that. I express my gratitude to the Legislation Advisory Committee and in particular to the Regulations Review Committee for bringing this to the attention of the select committee—for pointing it out and for recommending changes that mean there is at least some degree a very small degree of parliamentary scrutiny by the Regulations Review Committee. That as we know is a reasonably limited scrutiny and does not involve debate in this House but at least it is something that was not there before. 
The other thing we are particularly pleased about is that finally we will require that we need to look at protecting public health and considering public health issues when we examine agricultural compounds and veterinary medicines. Previously there was no requirement even to consider the impact on public health of the numerous pesticides and agricultural compounds that were administered to animals in New Zealand. 
I am also absolutely delighted that finally in the commentary on this bill there is an acknowledgment that antibiotics when they are administered in feed to food-producing animals “pose a threat to human health”. I did not really believe that I would see the day when officials in New Zealand acknowledged that continuously feeding antibiotics to animals in New Zealand could produce adverse effects in humans. Every day for breakfast lunch and dinner we feed our chickens—and to a lesser extent our pigs—antibiotics basically to make them grow more quickly but also to reduce the widespread risk of disease. Until now officials have been in denial that this could produce adverse effects in humans. Microbiologists have warned that continuously feeding antibiotics to animals—in particular antibiotics that are administered to humans as the commentary points out—will inevitably result in the spread of antibiotic resistance. 
Microbiologists warn that antibiotic resistance will be one of the major threats posed to humanity in the 21st century and we are already starting to see that. Some countries such as Sweden have prohibited the continuous feeding of antibiotics to animals. Other countries in Europe are saying that if an antibiotic is used in human medicine it should not be permitted to be fed continuously to animals in their feed. We have not even got a restriction much less a prohibition on feeding to animals the antibiotics used in humans. So at least it is good to see that there is an acknowledgment that these antibiotics could pose a threat to human health and that we should in the future require that these and other medicines undergo human health and environmental scrutiny and assessment for residues and resistance. 
This really is a big step forward; we are moving from a state of denial of these risks to a state of acknowledgment. Hopefully we will eventually catch up with the rest of the world and we will prohibit the feeding of antibiotics that are used in human medicine to animals we will prohibit the continuous feeding of antibiotics to animals like chickens we will acknowledge the huge threat that the spread of antibiotic resistance poses to humans and we will acknowledge what is being discovered in Europe for example and in America and Canada—the spread of the multiple-resistant methicillin-resistant  
Staphylococcus aureus 
 in animals. Arguably we have exactly the same problem here in New Zealand but of course nobody is actually testing our animals to see whether they may be contaminated with antibiotic-resistant bacteria as they are overseas and what the implications of that might be for human health. When methicillin-resistant  
Staphylococcus aureus 
 spreads we get vancomycin-resistant  
Staphylococcus aureus 
; and eventually antibiotics the modern miracle of human medicine will become ineffective and we will find ourselves without those drugs to combat human diseases because we have indiscriminately fed them to animals resulting in widespread antibiotic resistance in humans. 
The bill also acknowledges that other veterinary medicines used on whole herds of animals such as anti-parasite dips and drenches pose significant risks to human health and the environment. It is good to know that we are finally acknowledging this. There are other examples of substances such as genetically-engineered commodities that have also been fed to animals until recently—until now probably with the passage of this legislation. There has been no requirement to assess the potential impact of genetically-engineered commodities fed to animals and whether they may have some impact on human health through residues etc. Now as a result of this bill there will at least be a requirement—we hope—to assess the risks to human health and of course to the environment. When we are looking at dips and drenches the effect on the environment is significant so the Greens are pleased that this bill is finally acknowledging the potential impact on human health and the environment. 
We are a bit worried about some of the fast-tracking provisions of this bill. We are pleased that the regulations review has removed some of its worst aspects—its most undemocratic aspects—that would have allowed entire standards to be fast-tracked without any form of parliamentary scrutiny. Therefore we will be supporting the bill and we hope that finally New Zealand will start to catch up with countries such as those in Europe in acknowledging that we need far greater scrutiny of some of the agricultural compounds and veterinary medicines we feed to animals and consideration of the impact that these will inevitably have on our health and well-being. 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Tena koe Mr Deputy Speaker. The Maori Party will be supporting the Agricultural Compounds and Veterinary Medicines Amendment Bill. It is an interesting coincidence that this bill is being discussed on the day the Law Commission Te Aka Matua o Te Ture released its issues paper entitled  
Presentation of New Zealand Statute Law 
. The paper begins with the premise that New Zealand’s statute law falls well short of a basic standard that the law must be accessible to the public. The paper states: “ …our statute law as a whole lacks coherence is untidy and unwieldy and is difficult to find understand and use.” That is hardly a great advertisement for Acts of Parliament. 
In this setting then the recommendation from the Primary Production Committee to include a new provision to clarify the purpose of the Agricultural Compounds and Veterinary Medicines Amendment Bill in order to “address any concerns regarding obscurity” is greatly welcomed. The Primary Production Committee recommends the insertion of a new clause 5A to make explicit the scheme of the Act how the Act works and its relationship to other Acts. 
I want to make a point of this recommendation because statements of purpose are extremely important in assisting citizens in knowing and understanding how the law affects them. In the case of this bill the understanding that no agricultural compound may be used in New Zealand unless its use is authorised by or under this Act is a vital step towards clarifying the original policy intent of the bill. 
Another key change introduced by the Primary Production Committee is the proposal to make explicit the relationship of this bill to other Acts—variously listed as the Animal Products Act the Food Act the Wine Act the Animal Welfare Act the Biosecurity Act the Medicines Act and the Hazardous Substances and New Organisms Act. Again this is a welcome innovation which the Law Commission also has something to say about. 
The commission promoted the practice of looking to historical Acts to interpret modern provisions in order to provide the broader context for understanding. Its report released today describes the impressive process carried out in the case of  
Ngati Apa 
 v  
Attorney-General 
 in 2003 in which the court considered 37 Acts in deciding the issue of whether any historical legislation had extinguished any Maori customary property in the seabed and foreshore. That case the House will recall confirmed—following the expert interpretation of the precedent set by these 37 Acts—the possibility of territorial claims by Maori groups to the foreshore and seabed. It was a decision that again the House will recall has led to perhaps the most significant legislative debate that thinking New Zealanders would consider has taken place in decades. 
As history has shown the current Government chose to wilfully discard the expert interpretation of the statute in the case of the Foreshore and Seabed Act and instead ran roughshod into a process that squashed any opportunity for Maori or the courts to be able to benefit from due access to justice. We hope therefore that in the case of this Agricultural Compounds and Veterinary Medicines Amendment Bill the wisdom and precedent established by the broader context of its relationship to other Acts will have meaning and will serve to improve the regulatory framework. 
The Agricultural Compounds and Veterinary Medicines Amendment Bill amends the 1997 Act to include provisions to protect public health from the adverse effects of agricultural compounds. We in the Maori Party are pleased to support any amendments to regulate and assess the contamination of food for the benefit of public health. We note in particular the support of the New Zealand Veterinary Association to include the management of risks to humans in the revision of the original Act. 
Although the management of risks is meant to be covered by the Hazardous Substances and New Organisms Act the Act is not sufficient to the task. It excludes some of the key risks from veterinary medicines including antibiotic resistance in humans arising from their use in humans; infectious agents such as live vaccines; needle-prick injuries; drugs of habituation dependency and abuse; and illegal use of performance-enhancing drugs such as steroids. In including the management of human risks the revised Act will therefore offer an opportunity for a one-stop shop to regulate veterinary medicines. 
As the Law Commission made clear the linkages between Acts of Parliament are a vital means of enhancing the quality and meaning of legislation. I also want to make clear the importance of the link between the revised Act and the Hazardous Substances and New Organisms Act in relation to the risk of contamination. Let me mention something of great interest to Maori: pig hunting. The nation saw this at first hand with our own Corporal Bill Henry Apiata who was awarded the Victoria Cross for bravery in Afghanistan. He said publicly that rather than being honoured at all the celebratory events he would have preferred to be pig hunting. 
What do kai moana hunting shooting and fishing have to do with the Agricultural Compounds and Veterinary Medicines Amendment Bill? A 2005 report  
Wild Food Contamination 
 describes anecdotal evidence that hunters sometimes leave skinned carcases of poisoned possums that wild pigs can consume. The report highlights the need for a better understanding of the status of wild food and its consumption in New Zealand in order to determine whether there is a risk to public health and if there is how it might be reduced. 
We know there is a risk of secondary poisoning when say weka or pigs eat possum carcasses and humans then go and eat those same pigs. Therefore the potential of contamination and poisoning of wild animals of shellfish and of watercress has relevance both to this bill and to the Hazardous Substances and New Organisms Act. We believe that this issue merits greater consideration by the House. 
Finally I think it is also important to note that it is not enough to regulate and risk manage toxicity levels and to improve the regulatory framework; we also need to consider opportunities to make progress towards an organic and GE-free Aotearoa. The Maori Party believes that all people have a fundamental right to clean air land water and food. Such a commitment means we must work on all fronts to be protected from the production release and disposal of toxic and hazardous waste. A necessary component of such a pathway would be to look at ways to reduce reliance on pesticides and fertilisers. 
We will support this bill as it is in keeping with our responsibility towards upholding kaitiakitanga whakapapa and whanaungatanga. This is a commitment we make to ensure we use the resources of the Earth in a way that preserves the planet and the peoples for current and future generations. Thank you Mr Deputy Speaker. 
MARTIN GALLAGHER (Labour—Hamilton West) 
: 
 Mr Deputy Speaker—[ 
Interruption 
] Is it not distressing Mr Deputy Speaker that members opposite would denigrate the importance of the Agricultural Compounds and Veterinary Medicines Amendment Bill by indulging in cheap shots across this House? 
Previous speakers have praised the chair of the Primary Production Committee for his role and the Minister has praised all members of the committee for their contribution to this bill. I have to say that I was disappointed that the Hon David Carter who is actually a very fine person rose not as the chair of a select committee of the Parliament of New Zealand selected and elected by this House but as a partisan speaker from Canterbury. I think that is a big shame because David Carter is a fine person. I personally think he seems to have been a good chair of the Primary Production Committee. This House under MMP now has select committee chairs from a range of parties and they are servants of the select committees. When they report back to the House a major component of their speech in my view should focus on representing the cross-section of the views of their select committee. I think it is quite sad that one or two chairs of select committees have not adapted to that role. 
Having said that I will be gracious—I will show the graciousness that perhaps was not evident in David Carter’s presentation—and compliment all members of the select committee on the excellent work they did. I also think it is appropriate that we acknowledge the excellent contribution of the advisers and the officials and their work in helping the Minister and members of the select committee. 
I represent one of the major agricultural regions of New Zealand—the Waikato obviously. It is a privilege to have in my city AgResearch a major institution. We can boast that anything up to 25 percent of the nation’s scientists are in Hamilton. People who are involved in animal production and pasture management obviously have a key interest in and have made a key contribution to this very important legislation. I thought that this bill was non-partisan legislation and I thought members of this House could rise above the notion of partisan point-scoring. I would say to members opposite that they do themselves no credit—not all of them; just one or two—by trying to turn this bill into some sort of means of partisan point-scoring. Frankly rather than indulging in partisan point-scoring let us focus on the intent of this bill. Indeed this bill is a very important bill. 
I compliment Sue Kedgley on some of the important points she made and I compliment Dr Pita Sharples as well. I think this has been a very constructive assessment and debate with the exception—sadly in my view—of one or two comments made by the chair of the select committee. I notice of course the Minister’s key points. She said that although access to and use of agricultural compounds and veterinary medicines is extremely vital to New Zealand’s pastoral horticultural and forestry sectors there are risks if they are used inappropriately or unwisely. If they are used inappropriately—and I know that the member for Hamilton East is listening to this—or unwisely they then pose huge risks to human and animal health to our biosecurity and to our agricultural exports. This bill is indeed a key part of New Zealand’s regulatory framework for managing those risks. I know that the member for Hamilton East joins me in acknowledging the huge importance of this bill. I know that member joins with me in praising the Minister for her contribution and I know that member who represents the city of Hamilton also praises the select committee for what I think is excellent work. 
I will finish my brief contribution tonight. I praise the chair of the select committee and praise the select committee for its good work but I would particularly praise the very excellent hard-working Minister who continues to make a wonderful contribution to the Government to the country and to this Parliament. Thank you Mr Deputy Speaker. 
NATHAN GUY (National) 
: 
 I rise to take a call on the Agricultural Compounds and Veterinary Medicines Amendment Bill and I say thank goodness the bill went through the Primary Production Committee so that we could tidy it up. It came through in December of last year. On 6 December 2006 the bill had its first reading. It was reported back to Parliament at the end of May this year. It has languished on the Order Paper for about 3½ or 4 months now and finally it is in front of us. We had six submissions on the bill and we heard four of them. 
In general the bill is a one-stop shop intended to tidy up the legislation and we support it. We actually had to do quite a bit of work on the bill in order to get it into a tidy state. I do not need to respond to Mr Roy’s good contribution and to the Hon David Carter’s speech this evening because I think they have covered a good deal of what is in the bill. I guess we will get into the intricacies of that in the Committee stage. 
I think it is worthwhile at the moment to just touch on rural affairs which this bill is focused on. Damien O’Conner has been left in limbo by the Prime Minister so right now people in the Beehive will be running around with bits of paper doing the backslapping saying: “I am in your camp. I am supporting you.” and doing a trade-off here and a trade-off there. When we think about it we realise that all the cockies who may be listening to this debate now—having a cup of coffee and a bit of cake before they head off to get a good night’s sleep before calving and lambing commences in the morning—will be wondering who in Labour will potentially fill the gap on rural affairs. If we think about it we wonder whom Labour has. If Mr O’Conner loses all his portfolios—corrections tourism and rural affairs—then whom does Labour have? Labour members are not going to text Jim Sutton and ask him to come back are they? 
Hon David Carter 
: Well they might. 
NATHAN GUY 
: Does the member think they might? 
Labour members will be busy sending out texts to rural New Zealanders asking them to come on board and join the Labour Party because it has a real shortage of rural people in its caucus. There would be a deathly silence in response to that I am sure because rural New Zealand is pretty sceptical about Labour. So we will watch with interest to see whom it can pull in for the 2008 election to support rural New Zealand because we do not see that happening right now. 
The National Party supports this bill. We had to do a bit of work in the select committee in order to get it tidy. In essence we are really supportive of the 3-yearly review on cost recovery which I think is important. We have some concerns about the duplication particularly on costs that may occur. We will just have to watch that issue as it runs. So we are supporting this bill tonight and I wish to thank the select committee for the good work that it had to do to get the bill to where it is now. 
Bill read a second time. 
Arbitration Amendment Bill 
Third Reading 
Hon CLAYTON COSGROVE (Associate Minister of Justice) 
: 
 I move  
That the Arbitration Amendment Bill be now read a third time 
. Arbitration and mediation are the two main forms of alternative dispute resolution. Alternative dispute resolution is a growing trend in New Zealand with arbitration becoming increasingly popular for contract-based relationships. Arbitration is a more formal method of dispute resolution than mediation with the parties still having a significant amount of control over the proceedings. Although the result in arbitration is a binding decision the parties can agree to structure the arbitration in a manner that suits their individual needs. That flexibility proves to be attractive when a dispute arises as many parties are involved in ongoing relationships. Arbitration allows for a less adversarial approach to a dispute when compared with litigation leading to less chance that the relationship between the parties will break down in the future. Due to the increasing popularity of arbitration it is timely that the Government is improving the Arbitration Act. 
This bill makes a number of relatively small changes to the Arbitration Act to improve its operation and to keep it in line with international best practice. The bill is the result of a review of the Arbitration Act by the Law Commission. The Law Commission concluded that although the Act was working well a number of minor changes could be made to improve the Act’s operation. I would like to extend my thanks to the Law Commission for its work. 
The Arbitration Act of 1996 replaced an outmoded 1908 Act which had been inherited from England. The 1996 Act which was based on an earlier Law Commission report saw a whole new approach to arbitration introduced to New Zealand. The review by the Law Commission was therefore essential to ensure that the Act was working well for all those who were involved in arbitration. It is pleasing to see that the Act has proven to be a well-used and workable framework with very few tune ups needed. 
As I mentioned in my speech during the second reading of this bill the timing of the bill has also provided an opportune time to ensure that the Act keeps pace with international best practice. One of the purposes of adopting the current Act in 1996 was to create consistency with laws in other jurisdictions. It was for that reason that New Zealand adopted the United Nations model law on international commercial arbitration. Recently changes were made to the model law to reflect international best practice. Those changes have been incorporated into this bill and New Zealand will be one of the first countries to update its legislation to reflect the changes. The amendments in the bill that reflect the changes to the model law will give arbitrators more power to ensure that arbitral proceedings are worthwhile. Assets will be able to be preserved ensuring that a successful party will be able to recover an effective remedy. Evidence will also be able to be preserved ensuring a fair process for all. Those new powers will help to further enhance the attractiveness of arbitration. 
The bill makes some important technical changes to the legislative framework within which arbitration takes place. The fact that only relatively technical amendments were identified by the Law Commission is a reflection on the success of the 1996 Act. 
Again I thank the Law Commission for its expert review of the Act. I also take the opportunity in a non-partisan way to thank the Justice and Electoral Committee for its careful and thoughtful deliberation on the bill and to thank the officials for their advice. I thank the House for the positive and cooperative approach taken to this legislation. I commend the bill to the House. 
CHRISTOPHER FINLAYSON (National) 
: 
 National supports the third reading of the Arbitration Amendment Bill. I join with the Associate Minister of Justice in thanking the Law Commission for the good work it has done. 
The Minister is quite right when he says that the Arbitration Act 1996 has worked pretty well and that all that is required here are some minor technical amendments. It was very fortuitous that at the time the Justice and Electoral Committee was dealing with this legislation an opportunity was afforded to make a couple of amendments to deal with the issue of interim measures. What happens is that arbitration to a large extent is guided and governed by the United Nations Commission of International Trade Law which is known as UNCITRAL. It just so happened that the United Nations Commission of International Trade Law which meets twice a year—once in New York and once in Vienna—had been looking at the issue of interim measures. The New Zealand delegates could report back to the Ministry of Justice that some changes to these provisions were required and then the changes could be made very quickly. 
What the measures do is set out detailed provisions for the making of interim measures including the appropriate test for the tribunal to use regarding the need for interim measures and provisions for the making of preliminary orders. As a result of those amendments which the select committee worked on New Zealand has probably one of the most up-to-date arbitration laws in the world. Indeed I think it is possible that New Zealand is the first country in the world to adopt the new chapter on interim measures and I am very pleased that the select committee was able to do this. 
I particularly pay tribute to the three New Zealand delegates who have on a pro bono basis provided such a good service to New Zealand over the years at meetings of the United Nations Commission of International Trade Law. I am referring to David Williams of Auckland who is a very distinguished Queen’s Counsel and arbitrator. I refer also to James Hosking and Jennifer Lake both of whom are New Zealanders and are now resident in New York. James Hosking was a lawyer in New Zealand and is now a partner with Clifford Chance in New York. Jennifer Lake is well known to some of us. She was formerly a Crown counsel in the Crown Law Office and for a time did important work at the Iran - United States Claims Tribunal. 
Over the past few years New Zealand has had good service from these people. Indeed they advised the Ministry of Economic Development and the Ministry of Justice that they would be willing to continue to represent New Zealand on a completely pro bono basis so it is very disappointing to learn today that the request was refused on the basis that not only are there no funds to cover their expenses but also there is no time to undertake the pre - working-group meeting briefings and post-meeting reporting. The ministry says it has greater priorities for its time and resources elsewhere. If ever there was a situation where the ministry was looking a gift horse in the mouth it is this situation. These people have been providing excellent service to New Zealand as a result of which our arbitration law is state of the art and right up to date especially on the important question of interim measures. What we have from the Ministry of Justice is an unbelievably stupid response telling them that it does not have any need for their resources—even on a pro bono basis. I think that as a result it is entirely possible that our arbitration law will slip out of date again. 
My thanks to those people for what they have done. I certainly hope the Minister will look at this issue because it is an important one. But that having been said National will support the third reading of this legislation. 
Hon GEORGINA TE HEUHEU (National) 
: 
 I am pleased to rise to make a contribution to the third reading of the Arbitration Amendment Bill. It implements the principal recommendations of the New Zealand Law Commission contained in a report in 2003 which proposed changes to improve the Arbitration Act 1996. 
As my colleague Chris Finlayson said the Act—which has been in operation now since 1996—has worked reasonably well but some changes will be needed in the future and some are needed now. The changes in the bill are designed to make it more desirable and easier for parties to disputes to resolve those disputes privately by the use of arbitration. That is a worthy objective. National supports the third reading of the bill and congratulates the Government on bringing these amendments forward; they are timely. As I say the amendments have been proposed since 2003. 
Arbitration is only one way of resolving disputes. Other methods in an ordered civil society like ours include conciliation mediation and finally resolution in the courts. Although mediation has shades of arbitration—a neutral intervener facilitates the resolution—the end result is not necessarily a final binding outcome. Conciliation also has limitations that arbitration does not have. Of course we could say a whole lot of things about the court process but in this day and age our court processes are not working as well as they should and of course they have not improved under the current Labour Government at all. 
The beauty of arbitration is that it is consensual. Parties come to it freely of their own accord. They can determine the rules under which they wish to have the dispute resolved and can appoint a neutral arbitrator to adjudicate the dispute—there is agreement on that—and importantly for the parties they can accept the ruling of the arbitrator as binding. The process is somewhat regulated by the legal system in that there are limited rights of appeal to the court and interlocutory orders can be made during the process but its strength is that it is a method of resolution outside the normal legal system. 
It is not surprising then that more and more parties are referring their disputes to arbitration rather than to court proceedings. As I said earlier our court system is not working at optimum levels. In fact in some parts of the system it is clogged up; it is absolutely clogged up. It does not serve our community well at all and there is a perception—wrong I might say—that in court proceedings only the lawyers win. That is an increasingly popular view and it does not enhance the use of court proceedings. Resolution through the courts is becoming in a way the last resort. Mr Deputy Speaker you know that very well having been involved as a Minister in the justice sector as well. 
Colleagues have detailed the main changes promoted by the bill. I refer to only one in concluding my contribution on the issue of confidentiality. The underlying principle of our court system—that proceedings are conducted in public—flows from the maxim that not only must justice be done it must be seen to be done. For that reason court proceedings with only limited exceptions are held in open court. Increasingly however there has been a growing recognition that a range of disputes particularly in the business and commercial sector are more appropriately dealt with in the private domain. It is a strength of the arbitration system as well that the process quite properly allows for that. Indeed the changes in this bill ensure that total confidentiality of arbitral proceedings with a few well-defined exceptions is confirmed. The openness of justice principle is preserved as well; if the parties have recourse to the ordinary court system then open justice applies unless there is good reason that persuades the judge otherwise or unless there is agreement by the parties. 
All in all I commend the Minister in charge whoever it is; with all the changes that go on on the Government benches we are left wondering sometimes— 
Hon Clayton Cosgrove 
: Me! 
Hon GEORGINA TE HEUHEU 
: It is Minister Cosgrove. This is a good bill National supports it and we are very pleased that this bill will pass into law reasonably soon. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 New Zealand First will support this bill. 
Hon Tau Henare 
: Are you going to talk about the merchant navy? 
PETER BROWN 
: I think the member over there wants to test somebody’s arbitration skills the way he is continuing. 
New Zealand First will support the Arbitration Amendment Bill. It is a bill that addresses the Arbitration Act 1996 which we have been told by members on both sides of the House is working very very well. The bill applies just a few technical amendments to the Act. Arbitration is preferable to litigation for a number of reasons—[ 
Interruption 
]—despite the member opposite. It is preferable because basically it is cheaper and more effective. 
Arbitration is more effective because it tends to bring warring parties together whilst litigation tends to divide parties and sometimes with much acrimony. The Hon Tau Henare is testament to that. He knows how to divide parties with a lot of acrimony. He is a specialist at dividing parties with acrimony and the day will come when he does that to the National Party. 
New Zealand First was not on the Justice and Electoral Committee. We note some rather unusual comments in the commentary and it is appropriate that I put them on the  
Hansard 
 record. It states at one point: “We discussed the possibility of extending the Arbitration Act to cover employment arbitration.” Everybody knows including the Labour members that the Employment Relations Act was set up and specifically ring-fenced to address employment issues. I was quite amazed that the Labour members on the select committee did not recognise that and that they did not make a point of it. In fact the commentary goes on to state: “We believe that this proposal merits further consideration and encourage the Government to investigate the possibility of enabling the Arbitration Act to apply to employment arbitration in the future.” As far as I am aware the Employment Relations Act is working pretty well in terms of mediation and arbitration. I can fully understand members opposite wanting to bring the Employment Relations Act under this legislation but why would Labour want to do that? Maybe that is a question that somebody will answer in the future. 
Meanwhile New Zealand First supports this bill which contains only technical amendments. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 I have spent a considerable amount of time this evening on preparing my speech knowing full well that the Arbitration Amendment Bill is an important issue for this Parliament. Given the very short period of time left and the work I have put into this speech I seek leave from the House to suspend the commencement of my speech for just a little bit longer to allow us to really benefit from my words—if that is appropriate. 
Mr DEPUTY SPEAKER 
: I am sorry to interrupt the member but the time has come for me to leave the Chair. 
Debate interrupted. 
The House adjourned at 10 p.m.