Volume 609 Week 29 - Tuesday 1 July 2003(continued on Friday 4 July 2003) 
Volume 609 Week 29 - Tuesday 1 July 2003(continued on Friday 4 July 2003) 
[Volume:609;Page:7073] 
Tuesday 1 July 2003 
( 
continued on Friday 4 July 2003 
) 
Biosecurity Amendment Bill 
Third Reading 
Debate resumed. 
PHIL HEATLEY (NZ National—Whangarei) 
: 
 I would like to bring to the House’s attention a matter that was not discussed in the Committee stage or during the first and second reading debates and that is the issue of inspectors and their requirement to inspect and withhold risk goods or what are perceived to be risk goods for a period of time. At the Primary Production Committee some of the submitters requested that we put a time limit on that. Members can appreciate that those people import goods that are useful to them as they go about their tasks. It was vets who had the greatest concerns. They import goods from overseas and have in storage things like animal vaccines and other veterinary products which of course have only a limited lifespan. 
Members will recall that in the Hazardous Substances and New Organisms Act there are time limits whereby officials or customs officials at the gate can hold back goods before they are passed on. We had two options here which we looked at intensely. One option was to amend the Biosecurity Act so as to have time frames specific to the goods involved. The problem there is that on reading through the bill we can see it is a particularly generic bill. That option does not fit when we have specific clauses relating to specific products that relate to specific sector groups. So we set aside that option. 
Option 2 was to amend the bill so as to have time frames encompassing all goods right across the board in a generic manner. The problem there is that there is a large number of products all with specific requirements storage times and so on so making generic changes would be far-reaching all-encompassing and of course very very costly. Too many stakeholders would have been involved at the late stage of hearing the submissions on the bill and they would have needed to be consulted so we could not use that option. Therefore we have taken the middle ground which members will see whereby there will be consultation throughout the country and when we review the way that the legislation is working perhaps we can take that matter into account. 
I commend the bill to the House. The National Party will vote for it and I thank members for the opportunity to contribute this morning. 
JILL PETTIS (NZ Labour—Whanganui) 
: 
 I am pleased to support this bill. It is a good bill. Let us complete its third reading as quickly as possible. 
GERRARD ECKHOFF (ACT NZ) 
: 
 During the Committee stage of this bill there appeared to be considerable debate as to what Part 2 was all about. A lot of questions were asked of the Minister in the chair Mr David Cunliffe. He was asked whether he would take a call and explain what Part 2 was all about but that did not eventuate. So I am happy to tell the House that Part 2 is about the removal of compensation for the destruction of trees in a forest or indeed in a private setting. It is not a huge issue but it does show that some members of this Government have not even bothered to read the bill and understand what it is all about. 
This bill by and large is a sensible bill. It does ensure that the issues of biosecurity are once again placed at the forefront of public attention. It has been with some regret as has been mentioned numerous times in this House by the Opposition that the bill has languished for 2 years waiting for the light of day. At this very late stage we are at last under urgency debating this bill in its final stage—the third reading. 
One would assume that New Zealand and the Government would understand that every measure that is possible reasonable and logical for the Government to take it should indeed take. I want to hark back to my earlier comments about gamma irradiation. That technology has been around for a long long time. The question that must be asked again of the Minister and of the Government is why they studiously ignore that marvellous advance that relatively new technology when so many other countries use it. It is interesting to note that the United States of America uses gamma irradiation to destroy the anthrax bacteria in mail. I think everybody in this country and throughout the world is well aware of the anthrax scares. They have been a huge biosecurity risk to the public throughout the world and indeed a number of people have died from inhaling that product sent by terrorists. 
Here was an opportunity for the Government to recognise that those exceptional circumstances provide a great opportunity to scan all incoming mail and to use gamma irradiation to sterilise and kill the bacteria. The real question for me is this: why has the Government not accepted that gamma irradiation is such an important part of biosecurity in many parts of the world and that we could use it in New Zealand as well? 
The other aspect I would like to touch on again in this third reading debate is the fact that the rest of the world seems to be a step ahead of New Zealand on the question of biosecurity. I refer again to the Australians’ desire to achieve the maximum benefits they can and to ensure their own country remains free of unwanted organisms. I refer of course to the technique of bubbling nitrogen through ships’ ballast. We have been told in New Zealand that we cannot export water. We have major problems with the introduction of starfish and so on by means of the discharge of waters originating from exotic climes and that is the reason given that we cannot export a product that is in huge demand throughout the world—fresh water. If ballast was unloaded in Fiordland those organisms would get into the rather exotic and beautiful area on that part of our coastline and cause some real problems. 
The new technology that I have just come across is not even being discussed in New Zealand. I ask the Government why that is not the case. Why are all options not being put on the table so that the public can look at them and say that that particular technology is a perfectly reasonable way to go? If that technology was trialled in New Zealand and shown to work why should we not utilise it? Why do we not offer the country the very best opportunities in terms of biosecurity techniques? Sadly that will not happen—certainly not in the short term—under this bill. 
The bill of course also ensures that the public of New Zealand are made responsible for reporting to the appropriate authorities any incursions of unwanted organisms that they come across. The question of genetically modified (GM) organisms coming into this country illegally is one that does concern legitimately I guess a number of people not the least of whom are the Green Party members. It is quite interesting to note that just in recent days the European Union has opened up its doors to GM products as long as they are appropriately labelled so that consumers can have a choice. That seems to me to be a perfectly sensible even though quite costly alternative. It is also interesting to note that the introduction of GM products into the United States has lowered the necessity for pesticides to be used in that country by 20000 tonnes. 
 When we think about the Hazardous Substances and New Organisms (Stockholm Convention) Amendment Bill that we also passed recently in this House we know that here we have a marvellous opportunity to embrace new technologies and in so doing to do away with those extraordinarily hazardous substances. When we think about the reduction of 20000 tonnes in pesticide use in one country alone because of new technologies and new techniques then I think we have real cause for celebration that in this country and throughout the world we have a bright future thanks to science and the new technologies. 
I mentioned earlier that it is incumbent upon the people of this country to report any new outbreaks of unwanted organisms and I commend to the House again the television programme  
Border Patrol 
 which has highlighted the significance to New Zealand of people bringing in fruit—some inadvertently but others quite stupidly and without forethought. About 13 tonnes of fruit product have been detected. So the real question is how much comes into the country undetected. That is a major concern and I think that the producers of that programme  
Border Patrol 
 should be commended for introducing it in prime time. It is a hugely educational programme as well as being slightly entertaining at the same time. I would like to see opportunities being used to educate the public constantly—through advertisements for example—about organisms like moths for instance so that people can identify them and ring the authorities about an outbreak. Who knows? People may be able to win a trip to Fiji as a result of their stewardship of this country. We need to be innovative and creative about those sorts of things. 
Hon MARK BURTON (Minister of Defence) 
: 
 Not all parties support their bills but this is our bill it is a good bill and I am really pleased to support its third reading. 
BRENT CATCHPOLE (NZ First) 
: 
 I rise on behalf of New Zealand First to support this bill because it hits right at the very heart of one of the most important parts of our economy. Biosecurity problems can have a devastating effect on our economy particularly on our farming economy and our forestry. We agree that this bill has gone a long way towards closing some of the loopholes in the original bill. We also accept that it does not go quite far enough but we are happy that the bill will solve many of the problems. 
I bring to the notice of the Government that the bill was first introduced in August 2001. That is an awfully long time to have it sitting on the Table waiting to be processed through this House. The Government has finally brought the bill in urgency to this House to try to rush it through. Why was it not brought to the House a lot earlier? Why was the process not completed? The select committee completed its tasks well over 12 months ago and the bill could have come to the House immediately after that. But no it sat there waiting in much the same way that the Government waited for reports on various aspects of biosecurity management. Those reports told us exactly what we already knew—that the management of biosecurity in this country had failed miserably. We have seen a whole swag of incursions over the last 2 or 3 years and last night examples of a number of them were read out: cane toads huntsman spiders fire ants and crazy ants. The spread of all of those organisms could have been prevented had we had better checks in place earlier. [ 
Interruption 
] Government members are now trying to interrupt me but last night we tried to get the Minister to explain some of the issues in this bill and he would not take a call. He was told not to stand up and take a call. The bill sat on the Table for 2 years without anything happening to it and it has now come to the House. We are pleased that it is here because we are concerned about biosecurity issues as they affect our economy. 
I would like to touch on a few points in the bill particularly new section 44 inserted by clause 6 which requires people to notify the Ministry of the discovery of new organisms in their environment. We have only one issue with this provision. The general public are not aware of many of the natural organisms in this country so when they discover one that they think from the outside might be an introduced pest but turns out to be one that is natural after a while they will start to wonder whether there is any point in reporting those organisms because they are told every time they report one that it is one of our own natural ones anyway. To make this part of the bill work there needs to be an extensive educational programme that identifies the organisms we have and makes the public aware of them. As Gerry Eckhoff mentioned it could be a television series and we could bring in Dr Bellamy—our “David Attenborough”—to front it. We should be able to have a programme that identifies those organisms so that the general public and children in schools are taught the facts about the insects and spiders we have. We do not have cane toads but we could have another series to show the dangerous organisms from the countries of our trading partners. A database of the dangerous organisms that are likely to come in from our trading partners should also be set up. If that database were clearly identified there would be no delay in putting those organisms on a list so that something could be done. 
The management strategies in the bill are ones that regions are expected to put in place. We would like to make sure that regions work together so that there are not differing regional plans and strategies. If those plans and strategies are not coordinated we will have one organism skipping into the next region and nothing will happen. 
Another issue I would like to touch on is the aerial spraying mentioned in clause18 of the bill which updates section 114A of the principal Act. The notification requirement for aerial spraying has been 14 days and there is now provision to reduce that to 24 hours in certain circumstances which are invoked after a report has been done on the incursion. In very rare circumstances where the population is minimal there is even provision for zero notification before a spray takes place. I think that provision should be tightened up. It certainly needs to specify a period of at least 14 days before spraying takes place with additional medical checks to assess which people are likely to be affected by that spraying. That is particularly so out in west Auckland where people have suffered the spraying time and time again without the full medical help they deserve. 
As I mentioned earlier the power to examine organisms in this bill requires a database to ensure that right from the start we understand the organisms involved. An education programme for children and right throughout the population is a definite way to help that identification. With the examination process those checks would be linked with the database and the organism identified very quickly. 
 New Zealand First supports this bill because it is very important to our economy to make sure that the likes of the varroa bee mite do not come in and spread rapidly before this Government will do anything about it. Sitting on its hands doing nothing—as the Government has done with this bill—is a shame but now that the bill is back in the House for its final reading let us get on with it and make sure that it is put in place properly so that we can stop these organisms coming in right from the start. 
DARREN HUGHES (NZ Labour—Otaki) 
: 
 This is a bill that is supported by all parties in the House yet Opposition members insist on complaining about how long it has taken and then take long calls like that one which do not add to the value of the debate. It is time that the acting leader of New Zealand First Mr Catchpole let this bill progress through the House. 
IAN EWEN-STREET (Green) 
: 
 It did not seem to make much impact on members of this House but this week has been a very significant week for biosecurity in New Zealand. The incident I am referring to occurred on Wednesday when it was announced that Dr John Clearwater had found a pheromone for the painted apple moth. For members who are not into pheromones they are the sexual attractants exuded by insects. Dr Clearwater has been working on pheromone analysis for 22 months and has finally got to the point where he has a synthetic pheromone that can be used to attract male— 
Gerrard Eckhoff 
: Artificial. 
IAN EWEN-STREET 
: No it is not genetically engineered. It can be used to attract male moths away from the females. They get attracted to the pheromone and get trapped and the females do not get fertilised. It is a very good way of cleaning up the hot spots we have with the painted apple moth spraying in Auckland. I applaud Dr Clearwater. It is a very complex issue he has worked diligently at it and perhaps most significantly of all he has paid his own way. Dr Clearwater has taken 22 months to do it and it is an outstanding success but the absolute tragedy of what has happened this week is that it should have happened 2 years ago. 
In May 1999 when the painted apple moth was first discovered Dr Clearwater and his team who found the pheromone for the white spotted tussock moth in east Auckland were denied access to viable painted apple moth females. The work went to Forest Research Institute and HortResearch who were the people who failed to find the pheromone for the white spotted tussock moth. They similarly failed to find a pheromone for the painted apple moth. Dr Clearwater then offered his services for free in the hope that we would be able to eradicate the painted apple moth. Had he been able to get access to the painted apple moth females when he first asked for them—and when I was calling for it in this House—22 months would have elapsed and we would not have had the widespread incursion of the painted apple moth into west Auckland. We would not have needed to have blanket aerial spraying with all its concomitant health impacts on the residents of west Auckland. 
This Government needs to hold an inquiry into the Ministry of Agriculture and Forestry’s behaviour and its handling of the painted apple moth incursion. It has been absolutely outrageous. When we think back to what the Ministry of Agriculture and Forestry did and did not do in those early days it beggars belief. It took the ministry 2½ years—not months not weeks not days but years—from the first discovery of the painted apple moth until it did some basic things like trapping to find out the extent of the infestation and feeding trials to see what the painted apple moth would eat. It took the ministry 2½ years to put photos in the paper so that the residents of west Auckland knew what they were being sprayed for. It took 2½ years to put limitations on the removal of garden rubbish around west Auckland so that people would not unwittingly spread it from place to place. 
That is absolutely outrageous. It is one of the least competent exhibitions of containment by a Government department that I am aware of. It is just scandalous but have heads rolled in the Ministry of Agriculture and Forestry? No they have not. The ministry failed to contain the painted apple moth. In the early days the then Minister for Biosecurity said in this House: “Don’t worry about the painted apple moth. The female can’t fly therefore it can only spread 500 metres a year. Trust us we know what we’re doing.” She did not actually say “trust us”—that is my embellishment but what the Minister overlooked did not know or did not take the time to find out was that in the pupal phase the painted apple moth can fly. The pupae do not have wings but they balloon and fly in the wind. 
Mr SPEAKER 
: I have given the member a pretty wide range. He will now come to the bill and whether he is in favour of the third reading. 
IAN EWEN-STREET 
: You have been very generous Mr Speaker and I will do exactly that. 
This bill fills some important holes in our Biosecurity Act. I suppose one of the more important things is the notice that chief technical officers have to give before they can spray for incursions. As it stands at the moment if there is an infestation of say foot-and-mouth disease in a remote rural area the Ministry of Agriculture and Forestry has to give 14 days’ notice before it can try to eradicate the infestation. In a situation like foot-and-mouth disease 2 weeks could be the difference between containment and eradication and an economic disaster for this country so it is very sensible to reduce that limit. However I do have concerns about completely taking away any limit at all. I can accept that if there is a foot-and-mouth disease infestation in a remote rural area the ministry should get in there and spray. It should do whatever has to be done to contain and eradicate but what happens if the infestation is found in a farm homestead? We cannot just go in there without any notice at all and spray children domestic pets and animals such as horses. We simply do need to give people notice. 
With the passage of this bill I hope that the power we are giving the chief technical officers will not be abused. They need to be flexible and they need to learn lessons from the way the Ministry of Agriculture and Forestry behaved in west Auckland. There it was simply “We have $90 million; we’re going to get rid of the painted apple moth come what may.” The Ministry of Agriculture and Forestry has a duty to be responsive to the community. It has a duty to communicate and consult with the community. I think the lessons of the painted apple moth are actually being learned. The way the ministry behaved with the Asian gypsy moth outbreak when a single male was discovered in the Waikato was very good. 
I am pleased this bill is going through. It fills some holes in our biosecurity but many things still have to be done. The most important thing we have to do now is address the sea container problem. As I have said in this House many times before over 400000 sea containers come into this country every year and only 24 percent of them are inspected and decontaminated. It is incumbent on the Government to raise that to 100 percent so that we are putting a fence around the top of the cliff and not an ambulance at the bottom. 
DAVID PARKER (NZ Labour—Otago) 
: 
 I rise to support the bill and to thank the last member for his considered clearly expressed opinions which I found helpful and valuable. I am not going to add to them. I recommend the legislation to the House. 
KATHERINE RICH (NZ National) 
: 
 It must be pretty frustrating for members on that side to have to stand up and give such short speeches. Some members may leave the House having said only things like “I support the bill.” and “I move that the question be now put.” When they have gone down in history and people in the future look up their contributions they will see that they were quite limited indeed. 
In terms of making contributions today the Opposition does not apologise for taking some time in debating this issue even though there is unanimous support for the bill. This is a very important issue. If something goes wrong with biosecurity this economy could be shut down virtually overnight. The cost to the economy of a foot-and-mouth outbreak could potentially be $10 billion so members on this side have taken the issue seriously. That is why we have debated this bill aggressively and enthusiastically. 
I must say that the bill is being passed unanimously today only because of the enthusiastic work of the Opposition members on the Primary Production Committee. I think it is important to pay tribute to some of the members of that committee. Mr Gavan Herlihy made a huge contribution to the Primary Production Committee as did Philip Heatley who has been one of the more aggressive debaters on this issue in this House and Shane Ardern who is our spokesman for biosecurity. He has very much held— 
David Benson-Pope 
: That speaks volumes about the National Party doesn’t it? 
KATHERINE RICH 
: It is interesting that Mr Benson-Pope the country’s most noxious incursion makes that comment because one of the things that members thought was most unusual was the fact that his Government had put this portfolio in the hands of Minister Marian Hobbs. This is one of the more important portfolios one that rural communities very much depend on. How did the Government signal that importance? How did it show the community how important biosecurity was? The Government gave the portfolio to Minister Marian Hobbs who is also known as Minister “Boo Boo”. 
Mr SPEAKER 
: No no in this House all members are honourable members or Ministers. Please carry on. 
KATHERINE RICH 
: I think it is important to go back to one of the main comments which I thought was very telling about that Minister’s handle on this portfolio. After a terrible track record with the portfolio she came out and said: “I think that finding only six incursions in the last fortnight shows that we’re really very good at surveillance.” That did not make many members on this side of the Chamber feel very confident that she was in control of the portfolio. 
It is worthwhile at this stage to go through the biosecurity report card of this Government. Even though there were only about 10 incursions prior to 1999 there has been a huge influx of unwanted pests and biosecurity risks since that time. In April 2003 we had the cane toad and in March 2003 we had the fall web worm the crazy ant and the Asian gypsy moth. I feel like David Attenborough when discussing some of these problems which the Government simply has not been able to— 
Dr Paul Hutchison 
: They let them in? 
KATHERINE RICH 
: Yes it welcomed them in in fact. Some people think that immigration policies are confined to the immigration portfolio but the biosecurity portfolio has a very active immigration policy under this Government. 
Looking at this particular bill I think that although there is unanimous support for it it is important to take the time to debate the issues fully. Biosecurity is very much an issue where the portfolio is more or less an insurance policy of sorts. If we do not get right the investment in biosecurity then there will be significant costs further down the track. I think we have seen that with the painted apple moth. So far the cost of dealing with that particular incursion has totalled $90 million. Imagine if that money had been spent on a more thorough investigation of sea containers when they came to New Zealand! 
I have to say I was quite shocked to hear that fewer than 25 percent of sea containers are actually checked when they come into this country. The checks are not very thorough. The check entails the container being opened and an official popping his or her head in to see if anything jumps out. That is not the sort of investigation we expect. The Ministry of Agriculture and Forestry certainly has a lot of work to do to try and— 
Darren Hughes 
: Give it away. 
KATHERINE RICH 
: I raise a point of order Mr Speaker. I know that that member is very new and has aspirations of being on the front bench but he should know that he is not allowed to make silly comments when he is not in his own seat. 
Mr SPEAKER 
: I shall put it this way: I am not going to adjudicate on whether the member’s comments were silly; I can say that if he wants to interject and if he is not acting as a whip he should go back to his seat. 
KATHERINE RICH 
: We have a very fragile economy which can be put at risk and certainly has been put at risk in the last few years. The biosecurity report card is nothing less than appalling. We have more problems and more incursions than we have ever had before. I think the Government needs to stop thinking in a short-term way about biosecurity investment and to put a greater amount of investment into particularly the investigation of sea containers as they come into this country. If it does not we are going to continue to have a number of very expensive problems down the track. As I mentioned earlier had the $90 million that has been spent on getting rid of the painted apple moth been spent on doing thorough investigations in the first place the chances are that we would not have that particular problem. 
This is an important bill that introduces some quite significant powers for the Ministry of Agriculture and Forestry. The bill gives the ministry the ability to act more quickly which I think is important. It is important that it be able to act in a timely manner if there are problems to do with scrapie mad cow disease or foot-and-mouth disease. It is good that the Ministry of Agriculture and Forestry will have the ability to act more quickly than it has done in the past. The ministry will also have greater powers to audit which I think is important. Greater penalties also are introduced in this bill and that will quite clearly send a message to members of the public that if they do not act in a timely fashion and alert the Ministry of Agriculture and Forestry to incursions they have discovered there is a penalty involved. 
This legislation is just an amendment bill. It augments the Biosecurity Act 1993 which as we know aims to exclude eradicate and effectively manage pests and unwanted organisms. The Opposition will support anything that will strengthen biosecurity. We understand the importance of the portfolio and its impact on the economy. It is a shame that members on the other side of the House do not. 
MARK PECK (NZ Labour—Invercargill) 
: 
 I support the bill. 
Dr PAUL HUTCHISON (NZ National—Port Waikato) 
: 
 Thank you for the opportunity to speak on this hugely important Biosecurity Amendment Bill which National will support because National realises the great importance of biosecurity to New Zealand from many points of view: from an economic point of view from an environmental point of view and undoubtedly from an animal and human point of view. 
I am greatly sorry to report to the House that the Labour Party does not appreciate how important biosecurity is. To hear a little while ago the remark of Darren Hughes that this bill should progress more rapidly through the House is absolutely ironic. Darren Hughes is a member of the Labour Government which has allowed this bill to wallow on the Order Paper since 16 August 2001. It has not been progressed by Labour. He had the extraordinary cheek to suggest that it should now— 
Darren Hughes 
: Audacity. 
Dr PAUL HUTCHISON 
: No no there is no audacity on his part; “cheek” is the more appropriate word. The important thing is that here is a bill that is hugely important yet Labour has not shown any concern about it. It has dawdled on it for the last 2 years and now under urgency it wants to progress it. Labour members certainly have not made this bill a priority. This minority Labour Government has given priority to things such as the Care of Children Bill; it wants to consider whether the lesbian partner of the mother of a baby conceived using assisted human reproduction techniques should be called the father. 
Mr SPEAKER 
: Order! Can we come back to this bill please? 
Dr PAUL HUTCHISON 
: I am really pointing out how hugely important this bill is. As Federated Farmers pointed out in its very apt submission the importance of biosecurity to New Zealand is absolutely vital. After all pastoral exports are valued at $13 billion and comprised 42.7 percent of all exports in 2001. We learn that if there was an outbreak of foot-and-mouth disease in New Zealand it would result in a cumulative loss of $10 billion over 2 years and the loss of 15000 jobs. Yet Labour put this bill to one side and gave preference to other far less important legislation. 
The Government’s record is absolutely appalling when it comes to biosecurity. As my colleagues have pointed out since October last year there have been 11 incursions of a whole variety of organisms from the Asian gypsy moth to the North American southern ring-necked snake the cane toad and the scorpion and this Government has done little about it. It is important to reiterate what the Associate Minister for Biosecurity told the House on 26 March 2003. She said: “… I think that finding only six [incursions] in the last fortnight shows that we really are very good at surveillance.” That is a shocking indictment on the Labour Government and on that Associate Minister for Biosecurity. It is appalling how lackadaisical she has been about this very very important issue of biosecurity. 
One of the other points that has been made is that sea containers continue to be a source of biosecurity incursions because only 25 percent of those that arrive here are checked properly. 
Hon Harry Duynhoven 
: What was the percentage under National? 
Dr PAUL HUTCHISON 
: The point is that this Labour Government has been in power for almost 4 long unfortunate years and only 25 percent of containers are checked. The Government is worried that it might cost $90 million to carry out proper surveillance. The Government has already spent $90 million on the painted apple moth campaign in west Auckland which has been very badly mishandled yet it is holding back on ensuring that there is proper inspection of sea containers which are one of the first areas where inspection should be done properly. As well as that the Government is commissioning very little new research into technologies to reduce the cost of inspecting containers. That again is very very serious. The Government is basically taking a passive attitude towards this very important area of biosecurity. 
One example and I do not know whether it has been brought up previously is the elimination of the white spotted tussock moth in 1997-98 under National. National demonstrated how to run a successful eradication campaign but what has happened with the painted apple moth? It arrived in late 1999. Labour did not learn the lessons of the white spotted tussock moth campaign and the painted apple moth was allowed to spread for more than 2 years before aerial spraying began. The Auditor-General released an absolutely damning report last year on the Ministry of Agriculture and Forestry’s slow and uncoordinated response to the painted apple moth. 
Hon Harry Duynhoven 
: What about the varroa bee mite? 
Dr PAUL HUTCHISON 
: The member raises a very important point. Under this Government the management of that mite has been shocking. 
I want to point out one other slight irony which involves the Greens. On the one hand we hear the Greens say in very shrill tones that they want zero tolerance regarding genetic modification (GM) although there have not been any reports anywhere in the world of adverse effects from GM food. On the other hand today we hear that Nandor Tanczos and his colleagues are incredibly upset with the Customs Service which has instituted a zero tolerance policy in terms of the importation of hemp products. Tetrahydrocannabinols undoubtedly have been proved to be harmful. The Greens want zero tolerance for something that has been proved to do no harm but they want laxity for something that is harmful. 
Stephen Franks 
: It’s called the precautionary principle. 
Dr PAUL HUTCHISON 
: It is the precautionary principle in reverse. I end by saying that the Biosecurity Amendment Bill is a very important bill. National supports it and we are deeply concerned that the Government has not paid biosecurity the attention that this very important area deserves. Federated Farmers in their very good submission put it all into perspective when they said that it is vital that the Government got on and started putting proactive efforts into making a realistic biosecurity strategy for New Zealand. 
Bill read a third time. 
Crimes Amendment Bill (No 6) 
Instruction to CommitteeCWH 
Hon MARK BURTON (Deputy Leader of the House) 
: 
 I move  
That it be an instruction to the Committee of the whole House on the Crimes Amendment Bill (No 6) that it take the bill part by part and consider any schedules as one question. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 81 
Labour 52; New Zealand First 13; Green Party 8; United Future 8. 
Noes 34 
New Zealand National 26; ACT New Zealand 8. 
Motion agreed to. 
Wool Industry Restructuring Bill 
Procedure 
Hon MARK BURTON (Deputy Leader of the House) 
: 
 I seek leave that at the conclusion of debate on all stages of the Crimes Amendment Bill (No 6) the House move directly to Government order of the day No. 11 the Wool Industry Restructuring Bill. 
Mr SPEAKER 
: Is there any objection to that course being followed? There appears to be none. That is so ordered. 
Crimes Amendment Bill (No 6) 
In Committee 
Clause 1 Title 
JUDITH COLLINS (NZ National—Clevedon) 
: 
 This title is not a fair reflection of the contents of the bill and it is very disturbing that a Minister who purports to be in charge of telecommunications has not picked that up. I note that this bill should have been with the Associate Minister of Justice; he might have read it but I doubt it. This bill has a terrible flaw in it: it is missing a very important part. I hope the Minister in the chair the Hon Harry Duynhoven will listen to this because this is very important. A huge part of this bill deals with increasing the penalties for home invasion. That sounds great except that this Government repealed the part of the Crimes Act that deals with home invasion last year. 
I know that the Minister in the chair is looking puzzled by that so I say to him that he should get the officials here. If he looks at clauses 3 to 7 he will find that a huge section of the bill is absolutely redundant because sections 17A to 17E of the principal Act were repealed by this Government last year—and here is the proof. We have a Government that is asking this Parliament to put through and to vote on bills that are redundant. 
Hon Tony Ryall 
: Read the clauses. 
JUDITH COLLINS 
: I will list the clauses for the benefit of the officials. Perhaps the Minister could talk to the officials about clauses 3 4 and 5 which deal with increasing the penalties for home invasion crimes. 
Hon Tony Ryall 
: You can’t amend provisions that don’t exist. 
JUDITH COLLINS 
: One cannot amend provisions that do not exist and worse than that further on in this bill that we are being asked to vote on today are provisions dealing with sections 17A to 17E of the Act. There are errors throughout this bill because Parliament repealed sections 17A to 17E of the Act last year. That is shoddy work from the Government. 
We have looked through the bill and put in an amendment dealing with that issue. We would like it to be sorted out because it should have been addressed in this bill. The issue of home invasion has been in and out of the bill everywhere. Moreover if we go through to other clauses in the bill we find there are whole clauses about it. 
I would also like to talk about the concept of colour of right. This Government has said in this bill that it does not like the concept of colour of right and it wants to change the definition to “claim of right” because it does not want to extinguish customary rights. Instead it wants to look at cultural interpretations. “Colour of right” is a term that has been used time and time again through the courts. It has been used in the legal system of England and then in New Zealand for hundreds of years. Consequently that particular part of the bill should be left as it is. I talked to criminal lawyers about it last night and they said it is shocking to change a term like “colour of right” by trying to make it become a claim of right. That is absolutely appalling. It is a very poor piece of drafting which should have been fixed. 
I will come back to the particular part of the bill about home invasion. That part was looked at only in May of this year. This bill had been floating around for the last 3 years until someone suddenly looked at the issue of home invasion and that is not good enough. It is not good enough for this Government to take 3 years to work out what it has already done. That issue occurs all the way through the bill and the Government has not even taken the time to go and get it fixed in a proper way. That is not good enough. If we go through the bill we see there are other clauses that need to be looked at. 
KEITH LOCKE (Green) 
: 
 The title of this bill relates to amendments to the Crimes Act. To justify that title these amendments should improve the ability of the New Zealand justice system to apprehend and convict criminals. Some of the provisions in the bill are good; they modernise the language and description of offences. One of the main features of the bill is the inclusion of a whole new category of offences that deal with people intercepting other people’s electronic communications and hacking into their computers or to use the correct terminology remotely accessing others’ computers. The bill makes it illegal to interfere with people’s conversations through listening devices by applying that to electronic interception or computer hacking. 
There would be a big privacy problem if we were to allow people to freely intercept others’ electronic communications and it is good that the bill addresses that. For example we do a lot on the Internet these days and increasingly we buy things on the Internet. So stopping people from intercepting our credit card numbers as they whizz around the Internet as part of that electronic commerce is a very good thing. The provision against hacking is good too. Although people sometimes glorify the successes of some hackers—there is sometimes a bit of a David and Goliath atmosphere with some hackers treating it as a sport to try to access the Pentagon or a big Government computer— 
The CHAIRPERSON (H V Ross Robertson) 
: The title is a very narrow debate. 
KEITH LOCKE 
: Yes. I think it is important in this debate to see what has changed in terms of improving the ability to catch criminals in relation to hacking. Although hacking may have some popular appeal—and the people who do it for sport are usually snapped up by the security companies and end up on big salaries—for the ordinary person it is very upsetting to be hacked particularly if it affects one’s computer. So it is good that there is a provision here to make that illegal. 
Unfortunately the bill does give exemptions from those provisions to the police the Government Communications Security Bureau and the Security Intelligence Service and that is not in keeping with the theme of the title. Instead of improving our ability to apprehend lawbreakers we are giving those agencies the ability to affect in some way our privacy which is a right under the New Zealand Bill of Rights Act that should be very much upheld in our society. No good reason is given in this bill for doing that and a lot of innocent people will get caught. Members should think about how many emails they receive in a week and in a year—it ends up being thousands and thousands—and if any one of the people who send those emails is intercepted under these provisions then a member’s communications will also be intercepted and could end up being affected in that way. 
I accept that there has to be a balance and sometimes we may give away to some extent the hard-won right to privacy if there is a very clear community gain. That is the real spirit of a crimes amendment bill but no one gave any statistics or anecdotal evidence to the Law and Order Committee through any stage of its consideration of this bill to show that we would catch many extra criminals through giving the police and the intelligence services that ability. We need such evidence if we are to give away our privacy in that respect. This bill is about the Crimes Act and about catching criminals and everyone knows that serious criminals can very easily avoid interception using code encryption and those sorts of things. 
Hon HARRY DUYNHOVEN (Minister of State) 
: 
 I will just take a very brief call on behalf of the Minister the Hon Phil Goff to respond to the comments made by Judith Collins in respect of clauses 3 to 8. I suggest that the member actually gets up to speed. If she looks on the Table she will see that there are Supplementary Order Papers and that Supplementary Order Paper 84 in the name of the Hon Phil Goff answers all her questions. The provisions on home invasion have already been taken care of in the Sentencing Act. If Judith Collins—instead of jabbering away with snide comments—looks at that Supplementary Order Paper she will see that the issue has been taken care of already. 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: 
 I want to speak against the title of this bill simply because I do not think the title reflects the content of the bill. I say to the Minister in the chair the Hon Harry Duynhoven that if he wants the Opposition to be cooperative in relation to the provisions of this bill he should not go around insulting members who have taken the time to go through it given that the Government has taken over 4 years to bring Supplementary Order Paper 84 to this Committee to fix amendments in this bill that should have been fixed earlier on. If the Minister looks at the  
Hansard 
 record of when this bill was introduced he will see that the promoting Minister Mr Goff railed against the previous Government for not having done something about the home invasion issue in its 9 years in office. In October 1999 Mr Goff said that this would be priority legislation for the Labour Government and here we are with the bill having taken 4 years to get into the Committee. 
Judith Collins was absolutely right when she said at the beginning of her speech that the title does not reflect what is in the bill. This bill would more correctly be called the “Crimes Amendment (To Cover up Ministerial Laziness) Bill”. That is the point that Judith Collins made. If that Minister thinks he will have cooperation from the Opposition to get this bill through Parliament more speedily then he should be more respectful of members who have made an effort to identify the failings of this Government which has taken 4 years to fix amendments in this bill that refer to repealed amendments. That is a sloppy performance by the Minister. We do not want to see the Minister in the chair behave as he did in the previous call. 
Hon GEORGINA TE HEUHEU (NZ National) 
: 
 I want to follow on from my colleague Tony Ryall and basically just to emphasise what clearly is— 
Judith Collins 
: A Supplementary Order Paper. 
Hon GEORGINA TE HEUHEU 
: The Government has clarified that there is a Supplementary Order Paper. It has been sitting around for quite some time and when did the Government actually realise that? When did the Government realise there was the anomaly that my colleague Judith Collins has pointed out? 
Hon Tony Ryall 
: About a month ago after 4 years. 
Hon GEORGINA TE HEUHEU 
: That is symptomatic of the Government’s knee-jerk reaction on a whole raft of things. We saw that earlier in the week with the immigration legislation that was passed through all its stages in urgency. We see it again today. Stuff-ups occur and suddenly people think they had better do something about them and with this bill it is the same sort of thing. The problem is that these issues are very serious so they deserve a more coherent approach than this Government seems to be willing to give to them. 
In particular the area of crime and penalties for home invasion tugs at the hearts of New Zealanders. We all know that and certainly because of the way the public reacts when various violent things happen out there then yes Parliament feels— 
The CHAIRPERSON (H V Ross Robertson) 
: This is a narrow debate. Could the member please speak to the title? I know it is difficult. 
Hon GEORGINA TE HEUHEU 
: Of course this is about the title. What is in that title to tell anybody what the Government is trying to do? OK this is the Crimes Amendment Bill (No 6) but what is this Government attempting to do in this bill other than to react in a knee-jerk way to public reaction and to try to give the impression that the Government is doing something when it has taken 4 years to do anything to fix the anomalies in the bill? We have the Crimes Amendment Bill (No 6) and Supplementary Order Paper 84 in the name of the Hon Phil Goff but that says nothing about the way that the Government approaches a very serious area indeed. It does not give that area its proper attention. 
This bill should be called the “Crimes Amendment (Corrections In Haste) Bill” or the “Crimes Amendment (Corrections in Haste) Bill (No 6)”. The Government has been sitting for 4 years and only now has this bill come to this Committee when the Government knows the matters it deals with concern us as well. It is not as though we have to suddenly go into urgency. If one approached this area in the comprehensive way that it deserves then this bill would have been approached in a different manner. 
This title like a lot of the things that we see in this Parliament while it gives a bare understanding of what might be covered in the bill does not tell the public anything. The title is very innocuous. It does not say to the public that the Government has only just seen fit to address this bill after letting it sit around for so long and that although it knows these matters are important that was the best it could do. Well I say that that is not the best this Parliament can do. I say that this Government should pick up its act approach these things in a more serious manner and stop the knee-jerk reaction kind of stuff that we have seen this week on a number of other bills. That is not the way to treat serious issues. The area of crime and penalties for home invasion is a serious issue for New Zealanders. 
STEPHEN FRANKS (ACT NZ) 
: 
 I will say at once that I come to this bill with half-an-hour’s reading. The Hon Ken Shirley who took the time and was on the committee when this was first dealt with in 1999 has given me some briefing notes. Looking at the title it is very hard indeed to see why we should have a title as bland and as innocuous as the “Crimes Amendment Bill (No 6)”. It could have been descriptive. It could have been something like the “Property Crimes Amendment Bill”. It could have been something that would give people a handle and an opportunity when they glanced through the Order Paper or were looking through the statute book or searching through a computer entry system to see something that would have told them what this amendment did that others did not. In other words a title should distinguish a bill. This is simply a label that is no better than a number. The “No 6” actually gives more information than the title that has been chosen for this bill. The number of different times that we have heard it mentioned it could also have been referred to as the “Anti-hacking Bill” the “Computer Crimes Bill” or it could possibly have been the “Tidy-up Bill” but to simply call a bill the Crimes Amendment Bill (No 6) does not tell users anything. I believe that it is bad practice. It is consistent with other bad drafting practices that we have like the practice of having enormous single parts. 
This bill actually shows all of the tawdry little tactics and the defects in dealing with a Government that subverts the integrity of the document and its usability to its short-term political objectives. Plainly there must have been a short-term political gain in introducing it back in 1999. 
 The bill with “No 6” in its title means that it probably was the sixth amendment to the Crimes Act in 1999. That shows a very active Government. It shows that at the time there was a Government and a Minister of Justice the Hon Tony Ryall who were actually doing something in the area of crime. Now here we are 4 years later and No 6 is still No 6. I do not think there were any amendments to the Crimes Act in 2003. It shows just what priority or lack of priority is given to crime. 
When speaking to the title of a bill that amends such a fine piece of legislation as the Crimes Act and considering why we would have a title as uninformative as this we could just assume that it was laziness or a drafting practice that does not take account of the needs of those who are looking for the label or description—those who will need to try to find the amended legislation. I am coming to the view having realised just how long this bill has been before Parliament that this innocuous kind of description—this kind of labelling—does serve a Government. It helps to disguise just how long something has been sitting without attention while other more fashionable things like the enormously useful Electoral (Integrity) Amendment Bill went through while the Government changed matrimonial property law and now is turning lesbian mothers into fathers. All of these things have had more urgency than the Crimes Amendment Bill (No 6). 
Ron Mark 
: I raise a point of order Mr Speaker. That member Mr David Benson-Pope has just called the honourable Stephen Franks a crook. Chuck him out of the Chamber for God’s sake! 
The CHAIRPERSON (H V Ross Robertson) 
: The member will stand withdraw and apologise. 
David Benson-Pope 
: I withdraw and apologise. 
STEPHEN FRANKS 
: I thank Mr Mark for trying to uphold standards in the Chamber. I have managed to create a sort of filter that filters out the drivel one gets from Mr Benson-Pope. The contribution Parliament gets from the member for Dunedin South must be one of the worst from any whip. He is a whip who lowers the tone of Parliament every time he opens his mouth. 
Ron Mark 
: When he gets off his backside. 
STEPHEN FRANKS 
: Exactly. To bring this to a conclusion—the Government has had 4 years to try to make this bill mean something. It has had 4 years in which it could have relabelled the component part to this bill in a way that would have helped the people who are going to use the legislation. The bill should at least have been called the “Crimes (Property Crimes) Amendment Bill (No 6)”. 
DAVID BENSON-POPE (Senior Whip—NZ Labour) 
: 
 I move  
That the question be now put 
. 
The CHAIRPERSON (H V Ross Robertson) 
: Mr Mark has indicated he wants a call and we have not heard anything from New Zealand First. I am pleased to accept the call from the member. 
RON MARK (NZ First) 
: 
 I rise on behalf of New Zealand First to indicate that like other parties we will be supporting the passage of this bill through Parliament. That is not to say that we will agree with everything we hear from the Government on it—if we hear a jolly word other than abuse from across the Chamber which the senior Government whip has become renowned for outside the walls of this Chamber as well as inside them. I put it on the record that I have to concur with Mr Franks when he says that “Crimes Amendment Bill (No 6) and Supplementary Order Paper No 85” is not a very inspiring title to look at first thing in the morning. One could be forgiven for thinking that the bill deals with a whole heap of the extremely serious crimes that are currently facing this nation—such as violent crime which has escalated. 
In fact this bill deals with surveillance issues. It was long in its gestation in the Law and Order Committee. Given the length of time it has taken to get this bill to the floor I am bemused about why the Government has to do all of this under urgency. One would have thought we would have been debating this important bill a year or so ago at least. 
There is not a lot that I will say about the title of the bill. I simply signal that I have received a copy of Judith Collins’ proposed amendments. We will look at those from New Zealand First’s perspective and make a decision as we progress about whether we will support them and we will discuss some of the finer points of the bill as we progress through it part by part. Essentially if I were to suggest any change to the title it would probably be something along the lines of the “Bill that Shows Quite Clearly How Labour Just Doesn’t Seem to be Able to Get its Act Together and Get Legislation That is as Important as This Through the House in a Timely Fashion”. But of course that is a very hard sort of statement to condense down into one title. I simply say this one time that we will support the title and discuss the bill further in the part by part debate. 
JILL PETTIS (Junior Whip—NZ Labour) 
: 
 I move  
That the question be now put 
. 
Motion agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 99 
Labour 52; New Zealand National 26; New Zealand First 13; United Future 8. 
Noes 16 
ACT New Zealand 8; Green Party 8. 
Clause 1 agreed to. 
Clause 1A Commencement 
The question was put that the amendment set out on Supplementary Order Paper 84 in the name of the Hon Phil Goff to clause 1A be agreed to. 
Amendment agreed to and clause 1A as amended agreed to. 
Part 1 Amendments to principal Act 
KEITH LOCKE (Green) 
: 
 I would like to address clause 16B which gives exemption to the Government Communications Security Bureau from the prohibitions in the bill against intercepting electronic communications. [ 
Interruption 
] 
The CHAIRPERSON (H V Ross Robertson) 
: I am sorry to interrupt the honourable member but members are well aware that it is not permissible to have cellphones ringing in this Chamber. I ask the member whose cellphone was on to please stand and apologise to the Committee. 
Ron Mark 
: I apologise to the Committee. My cellphone is now on silent. 
The CHAIRPERSON (H V Ross Robertson) 
: I thank the member very much. I appreciate that. 
KEITH LOCKE 
: I was speaking about the exemption being granted to the Government Communications Security Bureau under this bill from the general prohibition about intercepting electronic communications. The bill states that the communications that will be intercepted by the bureau will include foreign intelligence and in section 216A(1) in clause 16A(1) it defines “foreign intelligence” as being intelligence to or from foreign organisations. We see from the definition of “foreign organisation” that that can include for example the subsidiary of an overseas-owned company. We know that in our society a large proportion of our economy is now overseas owned so even though the Government has often claimed that the only targets of the Government Communications Security Bureau will be overseas people in fact when we look at the definition we see that a large proportion of people in New Zealand would be subject to interception because they work for subsidiaries of foreign companies. 
 This bill could give a bit of an impetus to the Taranaki savings bank.The rest of our banking system is made up of subsidiaries of foreign companies. If one sends an email to one’s bank under this legislation one’s communication could be intercepted by the Government Communications Security Bureau because all those overseas banks are included in the definition of a foreign organisation. 
The other question and it comes up in the report back from the Law and Order Committee is the extent to which electronic interceptions by the Government Communications Security Bureau and other agencies will go into the area of key word searches. I shall quickly read out a couple of sentences from the report relevant to this: “Key word searching is where the person undertaking the interception or search uses a computer programme to help find or monitor information by searching for particular target words. Key word searching is viewed as being more invasive than other methods used to monitor postal mail or phone calls. It is seen as a gross invasion of privacy as it is indiscriminate as to the context in which the words are used leading to the scrutiny of many innocent emails and the potential threat to the safety of political dissidents in countries where political opposition is not tolerated.” The report then goes on: “The committee considered the safeguards in the bill are adequate to ensure that personal privacy is balanced appropriately with the rights of the State to protect its citizens.” 
That conclusion from the committee is not correct. When one looks at the Waihopai satellite communications interception station which does intercept millions over a year of communications that pass through to Pacific satellites that its dishes are focused on many of us may have our international communications—fax phone or email—intercepted by that system and that system is a key word system. It is not a system that is fixed on particular lines as envisaged say in the Telecommunications (Interception Capability) Bill now before the Law and Order Committee. The Waihopai system is a key word interception system. In regard to the bit I quoted from the bill it could lead to the scrutiny of many innocent emails of New Zealanders and that is very bad. 
There has been a concern around the world about key word searching. Under the bill the Government Communications Security Bureau is granted the power to intercept communications and where does it end? It can extend into key word searching or there can be other developments that people are worried about internationally. 
The question was put that the following amendment in the name of Keith Locke to clause 19 be agreed to: 
to omit new sections 254 and 255. 
A party vote was called for on the question  
That the amendment agreed to. 
Ayes 8 
Green Party 8. 
Noes 107 
Labour 52; New Zealand National 26; New Zealand First 13; ACT New Zealand 8; United Future 8. 
Amendment not agreed to. 
The CHAIRPERSON (H V Ross Robertson) 
: The next amendments are also in the name of the honourable member Keith Locke. 
Keith Locke 
: I raise a point of order Mr Chairperson. These other amendments are amendments to the next part as I understand it? 
The CHAIRPERSON (H V Ross Robertson) 
: No Part 1 is clauses 2 to 24. The amendments in the member’s name range from 21A through to 21J so they are covered in that part. I shall put the question now. 
Keith Locke 
: In the bill the bolded section Part 1—the amendments 21A etc.—are under the bolded section headed Part 10. 
The CHAIRPERSON (H V Ross Robertson) 
: It is part of this part of the bill; the part that will be inserted into the Act. 
Keith Locke 
: Surely if sections— 
The CHAIRPERSON (H V Ross Robertson) 
: I think the member is confused. The amendments he is putting forward are part of Part 1. 
Keith Locke 
: If you look at the title page of the bill pages 1 and 2 the amendments to the principal Act 20-24 are under the bolded “Part 10” and not under the bolded “Part 1”. I bring up this point because I was assuming that my amendments would come up under that bolded “Part 10” and I was going to address them to the Committee under that. There is no indication from that table of contents that they come under Part 1. They are at the end of the bill. If you look at the order of them as they are described in the bill they are at the end of the bill that is after the other— 
The CHAIRPERSON (H V Ross Robertson) 
: I refer the member to the fact that a new part is to be inserted into the Act. However it is being inserted by this part of the bill. I now wish to put the question. 
The question was put that the following amendment in the name of Keith Lock to clauses 21A 21B 21C 21D 21E 21F 21G 21H 21I and 21J be agreed to: 
to omit these clauses. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 8 
Green Party 8. 
Noes 107 
Labour 52; New Zealand National 26; New Zealand First 13; ACT New Zealand 8; United Party 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Keith Locke to clause 21M be agreed to: 
to amend subclause (2) by omitting from new section 312Q(k)(iv) the word “and” and inserting the following new subparagraph: 
(v)the average duration of interceptions carried out under these powers; and 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 55 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8; Green Party 8. 
Noes 60 
Labour 52; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Keith Locke to insert new clause 21N be agreed to: 
to insert after clause 21M the following clause: 
21NNew section 312R inserted 
The 
principal Act is amended by inserting after section 312Q the following section: 
312R Ombudsman to audit 
The Ombudsman is to conduct an annual audit of all telecommunications’ interceptions carried out by police in the previous year. 
A party vote was called for on the question  
That the amendment be agreed to 
Ayes 55 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8; Green Party 8. 
Noes 60 
Labour 52; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Keith Locke to insert new clause 21O be agreed to: 
to insert after clause 21M the following clause: 
21ONew section 312S inserted 
The principal Act is amended by inserting after section 312Q the following section: 
312S 
Notification of innocent subjects 
Those persons who have been the subject of an interception warrant will be notified by the police of this fact if: 
(a)the interception warrant is no longer active because – 
(i)the interception warrant has expired and no application has been lodged for renewal; or 
(ii)police determine that they have no further intention to use the interception warrant; and 
(b)the police no longer have an active investigation on those persons; and 
(c)no charges have been laid against those persons. 
A party vote was called for on the question  
That the amendment be agreed to 
. 
Ayes 8 
Green Party 8. 
Noes 107 
Labour 52; New Zealand National 26; New Zealand First 13; ACT New Zealand 8; United Future 8. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 84 in the name of the Hon Phil Goff to clause 21 be agreed to. 
Amendments agreed to. 
Part 1 as amended agreed to. 
Part 2 Other matters 
STEPHEN FRANKS (ACT NZ) 
: 
 I am about to admit a failure and the failure is my not having realised Mr Chairperson as you were racing through Part 1 with the obvious approval of most of the Committee that it covers matters on which I wanted to record a position in the Committee stage for the ACT party. I believe that the same issues arise under Part 2. 
Some of these new definitions and some of the parts that are recorded as having been replaced in the schedules or repealed in this part appear to me to be matters that require further attention. In particular I am concerned about the definition of “dishonestly”. The term is used both in titles of things that are to be repealed and in the operative sections of a number of these provisions where previously the word “fraudulently” was used. It concerns me that the new term “dishonestly” appears to assume that anything that is not expressly or impliedly authorised is not honest. I believe that it should be put on the record that that is not the intention of the Committee in passing the bill. There is a huge range of activity in any free society that does not require anyone’s consent and that certainly is not dishonest just because there is no express or implied consent. The existing law the common law definition which is replaced by this part may have been a better definition in terms of what we are doing. 
I have some hesitation in raising this point because I was not on the Law and Order Committee. I have not had the benefit of hearing the submissions. I believe that it would be unfair to expect the Minister to get up to speak to this immediately but it does concern me that the words we have used in that definition do not go far enough to recognise that a lot of conduct—many things that can be done or not done—does not need to relate to anyone’s consent or authority and is not dishonest merely because there is no express or implied authority. 
The second point which is also a belated acknowledgment is that in new section 237 in clause 19 the term “blackmail” is extended to include to “disclose something about any person (whether living or dead)” instead of it being confined to the previous grounds of criminal or sexual conduct. That seems to me to leave it far too wide and to allow threats to be made of blackmail offences in relation to ordinary communication of information to ordinary conditional descriptions of things that people do in their everyday lives. It is perfectly proper for an employer for example to come to someone whom he believes to have been doing something wrong and say: “If you don’t do X if you don’t make this right if you don’t do something I will go to the police. I will disclose.” That was covered in the previous law as potential disclosure of criminal conduct. It may be covered by subsection (2) of section 237 which states “unless … a reasonable and proper means for effecting [the] purpose.” but given that Parliament will not look at this again for a very long time and given that we are now repealing the existing law and making the definition of “blackmail” even wider than it was I think we are doing the wrong thing. We are giving a weapon for the potential suppression of information a weapon for people to connive or collude in conduct they should not connive or collude in simply because they will be fearful of the very broad terms of the blackmail offence that is now being placed into law. 
I thank the Chair for his tolerance in allowing me to put these comments on the record in relation to a part of the bill to which they are not strictly relevant. 
KEITH LOCKE (Green) 
: 
 Part 2 discusses consequential repeals and amendments relating to the matters that we have discussed. It summarises and implements many of the issues that have been traversed so far. 
One thing I want to talk about particularly is the provision to allow access to computers. I want to bring in the matter of the Privacy Commissioner’s concerns. The Privacy Commissioner presented a number of submissions to the Law and Order Committee on various matters in this bill and he was particularly concerned about our granting the law and intelligence authorities the right to access computers remotely—to hack into computers. His argument and I agree with it and it has motivated one of my amendments is that the police already have the power to look at the contents of a computer when they search a premises under a warrant so why do they need to go further and have remote access or hacking powers which are very hard for us to oversee in any serious way? It is very hard for the police to be fully publicly accountable for the exercise of those powers compared with the exercise of their powers under a search warrant to look directly at a computer and its contents. I support the Privacy Commissioner’s concern that that power should not be granted. 
He had other concerns. For example he did not want interception warrants to apply by way of the police just going to a judge and getting a warrant on a one-off basis. Different judges will be dealing with those warrants and he thought there should be an additional control as there is in Australia where the federal ombudsman does an annual audit of interception warrants granted to the police. I think we should have implemented that provision. It was one of the things that one of my amendments dealt with. It would have meant that we do what is done in Australia and have an extra layer of accountability—that is an ombudsman auditing those warrants. 
A concern expressed by the Privacy Commissioner and most of the submitters to the select committee was that we should try to protect innocent people as much as possible. There are two ways of doing that. One is to discard the information acquired from intercepts and that is covered by amendments in this bill that provide that when information is no longer needed it should be discarded. I put forward an additional provision in one of my amendments. My amendment would have meant that an innocent subject was notified once the police investigation was over and it was quite clear that the police no longer had any interest in that person. Where an innocent person had been accidentally caught up in the interception system and no charges were laid my amendment would have meant that that person was notified that an interception had taken place. 
That is what the FBI does in America. The Law and Order Committee received a submission from a person who lives here in Wellington that one of her emails to a friend in the United States had been intercepted by the FBI and the FBI had reported that fact to the recipient of her email. That is a good provision and it could have been added to this bill. Sometimes in later life in relation to later events people are affected by an interception because it resulted in their names ending up on a database. There is a looseness and a capacity for error in any bureaucratic system. If the agency—the FBI in the American case or the police in the New Zealand case—notifies a person that he or she was subject to an interception order then that person at a later point if his or her credit rating or travel or something else is being affected at least will know that he or she was subject to that interception warrant and might be able to get to the bottom of the disadvantage that he or she is suffering. I think it is consistent with the general privacy themes that operate in our law that people should be notified of what information about them appears in public databases. 
The question was put that the amendments set out on Supplementary Order Paper 84 in the name of the Hon Phil Goff to Part 2 be agreed to. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 2 as amended be agreed to. 
Ayes 107 
Labour 52; New Zealand National 26; New Zealand First 13; ACT New Zealand 8; United Future 8. 
Noes 8 
Green Party 8. 
Part 2 as amended agreed to. 
Schedules 
The question was put that the amendments set out on Supplementary Order Paper 84 in the name of the Hon Phil Goff to the schedules be agreed to. 
Amendments agreed to and schedules as amended agreed to. 
Bill reported with amendment. 
Third Reading 
Hon PHIL GOFF (Minister of Justice) 
: 
 I move  
That the Crimes Amendment Bill (No 6) be now read a third time 
. I thank members of the House for their strong support for this bill. I think that apart from opposition from one quarter to one aspect of the bill everybody realises that this is legislation that needs to be introduced and will have a positive effect. 
I will comment very briefly on what happened during the Committee stage. Judith Collins was concerned that somehow this legislation had overlooked the repeal of some legislation on home invasion. Unfortunately Ms Collins a relatively new member had not seen the Supplementary Order Paper but I can assure her that the Supplementary Order Paper covered that. However I will comment a little bit in response to Mr Ryall’s comments on it. In 1999 he was the architect of home invasion legislation that was roundly panned by the Court of Appeal as being rushed politically inspired and totally inappropriate. I am proud that we now have legislation before the House that treats home invasion as an aggravating factor that starts murder sentences at 17 years and that does not single out home invasion as the only aggravating factor which is what that failed Minister of Justice did in the previous legislation. This legislation is totally appropriate and has been supported widely across the country. 
The second issue that came up during the Committee stage was interception warrants. Interception warrants now will be legally required in order to tap into emails or faxes. Any person who does that without the legal authority to do so will be committing a crime so this bill largely creates a protection for privacy. But of course we allow certain law enforcement agencies to have the power to tap into emails and faxes—just as they have always had the power to tap into telephone calls—with proper safeguards for individual privacy and with the involvement of the judiciary in allowing that to happen. It is clear to 99 percent of the country that our law enforcement agencies which are fighting against crime and transnational crime—and they now have the additional concern of international terrorism—must have the exact same ability where appropriate and where a member of the judiciary has verified that it is appropriate to tap into emails and faxes as they have always had to tap into telephone calls. 
This bill updates most of the property offences in the Crimes Act many of which have not been updated since the Act was passed in 1961. Updating is needed to have many of the property offence provisions reflect changes in technology crime and law enforcement since the Act was passed 40 years ago. 
Central to the bill’s reforms is plugging the gaps and areas of uncertainty in the Crimes Act’s application to computer-related crime. The bill will ensure that offending involving computer technology is adequately covered. 
 Amendments to Parts 9A and 11A of the Crimes Act which respectively contain interception offences and provisions relating to police interception warrants will ensure that the interception of emails and faxes by people who are not parties to the communication is illegal. Currently only oral communication is covered by the Crimes Act. The amendments relating to police interception warrants will help the police deal with organised crime. Currently the police when acting under an interception warrant can intercept only oral communications and cannot use any written communications such as text messages emails or faxes that are intercepted. Criminals are taking advantage of technologies that we all now take for granted and it is clearly important that the police have the necessary powers to deal with that. 
There was criticism by one party of the qualified exemptions for some State agencies from the offences relating to interception and unauthorised access to computers. The Law and Order Committee carefully considered those concerns against the necessity for the exemptions to allow effective investigations of for example organised crime or potential terrorist threats. The committee concluded that the safeguards provided in the bill together with existing statutory safeguards are adequate to ensure that personal privacy is balanced appropriately with the duty of the State to protect its citizens. I believe that the bill will strengthen privacy interests by criminalising some activity that is not currently criminal such as the interception of non-oral private communication and accessing computers without authorisation. 
A particular criticism of the bill was that the qualified exemption for law enforcement agencies from the unauthorised computer access offence gives police the power to hack into computers. It does not do that. The Crown Law Office provided a legal opinion to the select committee on the effect of those sections. In its opinion the effect is to put beyond doubt that a law enforcement agency accessing a computer system under some existing authority does not have unauthorised access. In other words it is not committing an offence if it already has some legal basis such as a search warrant for accessing the computer. This measure is a matter of clarification not a free licence for those agencies to hack into computers without legal justification. 
Aside from the computer and interception offences there are other important amendments that the bill makes to the criminal law. As well as the new computer offences the bill contains another new offence that of taking obtaining or copying trade secrets. The essence of the offence is wrongly acquiring something such as a document plan model or diagram of commercial value with the intention of obtaining financial gain. The offence of burglary is amended. The phrase “breaking and entering” is replaced with “entering without authority” which will remove technical arguments as to what constitutes a break. Effectively it means that burglary and unlawful entry offences are combined and that should assist the police in their efforts against burglary. The offence of blackmail is broadened from the current offence of extortion by certain threats. The new offence will apply to any threat of disclosure. The scope of the threat has also been widened to cover a threat to cause serious damage to property or to endanger the safety of any person. The offence of obtaining by deception or causing loss by deception replaces the current offence of false pretences. It will cover a broader range of financial benefits than the current offence does and the element of causing loss is also new. A number of new offences have also been broadened to include liability for reckless as well as intentional conduct. 
This bill is a very important update of New Zealand’s property offences regime. It will strengthen the criminal law and will give the police and the Serious Fraud Office more effective laws to deal with offending ranging from burglary through to organised crime. I thank members and officials who have worked on this legislation which I believe represents an important advance in the law. 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: 
 In speaking to the third reading of the Crimes Amendment Bill (No 6) and the associated amendments I want to say that on listening to the speech of the Minister of Justice I think it is clear that he has lost interest in the justice portfolio. He has very big responsibilities in foreign affairs which is his passion and it is clear that he has lost interest in the justice portfolio. I will tell members the reason for saying that. When he was Opposition justice spokesperson on the introduction of this bill in 1999 he railed against the Government for taking so long to bring this piece of legislation to Parliament. 
Hon Phil Goff 
: 40 years! 
Hon TONY RYALL 
: Oh 40 years! It is so pathetic. It would be sad if it were not so pathetic. He railed against the previous Government for not bringing this bill forward earlier. In one of Phil Goff’s vein-popping speeches where his forehead goes p-pump p-pump p-pump and he goes all red he said: “This Government should realise this is a priority I’ve said to this Government time and time again that this is a priority and it should be doing something about it and I know why it should be doing something about it—because everyone says it should.” That is what Phil Goff said but it has taken him 4 years even to have this bill passed. He stood up in the House—it is the “Maharey principle”; it is one of the things one says when one is in Opposition and does not say when one is in Government—and said that this bill was priority legislation that would be fast-tracked by Labour. I remember that because I was sitting in that chair there when he gave one of his vein-popping speeches about how he would act. Mr Goff has lost interest in the justice portfolio. It takes him so long to do anything. 
I heard his comments about the Court of Appeal—as though we should be embarrassed that the Court of Appeal thinks Parliament is taking a view on criminal offending! If he wants to quote the Court of Appeal I will table the opinions of District Court judge after District Court judge and High Court judge after High Court judge who have criticised his pathetic sentencing and parole legislation. High Court judge after High Court judge has criticised his bill. He can give whatever vein-popping speeches he wants to give; the fact is he is embarrassed about how long it has taken him to get this bill here. This is the guy who stood up in Parliament in 1999 and criticised the Government for taking too long. He is so embarrassed about it that he interjected that we had had 40 years to do something and had not done anything. I am not even 40 and the fact is this Minister—[ 
Interruption 
] I know I have got that gravitas that may make members think I am older. 
The fact is this Minister has been pathetic. It takes him so long to do anything. What about this legislation? In January 2000 Phil Goff said that he would pass legislation to remove sex discrimination in the law with regard to women dealing with children. Six months later he said he would have it passed by Christmas 2000. Then in January 2001 he said he would have it passed by Christmas 2001. Then in election year he said he would have it passed by Christmas 2002. When Mr Peter Dunne raises the issue what does Mr Goff say? He says: “We’ve had a meeting with Mr Peter Dunne and we agree and we’re going to pass that legislation by Christmas.” So we have had four Christmases and he still has not passed the legislation. He takes far too long to do anything. 
The fact is the Minister has lost interest in the justice portfolio and this bill shows that. The Minister has made no substantive amendments to what was proposed when I introduced this bill 4 years ago. 
Stephen Franks 
: Except killing home invasion. 
Hon TONY RYALL 
: I have to say just while we are talking about that sentencing bill that I understand that the Minister’s officials advised him that amendments should be made to the Act but Mr Goff is too embarrassed to bring them to the House. My understanding is that he said he could not do that and he wanted to give it a while to settle down. So let us get real about how long it takes Mr Goff to do anything. It takes him far too long. There is urgent stuff that needs to be done. It has taken him 4 years to bring to this point a bill the serious content of which he has hardly changed; he has hardly changed any of the matters in it that are important. I remember his comrade Mr Swain standing up in front of the computer security industry at a meeting in Auckland in 1999 and saying that this was vitally important legislation as well. He agreed with Mr Goff that it should be passed as a matter of priority. Well if it takes the Government 4 years to pass as a matter of priority a bill that it has hardly changed then that is an embarrassment. 
For goodness’ sake the Government should work more intensely with the Opposition parties and we will tidy up foolish proposals that this Government brings in as bills. We will fix them up and we will get them passed. And they are foolish. This Government has passed a law that someone sentenced to prison for 9 years can qualify for parole in 3 years. An offender sentenced to 9 years’ imprisonment for serious sexual offending for rape can be out in 3 years. That is what this Government is doing to the justice system in New Zealand. 
This is a Government that time and time again says it is going to get tough on crims. What is the record? The propensity to imprison is dropping because the sentencing law requires the judges to use sentencing as the very last possible option. The judges are to give crims everything else but they are not to send them to jail. They can be very serious offenders but the judges should not send them to jail. That is what this Government is doing. That is what it supports. 
This Government has overseen the complete collapse of the credibility of the home detention scheme. An Associate Minister of Justice stood up and praised his department for being robust in running home detention but these are the very same people who recommended that a wife-basher go on home detention in the home of the woman he bashed. The department said that she agreed to it. Well of course she is going to agree; for her it is a case of whether she is bashed again now or bashed later. That is what this Government does. It has overseen wife-bashers being detained in the homes of the very women they bashed. We have a woman Prime Minister. She lets that happen. She lets her Ministers stand up and say that is robust. That is not the sort of legislation or approach that we on this side of the House want to see. 
This Government is not taking seriously crime in this country. We have violent crime at record levels on the basis of per head of population and on a total basis. The Minister should be embarrassed by that. There is record crime in this country. We have more car burglary than we have had for years and it is getting worse. We have more serious sexual crimes than we have had before and it is getting worse. Auckland is now one of the most crime-ridden cities in the Pacific. People are leaving Auckland because they are worried about the level of crime there. What does this Government propose? Nothing absolutely nothing! The Commissioner of Police said he needed 170 extra police in Auckland. How many did he get? He got 50 over 4 years. That is not the sort of approach we need to law and order in this country. Crime is going up. This Government has no respect for the victims. 
LYNNE PILLAY (NZ Labour—Waitakere) 
: 
 This is a common-sense bill from a common-sense Minister and a common-sense Government. I commend it to the House. 
RON MARK (NZ First) 
: 
 My question to the member who just sat down is what is the title of this bill? She does not know. It is a shocker is it not? This Government is so keen to drive through this very important legislation but puts up speakers who do not even know the title of the bill. All the rest of those members are so keen so devoted and so dedicated towards passing— 
Jill Pettis 
: She won her seat. 
RON MARK 
: There goes the parrot. Who let this green parrot into the House? Can anyone hear it? She is squawking over there on the sidelines but at least she has made a contribution. I do not know whether the  
Hansard 
 writers will be able to write “Screech!” but at least the member is in  
Hansard 
. Those Labour Party members seem to be holding a coffee session on their benches this morning. They are sitting around screeching and reading every other piece of paper except anything that has to with the legislation before the House. I watched them having a little bit of a huddle over there. I do not know whether they were organising the next knitting competition or what. For the benefit of those members who do not know the Labour Government is currently considering the Crimes Amendment Bill (No 6) and Supplementary Order Paper 85. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Can I remind the members on my right of Speaker’s ruling 51/5(3) which states that running commentaries are out of order. If members wish to make a speech they can—later on. [ 
Interruption 
] Members are getting close to being disorderly. 
RON MARK 
: It is very disorderly. I seem to have hurt Labour members terribly this morning. If the bill were not dealing with such a serious matter we could spend the whole morning heckling and debating with those members. But this is a serious bill and that is why New Zealand First supports it. 
We hear the Government telling everybody what a wonderful job it is doing in putting the bill through given that it came to the House in 1999. It is interesting to look at the select committee’s report back. The bill was referred to the Justice and Law Reform Committee on 5 October 1999 and submissions closed on 3 March 2000. The hearing of evidence took 5 hours and 30 minutes and consideration 9 hours and 7 minutes. That is 14 hours and 37 minutes of work by the select committee but it has taken this Government 4 years to get the bill back to the House. What does that say? It says a lot about disorganisation. Regretfully it probably says a lot about a lack of commitment to the serious issue of law and order in this country. There were 16 oral submissions and 27 written submissions and 14-odd hours of work by the select committee and the Government takes 4 years to get to this point. 
I acknowledge the work of Mr Keith Locke. Is that not a surprise? Ron Mark would probably be described by many as right of Attila the Hun and one who feels that Attila the Hun was a poor student but I compliment Keith Locke. Some serious issues were canvassed in this bill and they all pertained to privacy. I look at the types of people who operate in transnational crime organised crime and terrorism—drug-runners gun-runners and those sorts of people—and I consider them to be dangerous lowlifes. One has only to consider September 11 and everything that has happened from then on to realise how much more focused we need to be on countering terrorism. There are those of us who will look for what might be considered very draconian legislation in order to protect ourselves and our communities but there is always a balance to be struck and that balance revolves around privacy and the protection of people’s rights. Throughout the 14 hours we heard evidence on this bill Mr Locke was always consistently concerned about—[ 
Interruption 
] 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Would members please be seated. 
RON MARK 
: They are quite shocking are they not? That is the Labour Party being called to order. Its members are so rude. 
Mr Locke consistently worked hard to make sure that the legislation was as balanced as possible. I oppose some of the things he said but this morning he brought to this House an amendment that read: “312R Ombudsman to audit.” All Mr Locke wanted was for the ombudsman to conduct an annual audit of all telecommunications interceptions carried out by the police in the previous year. Being the sort of guy who for obvious reasons would welcome police interceptions I could not disagree with that. The people who surprised and stunned me were United Future Jim Anderton and Matt Robson—the paragon of virtue when it comes to human rights. Matt Robson and Jim Anderton campaign the whole of their lifetimes about protecting the rights of citizens so how could they possibly object to the ombudsman in secret in private without public disclosure doing an annual audit to ensure that the interceptions done by the police had been done lawfully? How can United Future members sit there and vote against such a simple request—a simple little mechanism to ensure that the democratic rights of people not to have their privacy invaded is in some measure audited? How can United Future vote against Mr Locke’s amendment or how can Matt Robson? How can people on the Labour benches who have campaigned for years on human rights and privacy issues vote against that? 
Judy Turner 
: You voted for it. 
RON MARK 
: Yes Judy Turner. New Zealand First voted for it—so did ACT so did National. I am appalled but once again I say that it is another silver bullet in my gunbelt because come the election I will certainly be reminding everybody on the hustings. [ 
Interruption 
]—There goes the parrot Jill Pettis. Will someone let the parrot out of its cage? Crikey heck! I do not want to hear any more speeches from Labour Party people about protecting the rights and privacy of ordinary citizens because there would be a word that I cannot use in this House but will use on the hustings and we all know what that word is. Members should not preach to me about their concerns when they do not support a simple amendment like Mr Locke’s. Mr Locke did some very good work. I do not agree with everything he says but it is important to have a voice in the House that is consistent about such issues. 
I want to talk about my concerns about terrorism and drug-running and particularly about the importance of such legislation when we are dealing with methamphetamines. This legislation is about dealing with organised crime and transnational crime which are impacting on our shores every day. I have to agree with Tony Ryall when he says that we can measure people’s commitment to legislation and to law enforcement by their actions not by their words. This Government’s actions in respect of tidying up the holes in the Sentencing Act and the Parole Act—for example deferred sentencing—is appalling. It took New Zealand First to expose the shortfalls in deferred sentencing by which a person who is sent to jail for having bashed someone is then let out on to the streets pending a home detention application. 
We now find that there are also holes—Labour calls them back-end detentions but I do not know what the hell that means—whereby individuals have killed with a motor vehicle raped a woman under 16 bashed people and been charged with grievous bodily harm threatened to kill and tried to kill two policemen and this Government through its Sentencing Act and Parole Act is now letting those people out on home detention. We now find that they are going to the gym going shopping going to watch the Crusaders going out to meet their friends and participating in the community. More important they are using their telephones to do their unlawful business because their telephones are not monitored. This bill will hopefully give the police some teeth to monitor more closely the telephone calls of people enjoying home detention who have proven to be violent criminals and people associated with gangs and organised crime. It is about time that this Government got off its lazy butt and started amending the Sentencing Act and the Parole Act as we all know it needs to do. 
MITA RIRINUI (NZ Labour—Waiariki) 
: 
 I do not think that my speech will be longer than your pronunciation of my name. 
Lindsay Tisch 
: I like your hairstyle. 
MITA RIRINUI 
: There is a gentleman over there who is giving me hand signals. Naturally I speak in support of this bill. I congratulate the Minister and the Government on introducing long-awaited measures for dealing with property crime in terms of technology. 
KEITH LOCKE (Green) 
: 
 The Greens will be voting against this bill because although it has many good provisions in it at the same time it seriously undermines our civil liberties by giving the police the Security Intelligence Service and the Government Communications Security Bureau the right to intercept our emails and hack into our computers without our even knowing that they have been there. 
In the Committee stage I put forward an amendment to give effect to a concern of the Privacy Commissioner. He could not see the need to allow the police hacking powers when they can already look at the contents of a computer while searching premises under warrant. That amendment failed. I moved other amendments in the Committee stage to try to make the interception process a little more accountable and transparent. I took up the Privacy Commissioner’s suggestion that we have a person to audit electronic interceptions as they do in Australia in the person of the federal ombudsman. That amendment failed. I moved another amendment to get the police to report on the average duration of interceptions as the Security Intelligence Service currently does. That amendment failed. I moved another amendment to have subjects of interceptions notified by the police when there were no longer active investigations into them and charges had not been laid. That is the sort of notification conducted by the Federal Bureau of Investigation in the United States. That amendment failed. 
In this third reading I now want to concentrate on the dangers of allowing intelligence services to intercept our emails or hack into our computers. The debate over the failure of the United States to find weapons of mass destruction in Iraq is a good case study. Members will remember how the US Secretary of State Colin Powell got up in the UN Security Council and provided information from alleged intelligence intercepts about how the Iraqis had weapons of mass destruction. There were all these intelligence photographs of mobile laboratories and intelligence information about the link between Saddam Hussein and al-Qaeda and the British had their own forged documents from the State of Niger about supposed components for an Iraqi nuclear capacity being smuggled into Iraq. All the allegations turned out to be barefaced lies but for a while many people believed Powell Bush and Blair. 
One of the fundamental problems with the United States and British intelligence agencies is that they are serving political masters and political agendas. Because those agencies operate without any real public accountability it is hard to stop the intelligence from them being distorted to serve political agendas. We saw that in the Nixon White House and we see it in the Bush White House today. Under Nixon and earlier Presidents all sorts of dissenters from Martin Luther King to anti-war leaders were spied on by intelligence agencies so I do not think that we should give the New Zealand intelligence agencies such intrusive powers as exist in the bill in a light manner. We might say that our intelligence services are not like those in the United States and nor would our politicians misuse intelligence in that way. Even if we hold that we currently have a better bunch of politicians laws have to be written to constrain the most manipulative anti-democratic governments that we might get in the future. In that respect New Zealanders sometimes refer back to the Muldoon Government. 
But there is a second important factor and that is that our intelligence services are closely linked with those of the United States. The main interception facility of our Government Communications Security Bureau is the Waihopai satellite communications interception station near Blenheim. It pulls down millions of phone email and fax communications going through to international communications satellites located over the Pacific equator. The main destination for the information collected from Waihopai and from similar stations in Australia Canada Britain and the United States is the US National Security Agency headquarters and it will often be used for purposes that most New Zealanders would not like—if they knew of them. Occasionally we get a glimpse of that misuse such as during an incident a few months back when a section head of the US National Security Agency Frank Koza issued a memo to his security people asking them to “mount a surge” of interceptions against wavering nations on the UN Security Council to work out what he called their “dependencies”. I presume that meant how those nations could most effectively be bribed. 
The other problem is that our intelligence services rely to a large extent on information provided by US and British intelligence services. That is certainly true in Bush’s so-called war against terrorism which is resulting in many innocent parties getting caught up and certainly in ethnic and religious groups being targeted and harassed. I want to show how that US influence on our intelligence services takes place here in New Zealand with an example from our Sri Lankan Tamil community. This community was very worried last year about the Terrorism Suppression Act and organised big public meetings against it. Their fear is based on the fact that the American Government has designated the Tamil Tigers the main organisation of Tamils in Sri Lanka a terrorist organisation. Of course there has been a tragic civil war in Sri Lanka with both sides guilty of inexcusable military actions against civilians which we would all condemn. However Amnesty International reports show clearly that the Sri Lankan Government is responsible for the great majority of the atrocities committed against civilians yet the Sri Lankan Government was not designated a terrorist organisation by the American Government—only the Tamil Tigers were. 
That bias is unfortunate because a successful peace process between the Government and the Tamil Tigers is now under way in Sri Lanka. The Bush administration has seriously undermined that peace process by for example denying Tamil Tiger representatives the right to attend an international donors conference held in the United States in the aftermath of the civil war. That created a big hiccup in the peace process. Thankfully the New Zealand Government has not followed the British and Australian example in imitating the United States and designating the Tamil Tigers a terrorist organisation—an act that could criminalise much of the Tamil community in New Zealand because they overwhelmingly support the Tamil Tigers as the main force in what they see as their national struggle back home. 
But the New Zealand Security Intelligence Service is still implementing the United States submissions and agendas against the Tamil community here despite the fact that this community is the most law-abiding one could find. Last Friday a Security Intelligence Service officer visited an organiser of a big public meeting supporting the peace process in Sri Lanka which was to be held the next day and asked all sorts of intrusive questions about Tamil organisations. I attended and spoke at that meeting alongside a Minister of this Government and another MP. It is inexcusable that this sort of intervention is taking place with the Security Intelligence Service harassing a community in our country on a US-inspired agenda. 
I have another example that shows why we should be against giving these intrusive powers to the Security Intelligence Service and having such a link-up with foreign intelligence agencies. An asylum seeker in Paremoremo prison is currently trying to win an appeal to the Refugee Status Appeals Authority but the Security Intelligence Service has put into effect a security risk certificate that means that even if he wins in the legal sense he will still be deported. The service is basing its case on secret intelligence information—presumably information from foreign intelligence agencies be they in America France or Algeria which are very biased against the political organisation he is from. He was an elected MP in Algeria back in 1990. Again it is a case of the Security Intelligence Service implementing a political agenda from overseas. 
We have other cases. I get complaints from Muslim people in New Zealand that mosques are being visited by the Security Intelligence Service and they feel intimidated by that. They say they do not want to put their heads up too much and do not want to involve themselves in New Zealand politics too much. 
STEVE CHADWICK (NZ Labour—Rotorua) 
: 
 I am pleased to support the Crimes Amendment Bill (No 6). I was really interested to hear the Hon Tony Ryall raging about how long it has taken for the bill to come to the House. We are facing issues about world security and powers of interception and the bill has provisions about computer technology and new techniques that we needed to consider for inclusion. It is absolutely timely that the bill has come before the House today and I am pleased to support it. 
STEPHEN FRANKS (ACT NZ) 
: 
 I am glad to have the opportunity to speak in this third reading the final debate on the Crimes Amendment Bill (No 6) which was introduced by the then National Government in 1999. It was introduced as No. 6 out of I understand 10 or 11 bills on criminal matters introduced that year by the National Minister the Hon Tony Ryall and the bill reflects that. We only just removed from this bill about half an hour ago the provisions that reflected the great debate in 1999 on home invasion. So sitting here in front of us today we have had a whole series of amendments required to take out references to home invasion from parts of the Crimes Act where they have been sitting for a number of years. 
Mr Goff began his speech commending himself for finally getting this bill through by gloating over the removal of the home invasion provisions. What were his reasons? According to him people all over the country had criticised them. What were their criticisms? They were that they had been politically inspired. He told us proudly that the Court of Appeal had criticised the home invasion provisions and criticised Parliament for putting them in. I think that that says a lot about the agenda this Government has been running in the area of crime. 
It says an awful lot that he should think the people of New Zealand will be glad to hear that about politicians who responded to the concern about serious violent crime which has more than quadrupled in the time I have been a lawyer—that people should think it was wrong for politicians to respond to that and to pass a law that had such widespread public demand. For the Minister to think that anyone outside the tight little circles and cabals of politically correct feminists and other academics that he moves in will be glad to hear that we have responded to the— 
Hon Paul Swain 
: What’s this? As opposed to your 3.2 percent? 
STEPHEN FRANKS 
: Minister Swain has arrived. That is handy because we will have a few comments about Minister Swain later as well. We will be commenting on the enormous amount of action that he has involved himself in in his corrections portfolio and the answers he has been able to give to the concerns of people who are quite rightly asking why he is letting out convicted paedophiles rapists and robbers into their communities hiding them in their communities without any warning or without even letting people know when they ask who is coming to live next door. Mr Swain watches the news and he buries his head in the newspaper but he will not be burying his head in the newspaper deep enough when people finally get to the bottom of what his department has been doing to hide criminals amongst innocent people. 
But let me get back to the speech from Mr Goff. He told us in withering tones that the Court of Appeal had complained that the home invasion law was political. Of course it is political. What does he want—a court that stands above the requirement of representative democracy? Does he like law being made by judges who cannot be removed by the people when they are sick of a lack of response to legitimate concern about where crime and justice have got to in this country? Is it a recipe for good law to respond to those who despise democracy and who regard the word “political” as the ultimate insult? That is the sense of what we got from Mr Goff’s speech welcoming his own inaction for 4 years on the Crimes Amendment Bill (No 6). 
What does this bill do? As we heard from the Labour member who interjected earlier this bill does not address anything that was not raised by a Government 4 years ago. It does bring up to date a few provisions that can now reflect the most current forms of computer crime but if we were to wait until we knew all about computer crime before passing legislation it would never be passed. Computer crime will evolve. It was quite proper to bring this law in. It should have been passed 4 years ago and it should have annual attention if necessary to bring it up to date instead of the Government using as a justification for it having done nothing for 4 years the fact that computer crime is fast moving. 
 The bill delaying of the bill was criticised. But the delay was justified by Mrs Steve Chadwick on the grounds that it deals with very serious topics. Just so Mrs Chadwick—the entire area of property crime is updated in this bill. I can only surmise that the Government actually put it aside from a resurgence of that old ideological hostility to property. Government members look at the bills on the plate that they inherit when they become the Government go through the list and say: “Here is one that is all to do with property; let’s drop it.” It has probably taken the Ministers 3 or 4 years to realise that burglary and property crimes are among the best indicators of the likelihood of other forms of offending that in fact we get a better prediction of the risk of violence from offenders by looking at their burglary record than by looking at their violence or sex-crime record strangely enough. 
The Minister who tried to justify the delay in pushing this bill along had a complete own goal in getting Mrs Chadwick to get up and commend the Government for having delayed getting it right when property crime should have been amongst the Government’s highest priorities. If Government members really want to tackle violent crime they should go first to the precursor crimes the crimes that accustom young people to thinking that the law does not mean what it says—the crimes that accustom young people to feeling that penalties do not mean anything the crimes that accustom young people to feeling that other people’s space and other people’s castles are their own. 
I also want to have a quick look at just what this law does in relation to the other priorities this Government has had. We now have a maximum sentence of 7 years for reckless damage to a computer 5 years for taking trade secrets and 2 years for hacking. Let us compare that with some of the other offences. Changing it would have caused too much uproar I guess but without changing it we have blackmail at 14 years. Blackmail can be simply disclosing something about a person to cause him or her to act in accordance with the will of the person making the threat. What is wrong with saying: “You’ve been lying to me and unless you resign I will have to report you to the police. Go and don’t come back.”? Why should that justify a 14-year sentence when reckless damage gets only 7 years or taking a trade secret—it could be the genetic code to kiwifruit—gets only 5 years? 
The bill actually maintains a lie. It states that these maximum sentences are 7 years when the public and the court know that 7 years actually converts to 2 years 4 months unless a non-parole period is set. Five years converts to 1 year 8 months unless a non-parole period is set. Two years automatically converts to 1 year and there is nothing the court can do about that. Anything under 2 years means 1 year or half the period of the sentence and the court has no power to set a non-parole period. So the Crimes Amendment Bill (No 6) is fraudulent and deceptive on its face. 
If the Minister had been truly wanting to deal with priorities in crime he would have been dealing with the series of promises he has made in relation to the Sentencing Act and the Parole Act to deal with what he likes to call loopholes and unintended gaps that are actually a reflection of the Government’s deliberate policy to treat criminals as victims of the class struggle and as unhappy products of a cruel upbringing and not responsible for their actions. He would have whipped through the bill that had been done by National. It would not have sat for 4 years. The Government would not have put the Prostitution Reform Bill in a higher place or the Local Government Reform Bill which set up racial constituencies for local authorities in a higher place. Of course the Government would think that that had far higher priority than a bill to amend crime. I am glad to be able to support this bill to a conclusion; I am just sorry that it has taken so long. 
MARK PECK (NZ Labour—Invercargill) 
: 
 Why let the facts get in the way of a good story right? That is the best thing that can be said about that speech. 
Hon Paul Swain 
: What about 3.2 percent? 
MARK PECK 
: Or 3.2 percent and things like that. This bill is intended to modernise and update penalties for property offences. I notice that the leader and the deputy leader of the Opposition—who is colloquially known as “Mr Bouncer”—were sitting in the back row of the Chamber worrying about their own property offences that are going on at this particular point in time. I hope the numbers stack up for them because not many other people in this House will. I support the bill. 
Hon GEORGINA TE HEUHEU (NZ National) 
: 
 I am pleased to take a call on the third reading of the bill. I address my remarks to the general background and the environment in which the bill was introduced. I do want to comment on the Hon Phil Goff the Minister of Justice. I think we should be very grateful indeed that he found time to come to the House in between flying between international destinations to introduce the third reading. I just do not know how the Minister does it. He so busy in his foreign affairs portfolio: holding hands with foreign leaders with Yasser Arafat. My goodness is that not such a wonderful thing for him! It just underscores his burning ambition to be the leader. I guess he thinks that making more visits and holding more hands will eventually get him there. 
He is absolutely mistaken is he not! Because he is not even allowed to run his own portfolio. Instead it is done by that person whom we shall not name but we know who she is. She has her nose and her hands in every portfolio and she certainly has her hands in this one. The Minister of Justice the Minister of Foreign Affairs and Trade is reduced to making trips all over the world looking busy holding hands with foreign dignitaries pretending he is— 
Hon Tony Ryall 
: Who with? 
Hon GEORGINA TE HEUHEU 
: Who? One might think that maybe he would go and hold Bush’s hand maybe he would go and hold Tony Blair’s hand. But no he went and held the hand of Yasser Arafat. My goodness did not our country’s reputation soar when he did that! As I say I am amazed that he has the time to come into the House and attend to the unimportant justice portfolio. That is the way he treats the issue of crime and the real concerns of New Zealanders. As I say he has this other big job to do—being seen on all the international stages because he has a burning desire to be the leader. No doubt having made his speech he is now on his way to some other foreign destination to find some other hand to hold. 
Lindsay Tisch 
: Pyongyang. 
Hon GEORGINA TE HEUHEU 
: We will see. We await the photographs in the papers and the image on television—on CNN. We wait in anticipation to see whose hand he will hold next. We really do need our reputation enhanced some more! 
Having said all that I want to say that National supports the bill. It covers issues of absolute importance to New Zealand and to New Zealanders. I was quite amazed at Steve Chadwick the member for Rotorua thinking that she had to stand up and try to find an excuse as to why the bill has taken 4 years to wend its way through the process. She babbled on about advances in computer technology and that we had to wait and see what those were so that the law could be drafted accordingly. What a load of crock! What a load of hogwash quite frankly. 
The Minister made excuses about why the bill has taken 4 years to reach this stage but the public should be aware that the bill we will pass into law today is no great advance on the bill that was already there which was introduced by my eminent colleague the Hon Tony Ryall who was a very good Minister of Justice when we were in power. He reacted very swiftly to issues. He was on top of his job and gave the justice portfolio the due focus that it requires. The provisions contained in the bill today were introduced by Tony Ryall 4 years ago. The Minister came down to the House and made some lame excuse for why it has taken so long. 
 He was followed up by the member for Rotorua Steve Chadwick making some more lame excuses as to why it has taken so long but it will not wash. They might think they can use those excuses in this forum but those sorts of excuses do not wash out in the real land where New Zealanders live. 
The whole thing is symbolised in a  
Dominion Post  
byline from earlier this year that states: “Hacking bill gets dusted off”. It has been sitting there for 4 years gathering dust. Phil Goff comes down to the Chamber and pretends he had a good reason for it sitting around but he did not. 
I also comment on something I find to be a real anomaly with the Government. It talks the talk but does not walk the walk. It is interesting is it not that a number of women in the Labour Government are prepared to stand up and support the Minister and pretend that he is doing a great job in that area yet they do that against a background of this Government allowing paedophiles and rapists out into the community to rape abuse and violate women and children. Those women just sit there and let it happen. That is an indictment on the women in the Government who sit there and let that happen. They yell out across the Chamber and try to make negative aspersions about us when we were in Government yet they sit there in 2003 and let these awful awful people back out on to the street. 
There is also the issue around the cervical-screening proposals. Not a lot has been done on that. This Government has a significant number of women who sit there and pretend that they are walking the talk. They are not. It is a scandal when they come down to the Chamber to support a Minister of Justice who is not addressing that area in any comprehensive way at all and who probably cannot address it because he is so busy travelling overseas. In any event if he cannot address the issue they should be advocating on behalf of women and children in this country. But do we hear them doing that? No. The most that we see them do is to come down the House rise to their feet and say: “I support this bill. It is a good bill.” and sit down. In the meantime paedophiles and rapists are out in the community doing what they do best because raping abusing and violating women and children is all they know. The women in the Government should be ashamed of themselves. 
The environment in which we live requires that we address those matters seriously in a considered way and in a timely fashion. The passage of this bill into law today does not have any of those features. But the substance of it is serious and that is why the National Party supports it. 
JILL PETTIS (NZ Labour—Whanganui) 
: 
 That was a tragic speech and I do not use the word lightly from a tragic party that sat there for 9 long years and did very little—I am being generous by saying very little—did nothing to address the causes of crime in this country. In fact its legislation increased the incidence of crime. There are those of us on this side of the House who make the connection between social policy and what happens in the criminal world. I remind that member that she stuck her hand up for the introduction of market rents for the poorest group in society in this country. That was punishing the poor for being poor. That member has had the privilege of leading a very privileged life. That member has never had to grub around looking for bread to put on her table— 
Hon Georgina te Heuheu 
: I raise a point of order Mr Speaker. That is an aspersion against me and my family of whom the speaker has no knowledge whatsoever. I ask you to ask her to withdraw and apologise. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The member has taken offence at a personal reflection under Standing Order 117. The member will now stand withdraw and apologise. 
JILL PETTIS 
: I will withdraw and apologise. Every person in this House is privileged. I am a privileged member of society. As a child I led a privileged life because I have a wonderful mother. That is a privilege. If that member does not think that that is a privilege I pity her judgment on the important things in life. I might have lived on the poor side of town in a State house but I am still very privileged because I had a strong and resourceful mother. That is privilege. 
Lindsay Tisch 
: I raise a point of order Mr Speaker. We are straying very much off the bill and the debate is getting personal. We support this bill and I would have thought that the Government member would be saying something to support her own Government bill and to stay on the topic so it can be expedited. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Thank you very much. Can the member come to the point please. 
JILL PETTIS 
: The first few comments are always in rebuttal just as the previous member strayed from the topic and spoke about Mr Goff shaking hands with Mr Arafat. I do not know what that has to do with the Crimes Amendment Bill (No 6). I say that I am proud of what this Government has done to address the causes of crime in this country. New Zealand is one of the few countries that does not have legislation about computer offences with particular reference to this type of legislation. This Government is addressing the inadequacies of the previous Government and I am proud to support this bill. 
A party vote was called for on the question  
That the Crimes Amendment Bill (No 6) be now read a third time. 
Ayes 107 
Labour 52; New Zealand National 26; New Zealand First 13; ACT New Zealand 8; United Future 8. 
Noes 8 
Green Party 8. 
Bill read a third time. 
Wool Industry Restructuring Bill 
Second Reading 
Hon DAMIEN O'CONNOR (Associate Minister of Agriculture) 
 on behalf of the 
 Minister of Agriculture 
: I move  
That the Wool Industry Restructuring Bill be now read a second time 
. The Wool Industry Restructuring Bill was introduced to the House on 11 December 2002. It had its first reading on 19 March 2003 after which it was referred to the Primary Production Committee for consideration. The committee received and considered 33 written submissions on the bill. 
This bill facilitates the regulatory and structural reform of the wool industry. It provides for the dissolution of the statutory New Zealand Wool Board and the allocation of its assets among woolgrowers. That will enable a greater separation of commercial and industry-good activities and will give growers greater control of their industry organisations. Growers will be allocated shares in the commercial entities and the industry is separately working to seek grower approval for a levy to fund industry-good activities under a new organisation. 
 The bill provides for the conversion of the Wool Board into the Wool Board Disestablishment Co. The disestablishment company which will be known as “Disco” to the trendy wool industry will be responsible for dealing with the residual liabilities and commitments of the board and for implementing a restructuring plan including the allocation of board assets to growers. The disestablishment company will also be responsible for the collection of an interim levy on wool and its expenditure for industry-good purposes after consultation with SheepCo or a successor body established to undertake wool industry-good activities. The restructuring plan will specify that portions of the board’s assets will be allocated to merino growers through Merino Grower Investments Ltd and to another company Wool Equities Ltd for growers of non-merino sheep. 
The bill contains provisions concerning the constitutions of the two grower companies Wool Equities Ltd and Merino Grower Investments Ltd. Those provisions relate to restrictions on share trading during the first 2 years which were agreed to by growers in the May 2002 referendum and to voting rights which will provide added security for grower assets. The bill provides for a grower’s share entitlement to be based on either the average number of sheep the grower has farmed as at 30 June 2000 2001 or 2002 taken over the years that the grower had sheep or the number farmed at 30 June 2002 whichever is the greater. That ensures that growers who have progressively increased their sheep numbers over the 3 years are not disadvantaged compared with those who have recently entered the industry. 
The Government will be introducing a Supplementary Order Paper to make minor technical amendments to two clauses. The Supplementary Order Paper will amend clauses 20B(2)b and 20C(2)b. Those clauses deal with the allocation of shares to growers and the changes will ensure that such allocations are fairly made to growers who have both merino and non-merino sheep. Growers of sheep other than merino sheep will have the opportunity to cash in their redeemable preference shares or to convert them to ordinary shares in Wool Equities Ltd. Because Merino Grower Investments Ltd considers it has sufficient capital the disestablishment company will redeem the redeemable preference shares and merino growers will be paid the appropriate amounts. 
The Minister of Agriculture must approve the restructuring plan including the plans for share allocation before its implementation can commence. The Wool Board’s preferred restructuring day is the first day of September 2003. That date if met would enable share allocations to be made to growers by the end of this year. To that end the board is working towards having its restructuring plan ready for submission to me later this month. Wool Equities Ltd and Merino Grower Investments Ltd are respectively aiming to have a prospectus and information memorandum ready to be distributed to growers with a notice of their entitlements shortly after the restructuring day. 
Minister Sutton and I would like to thank the members of the Primary Production Committee for their consideration of the bill and for the report tabled on 16 June 2003. I commend this bill to the House. 
Hon BILL ENGLISH (Leader of the Opposition) 
: 
 I rise to welcome this legislation to the House even if it has taken a long time to get here. In the rural community this legislation is a further signal of the massive change that has gone on—a change in attitudes in farming practice and in the way that people see the path to a successful future. 
It has been a long hard road to get this legislation here to the House. In 1991 as a brand new MP I can recall going to a large farmer meeting in Gore to discuss the hugely controversial decision made by the Wool Board then to withdraw its price support scheme. It is not so very long ago that the New Zealanders who produced wool were tied up in price support schemes. At that stage the board also made controversial decisions like cutting back the contribution to the International Wool Secretariat. To my mind as a long-suffering levy payer to the Wool Board the contribution to the International Wool Secretariat really summed up the problems that needed to be solved in the Wool Board. In 1990 the Wool Board donated $90 million of farmers’ money to the International Wool Secretariat—a contribution that it stoutly defended—but under pressure it was suddenly able to cut that in half and still argue that it was about the right amount. 
So the Wool Board is a relic of a bygone age. It came from a time when the statutory boards were the on-ramp to the protein highway to Britain. They were convenient Government structures that were able to organise the flow of product to the British market. But unfortunately that market became unhitched from New Zealand some 30 years ago and it is only today that we are finally putting the board out of its misery now that its functions have long since ceased to be useful. 
The rural community has changed dramatically and this bill is a sign of that. In particular the attitudes of today’s producers have changed. It used to be the peak of a farmer’s achievement to become a member of the electoral college which was the body that decided on who would become members of the Wool Board. There was a very clear career path and many of the more competent more skilled and certainly more articulate farmers went down that path. They started out by becoming the chairperson of the local meat and wool section of Federated Farmers then gradually worked themselves up the tree and if they were elected to the Wool Board itself they were then entitled to trips around the world to talk to the board’s customers. The Wool Board had salubrious headquarters here in Wellington. Its members talked to the Minister of Agriculture and to all sorts of important and official people and the main function of the board was to maintain its political viability. 
In that respect the board let farmers down. I can still remember receiving the receipts for the wool that I was selling and looking at the line that deducted 6 percent of the gross income. For many years that exceeded the profits that most sheep farmers in Southland would make. I am pleased to see that over the decade of the 1990s wool producers came to realise that the board was essentially a political body not a commercial one and that any organisation that has a guaranteed statutorily declared income like the Wool Board levy is bound to become lazy and unfocused and is bound to spend much of that resource on the maintenance of its own political viability. I can remember the Wool Board running a campaign about $5 a kilogram and 5 kilograms of wool on every sheep and it sounded great. It was a public relations idea and the board members went around the country whipping up the enthusiasm of farmers. Within 2 years the price was about half that because it had dropped precipitously. The Wool Board needs to be more than restructured and in some respects this bill is misnamed because it abolishes the Wool Board. I am very pleased to be able to stand in this House and to see that happen. 
I want to pay a tribute to the leadership of the farming community which has finally brought this bill to this House and which will bring about the ultimate dismantling of the Wool Board. I will mention two people in particular—Geoff Grant and Mike Petersen. Those people represent a new generation of farmer politicians who understand that their main function is to bring about change not to maintain the status quo because markets and farming practice change so quickly. Therefore the organisations that are the conduit between the farmer and the market need to change very quickly. Of course the Wool Board because of the statutory protection it was given by this Parliament for so many years did not change quickly. The changes it went through were very painful slow and expensive. However in the future we will have no cause to have to spend parliamentary time as we have done a lot over the last decade on trying to adapt that out-of-date organisation to contemporary pressures and times. 
The Wool Board did some good things and I see that this bill makes the attempt to preserve the desirable aspects of what was there. I want to refer to a couple of organisations that are important to the industry but that need to be subject to commercial pressures rather than to political sponsorship. The first is Wool Services International. The wool industry is one that has a continuous need for higher and higher levels of understanding of the product and of the market requirements for that product. Various organisations have contributed to technology transfer in order to increase the skills and knowledge of the industry about the product that it produces. 
I also want to refer to the Wool Research Organisation of New Zealand. It has been typical of many publicly funded science organisations and the Wool Board levy has been virtually equivalent to public funding. The Wool Research Organisation has done some excellent science. It has also chewed up millions and millions of dollars on projects of dubious merit and in the end there has been no real test by the industry or by the market of the activities of that organisation. However the intellectual capital that is there in the form of some outstanding people and some excellent ideas can be carried over into the new environment. We want to make sure that that is the case. 
I am pleased to see that there has been a very vigorous discussion about the issue of what amounts to public good in the wool industry. A feature of that discussion has been the role of research. In the past the agricultural industry has relied far too much on the Government and on levies to fund its research. It is my hope that the wool industry will follow the path that the meat industry is starting to follow without the automatic funding of the levies and without relying totally on Government funding for all aspects of research. I hope that the industry will take on some of that role itself and will take responsibility for long-term investment and research in order to get a better understanding of the enormous potential of the protein-based products that we produce so effectively and so cheaply and that it will take some of the risks that go with investments that use biotechnology to increase returns. 
We stand four-square behind this bill. I know there will be debate about the detail but it is long past time that the Wool Board was dismantled and the industry was able to get on with its own future subject to the pressures of the world market and the strong incentives that that puts on participants in the industry to do a good job for New Zealand as well as for the sake of their own profits. 
R DOUG WOOLERTON (NZ First) 
: 
 New Zealand First supports the abolition of the Wool Board which is really what this bill is about as the leader of the National Party has just said. However we will introduce amendments in the Committee stage to provide that the abolition of the Wool Board should be just that and that the process set out in the bill should not continue thereafter without the oversight of a statutory manager to investigate it. The Wool Board is being disestablished—or got rid of as one says—but in the view of New Zealand First and I am sure of some of the members of the Primary Production Committee farmers are unsure of what is to come after that. Farmers voted to get rid of the Wool Board; of that there is no doubt. Whether they voted to put the same old faces in different places for the future is a matter of some doubt. 
I make no apology whatsoever for saying that New Zealand First’s amendments are based on the submission of Mr Phil Verry of the International Wool Corporation who has said that farmers do not know what is coming after the disestablishment of the Wool Board and that we need to take a far closer look at that. A lot of companies are being set up. One needs to understand what they are all about and more important to have the farmers understand what they are all about. The question that should be asked at that stage is whether that is what farmers want. Do they want to have the Wool Board continue in many different guises with basically the same people running things or do they want to stop the board there and do their own thing and indeed to sell off or not to continue with some of the companies that are proposed? The companies are all being set up; many have been set up as we speak and prior to this legislation going through the House. 
It is true to say that people whom we respect have advised the select committee well and diligently. I understand that they had no option but to advise us in the way that they did—that is to preach caution and to say to us that this bill is the result of a farmer referendum. I understand that the Minister of Agriculture said that if farmers agreed to bring a restructuring plan to him the Government would implement it. The officials subsequently had no option but to carry on down that line of advice. 
However questions arise in relation to the setting up of the companies—Ovita Covita Merino Grower Investments Wool Equities Canesis Venture Capital and Canesis Network which we only learnt about as the select committee was winding down its deliberations on this bill and one suspects that there are more companies to come. New Zealand First says that if there is any doubt it should be dispelled that it is best dispelled by an independent person and that it is best dispelled by this House preaching caution in these matters. If there is no suspicion and if nothing is untoward and everything is as it should be then of course the plan should go ahead. 
I cannot help but mention the fact that the $100 million that is commonly talked about that the Wool Board has in reserves was built up during World War II—if one believes that—and has been carried forward since then. Many submitters have said they have paid the levies the Wool Board is being wound up and they want what is left over of those levies to be paid back to them. But that is not to be the case. That money was put aside in the heyday of the wool industry and it is a sad story that its heyday was back in World War II and that it has since been seriously depleted. 
Hon Member 
: It’s wool not hay! 
R DOUG WOOLERTON 
: My colleague tells me that it is wool and not hay and he is absolutely right. 
 We are told that the average farmer—bearing in mind that people with fewer than 250 sheep are as from 30 June I think disbarred from participating in an allocation of cash or redeemable shares and that we are talking about quite substantial farmers having ruled those smaller ones out—will receive individually in the vicinity of only $1500 to $2000. That is an average and averages are dangerous. So the pot of gold that farmers thought at the beginning of this process would be there for them has been seriously depleted and I think the mood amongst farmers is very much one of not caring what happens. They just want the Wool Board to go. They are not expecting a whole lot of payout from it but say there is a curse on its house. 
That being the case I think it is absolutely appropriate that we have the amendments in my name that are before the House to— 
Clayton Cosgrove 
: Who wrote them? 
R DOUG WOOLERTON 
: The member is being facetious; he knows I am not a lawyer. I should have been one but I am not. Writing amendments is not my cup of tea and I freely admit that. Nevertheless the amendments are in my name and they are a precaution. Even though I am not sure whether all the parties of my fellow members on the select committee will vote for my amendments I am sure they address a concern that all the members on the select committee had to a degree—it is just a matter of the degree to which the matter concerned them. 
I sum up by saying that New Zealand First supports the abolition of the Wool Board. It has doubts about the companies that are to be set up with the same old faces appearing in different places. However we will address that by introducing our amendments at the Committee stage. 
MARK PECK (NZ Labour—Invercargill) 
: 
 I will take only a very short call on this bill and say to the member who preceded me that one of the things I miss about not being on the Primary Production Committee is being there for his deliberations. He is a humorous member. He says he is not a lawyer but can I tell him he is probably a better lawyer than he was a farmer—and he might take that as a compliment. 
I simply want to say that this bill continues with the restructuring of our primary industries and it is a good piece of legislation. I pass on a little bit of thanks to a person who has not been mentioned so far in this debate a bloke called Robin Campbell. He is a farmer who lives just outside the Otago electorate. He is on the AgResearch board and has done quite a bunch of research work in that area. I certainly want to pass on my congratulations to him on the work he has done on this bill and to the select committee on the work it has done in bringing the bill back to the House. 
GERRARD ECKHOFF (ACT NZ) 
: 
 If the House is prepared to listen very carefully it will hear a huge sigh of relief throughout the whole of rural New Zealand this very morning because I believe that this is the day that the Wool Board is finally euthanised—the day on which it will meet its maker. It is appropriate in this second reading to reflect—and the Leader of the Opposition Mr Bill English did that—on where we have been and where we have come to on this very day in the year 2003. 
I personally think back to the days of the Korean wool boom which were the halcyon days of the wool industry—the days when the public from the towns and cities went out to the country to pick the wool off barbwire fences to sell such was the demand for that product back in the 1950s. Then both Australia and New Zealand went into times of having huge stockpiles of wool for which we could get virtually nothing. So we have gone round in many circles in this industry. In my days of farming in the early 1970s there was a great wool-acquisition debate in which it was determined that if some structure acquired all the wool and had an orderly marketing system things would be brilliant. The growers rejected it then and I suspect that if they had the same opportunity today they would reject it again. 
It is also appropriate that I give recognition to Owen Jennings the former member of Parliament who was responsible for drawing to the public’s attention—certainly he reflected in this House the views of the farming community—the inadequacies of the huge monolithic structure that the Wool Board came to be. Owen worked very hard at considerable personal cost to himself to ensure that the Wool Board was finally put to rest. This is a day he can take real pride in. 
As I said earlier the wool industry has lurched from crisis to crisis. Growers had the view that they were throwing good money after bad and that the auction system was a method whereby they just dumped their product on the auction room floor and hoped that somebody turned up to buy it. Essentially that was the marketing system we had and still have to this day. But major refinements to the wool industry have been made. I believe that the archaic attitudes that were displayed in the past are being whittled away very consistently and that we are now moving quite strongly towards a very commercially focused industry. “Marketing” and “research and development” are the operative words we use today when talking about the industry. 
We cannot help but reflect on the days of the Wool Board when farmers were very perplexed—which I think is a nice way of putting it—about the world trips its members took and they saw an attitude of “jobs for the boys” and so on. The board always talked about accountability. It said it could account for every dollar it spent but it was interesting to note that nobody ever accused the board of performance. What is required today in this very competitive commercial world is performance not just accountability. 
Report after report was done until finally the McKinsey report came through and recommended that a vote take place on whether the board should be retained or got rid of and replaced by some other structure. I agree with my colleagues from this side of the House that the vote taken on the McKinsey report was in essence purely on one issue and it was that the farmers wanted to get rid of the board. In my view they did not actually vote in favour of the structures that have been put in place by the board. With advice received during the select committee process I have with some reluctance come to accept that to protect the massive tax losses for example and to protect the intellectual property of the Wool Board and the Wool Research Organisation of New Zealand it is necessary to ensure that other structures are put in place when the Wool Board is finally laid to rest. 
I think that is entirely appropriate just as a few years back it was entirely appropriate for merino growers to tell the Wool Board that it was not performing that they could do a better job and that they wanted the right of self-determination. It was with huge reluctance that the board finally relented and allowed Merino New Zealand to do its own thing and relatively speaking it has been very successful by comparison. 
Other individual growers have done the job that the board should have done. I can think of two highly successful growers in my region Jeanette and Russell Emerson who have contributed enormously to the development of the fine wool industry. They would go to Italy and knock on the doors of processors and sell their wool directly. They were vertically integrated—if one likes. There were people throughout the industry who wanted the opportunity to develop the industry the way it should be. They certainly challenged the fiefdom—and that is what it was—of the Wool Board and finally its hours and minutes are running out and that is great to see. 
Wool has been one of the great products of New Zealand—as a carpet a furnishing a suit or whatever—but we have to understand that in essence wool is a protein. Its base is pure protein and that is where the future lies for wool. I have no doubt that the real future will lie with organisations that can take wool and turn it into a product that the world really demands not just some sort of article to keep. That is why Canesis has been set up. The Wool Research Organisation of New Zealand is an incorporated society and cannot raise money. It needs those commercial organisations under the very capable stewardship of Richard Bentley—a very commercially focused and performance-focused individual. 
Although I accept that it is a huge article of faith to ask the growers of this country to yet again stump up with their money and invest in the industry I think the bill gives this industry and those woolgrowers an opportunity—and that is all it is—to invest in their own future with a pure commercial focus. Although I personally have very real doubts about where we are heading sometimes one just has to take that article of faith that giant leap and hope that one has appointed the right people. Surely the reality in this commercial world of ours is not the system but the individuals. It is the people who run the systems who will take any industry forward. It is absolutely crucial that we attract and retain the very best people and I think we have taken a giant step forward in that direction. 
CLAYTON COSGROVE (NZ Labour—Waimakariri) 
: 
 I rise to support the bill. First it is interesting being a member of the Primary Production Committee where there is a great deal of unanimity and consensus—unlike another committee I chair that is highly political. Maybe it is because the issues are rural ones but we tend to cooperate in a way that I think brings a lot of esteem and honour to this place. Although we all support the bill—[ 
Interruption 
] A Green member does not and I apologise. Although most of us support the bill we echo the words of Doug Woolerton: “We gave it a lot of scrutiny.” 
It is worth pointing out that although growers have given us a mandate to do this and the Government and other parties in the House have said that they will do what the industry wants to do—in this case restructure—the point should be made as Mr Woolerton said that after 2 years growers can sell their shares. I think they will receive in the order of $2000 or $3000 each but they have an ownership cap of around 5 percent. However I can recall that when the Primary Production Committee was doing the Fonterra legislation at the same time as the fruit legislation the concern it had was somehow to preserve the cooperative structure of the dairy industry to prevent the sort of corporate burgle and raid that ENZA and fruitgrowers were put through by the Guinness Peat Group. 
As a Government we have done what growers wanted. This bill is mandated by growers and this Government will adhere to that. My hope is that at the end of that 2-year period before growers decide to sell or retain their shares they will acknowledge that there are huge issues at stake. For instance Mr Woolerton has pointed out the huge public good the research and the intellectual property that exist within a number of entities in this structure—Covita is an example—and even though there is a 5 percent cap any person who has run a business could argue that growers could make their industry vulnerable to a corporate raid. But once this bill is passed that will be a decision for growers. I support the bill because it is mandated by industry but I hope that at the end of that 2-year period growers will look very carefully at how their industry could change in terms of corporate raid or outside input and at how the cooperative structure they have had for many years could change should they decide to sell their shares. It does not take a rocket scientist to work out that 5 percent plus 5 percent plus a few other blocks of shares could end up producing a controlling or dominant interest through intangible relationships between entities or growers. 
As Gerry Eckhoff pointed out there has been huge progress in the wool industry. The select committee went to the Wool Research Organisation of New Zealand and saw the amazing things that are happening with wool. As Mr Eckhoff said with wool being a protein that organisation is turning it into all sorts of products and that is a magnificent thing for the industry. Again I just hope that growers will acknowledge that and the huge value they have if they choose to maintain that sort of cooperative control in their industry. 
I support the bill. It is good legislation and I believe that it will deliver what the industry wants. It is also fair to say that as Mr Woolerton pointed out a large amount of the motivation for providing a mandate for this legislation is that growers for whatever reason have had a gutsful of the Wool Board. Finally I say again that I hope growers will think carefully when actioning their shares 2 years hence. 
IAN EWEN-STREET (Green) 
: 
 The Greens oppose this bill. We support the disestablishment of the Wool Board but from that point on we part company with what Clayton Cosgrove has just mentioned. We do not believe that there is a mandate from farmers for this restructuring. As a consequence of that this is bad legislation. It is predicated on the basis that there is a mandate. 
I want to take members through some of the figures to illustrate why I do not believe that there has been a mandate. First there are around 28000 woolgrowers in New Zealand. Of those 12000 in round figures have fewer than 250 sheep and those people were not entitled to vote. Already 40 percent of potential voters were disenfranchised even though those people paid levies to the Wood Board—sometimes for many years. Sixteen thousand people who owned more than 250 sheep on 30 June 2002 were eligible to vote but only around 40 percent of those did vote. Sixty percent of the growers were entitled to vote and 40 percent of them did so a total of 24 percent of the total number of woolgrowers in New Zealand actually voted. 
The next question is why the vote was put as only one question. Why were the farmers given only the choice of getting rid of the Wool Board and accepting the new structure? Was it so hard to have two votes to ask them whether they wanted to get rid of the Wool Board yes or no? There would have been an overwhelming vote in favour of getting rid of the Wool Board but did farmers actually understand what they were getting? Did they vote “Yes we do want this new structure.”? I doubt it. I do not think that they thought that through at all. They thought that anything had to be better than the Wool Board. 
I am also very concerned that the people who ran the Wool Board—the organisation that has been dysfunctional for many years—have also been influential in the creation of the new structure. Did they engage in true consultation with the woolgrowers? That is a very leading question. I know that McKinsey did a survey and it believed that it had a mandate from farmers for this structure but there seems to be some evidence that McKinsey was instructed to come up with the new structure. If that were the case it may be that premeditation was involved in this consultation. I remind members and farmers of the Wellington Airport case where the company was accused of not doing proper consultation. The company had an outcome in mind. It went to the shareholders and said: “This is what we’re going to do.” It believed that that was consultation! The court found against the company. If there is premeditation in the consultation process then that becomes legally challengeable. I urge farmers to think about whether there was any premeditation in the way they were consulted; if so they have a right for that consultation process and the mandate to be legally challenged. 
Another question I have about the consultation process is whether the farmers actually understood what the reforms would mean to them in a practical sense. I personally doubt it. I am a woolgrower myself but the information I received seemed so complex at the time that I just dismissed it. To be fair though at that point I had sold all my sheep—I was coming into Parliament—so I was not entitled to vote anyway. I did not really engage but on a serious note I do not consider myself to be an idiot— 
Hon Member 
: Everyone else does! 
Hon Member 
: Can we have a party vote on that? 
IAN EWEN-STREET 
: It is a real surprise! I do not consider myself to be an idiot but I really struggled to come to terms with the complexity of these new structures. They are needlessly complex. Do farmers or any members of the Primary Production Committee or any of the officials or anybody in the world understand the intimate interrelationship between organisations like Wool Equities SheepCo the Wool Research Organisation of New Zealand Keratec Ovita Covita merino growers non-merino growers and many others that I cannot remember? [ 
Interruption 
] Gerrard Eckhoff who assures me that he has led a life of blameless excellence does understand the complexity of those new structures and I can only aspire to his intellectual grip. I do not understand it and I doubt that very many people do. I am pretty well certain that farmers do not. 
I am also reasonably certain that farmers do not understand how the assets that were accumulated—primarily from World War II as Doug Woolerton said—have been diluted over time and that the control of those assets is slipping away from farmers under this restructuring. Do they really understand what they are getting with this restructuring? Do they understand that the distribution of assets amongst farmers will on average come to around $1500 or $2000 for a big farmer? A fluctuation in the currency will give them that amount of money. It is a drop in the ocean for a big farmer. We should not forget the 12000 woolgrowers who are disenfranchised. They could not even vote because they had fewer than 250 sheep even though they pay their levies. So what has happened to the $100 million in assets? Do farmers retain control of those assets? I do not think so. 
That is bad enough but the worst for me came after the select committee hearings concluded. At that point we were informed that two new structures were being introduced into this already complex structure. They were called Canesis Network and Canesis Venture Capital. If their existence became apparent only after the submissions to the committee had closed how could anyone believe that farmers had given that structure a mandate? They had never heard of those companies so they could not have given them a mandate. The average cocky would not have even heard of those names. The consultation about Canesis was non-existent. 
I believe that there is premeditation in this consultation process and as such I believe it can be legally challenged. I believe that because there is no mandate for this restructuring. Everything that happened after the abolition of the Wool Board is farcical. I will be supporting Doug Woolerton’s amendment to remove a lot of the latter part of the bill. I think we need to put the Wool Board assets in the hands of a statutory manager and let him or her decide the best thing to be done for farmers. 
I point out that the ownership of Canesis Venture Capital consists of industrial members and other investors—no farmers there. The governance of Canesis Network consists of seven directors: two appointed by Wool Equities—that is by farmers—three by the Wool Research Organisation which is now pretty much a stand-alone research organisation and two by Canesis Venture Capital. Therefore two of the seven votes are from farmers. Is that what farmers voted for? 
R Doug Woolerton 
: No. 
IAN EWEN-STREET 
: I agree with Mr Woolerton; it is not what farmers voted for. They were not consulted because Canesis Network and Canesis Venture Capital did not come into existence until after the consultation. I am not often a conspiracy theorist but this structure has my crap-detector going off full bore. It seems to me that this is a classic set-up to rip off farmers’ assets into the hands of corporate raiders. 
Gerrard Eckhoff 
: It smacks of scampi! 
IAN EWEN-STREET 
: It smacks of ENZA I can tell the member that. I would very much like my thoughts of a conspiracy theory to be proved wrong. I put this matter to the Minister and to the officials—and to their credit the officials have done their best—but I still have serious doubts about this bill. 
LARRY BALDOCK (United Future) 
: 
 I delayed taking a call on this bill because I wanted to allow the members who have been on the Primary Production Committee and have vastly greater experience of the wool industry than I do to speak first. Some of those who are unfamiliar with this bill may be surprised to learn that the issues it addresses have been the subject of considerable debate and controversy within the wool industry over a number of years. United Future had no representation on the select committee that examined the bill and as someone looking at the bill from outside this process I can say that the issues surrounding the restructuring of the wool industry are challenging in their complexity. I hazard to suggest that the MPs who did sit on the committee also found it challenging to untangle the network of organisations involved in this process and I think they have done a very good job in trying to address the concerns of the 33 groups and individuals who made submissions. 
The most important changes that the committee has made have been in response to a lingering concern that the new grower-owned organisations would be vulnerable to corporate raiders who might strip assets by acquiring a majority stake as occurred following the restructuring of the pipfruit industry. Vulnerable assets include accumulated tax losses and intellectual property and funds to be invested in the joint-venture biotech firms Ovita and Covita. The draft company constitutions prohibit the sale of shares to non-growers for the first 2 years and prevent shareholders from holding more than 5 percent. Those restrictions can be changed only by amending the constitution. Fifty-eight percent of growers approved this proposal in the referendum. The committee included a new clause specifying that those safeguards be included in the constitutions. Final approval of the constitutions and the restructuring plans is in the hands of the Minister of Agriculture. 
United Future is reasonably satisfied that these changes will help to safeguard the assets of the growers but the only real way in which that can be guaranteed is if the growers get involved in these organisations themselves. An example of this can be found in the recent announcement of the restructuring of the Wool Research Organisation of New Zealand into Canesis Network which has resurrected concerns about corporate raiders as the effort to attract investor capital is likely to reduce grower shareholding. This bill—nor this Parliament—cannot stop that restructuring from taking place. 
We have had many calls to put this bill on hold so that there can be a fresh invitation for a mandate from growers across the country. But no one here is convinced that that would produce an outcome any different from the one we are facing right now. In fact in conversations that I have had the growers themselves have admitted that if a referendum or a mandate was sought to be achieved in the next few months there would still be a huge lack of participation. Even if meetings were held in woolsheds across the country for a year to try to explain the new structures it is unlikely that we would end up with a different result. The structures themselves are complex and it would take an enormous effort to try to explain them satisfactorily. 
In my first reading speech on this bill I urged the woolgrowers of New Zealand to participate and to become involved in the submission process at the Primary Production Committee and I do commend the 33 submitters who did come to the select committee. I think they have seen satisfaction in some of the changes that have been recommended. But without going into great detail I say that the best way that the growers can ensure their interests are represented is to make sure they become active in the new entities Wool Equities and SheepCo which will have interests in Canesis Network. 
Other changes recommended include a cut in the number of directors appointed to the transitional company from a maximum of seven to five. The directors may still be selected from the current directors of the Wool Board despite the widespread disillusionment with those personnel amongst growers and the suspicion that the reforms are designed to perpetuate their careers. As Doug Woolerton has said the same faces appearing in new places is of concern but the answer to that concern is participation by the growers themselves. There is also a fear that those same personnel will install themselves in the top positions of the new entities as I said. Once again if the growers want to change the situation all that they need to do is to get involved in these organisations and to make sure they vote for those whom they want to lead them. The Minister has yet to approve the final constitutions but from the drafts it is clear that there will be opportunities for the growers to have a say on who sits on the boards. I would like to say that there could be some improvement to the bill to make it clear that the new directors particularly those of Wool Equities would need to face re-election at the first annual general meeting. That is not clear to me in the draft and I think it would be an improvement to make sure that it was clearly spelt out so that the growers would know that within a year’s time they could give a mandate to that board through an election process. 
The select committee extended the eligibility criterion for shares from a raw number of 250 sheep on 30 June 2002 to incorporate the average over the last 3 years. But calls to set a lower minimum were rejected. Any number that is set will be arbitrary and although growers with fewer than 250 sheep may have contributed levies over a long time some threshold has to be set that will overcome the transaction costs of distributing the shares. After all we are talking about only around $100 for someone who has 100 sheep. Merino growers will not be able to swap their redeemable preference shares in the transitional company for shares in Merino Grower Investments because it already has enough capital but the growers will still get exchangeable shares that can be converted into ordinary shares. 
Although the committee addressed some of the growers’ concerns particularly those surrounding the issue of corporate takeovers others remain. It is still claimed that there is no mandate for the new structure as the referendum results reflected an overwhelming urge to dismantle the board rather than necessarily constituting an endorsement of an alternative model. This point has been spoken to by other members before me. Some also point to the low turn-out and say that there is even less of a mandate for the proposed restructuring. By that logic most Presidents of the United States have not held a mandate to govern the United States. President Clinton in 1992 and 1996 was elected on less than 26 percent of the vote. 
Mr SPEAKER 
: Please come back to the bill. 
LARRY BALDOCK 
: If someone does not vote then it is very difficult for him or her to complain about the outcome with any credibility. Unfortunately this malaise is reflected in the industry and the growers need to think about their own involvement in it. Granted their interest may not be heightened by the complex nature of the structural reforms but if the referendums did not offer a mandate for new structures what alternatives did those growers have in mind when they voted? It would have been impractical to remove the Wool Board yet not think about what would be done in the aftermath. But growers are practical people and I think that if they do want to have some influence over the new entities there will come a point where most of them want to go past all the restructuring details and to find out what the entities might offer growers once they are set up. The best way for them to ensure that the new bodies work for them is to get involved in them. 
From the point of view of those running Wool Equities there will be a big incentive to listen to the growers and to respond to them in order to ensure that they hold their shares. Growers will have representation on the Wool Research Organisation through their involvement in SheepCo and through their involvement in Wool Equities on the other side of Canesis Network. I believe that we are offering them the best we possibly can. 
PHIL HEATLEY (NZ National—Whangarei) 
: 
 I am delighted to stand in support of this bill. The National Party as members have heard over the last few months has always supported the dissolution of the Wool Board and National recognises that we do so with the overwhelming support of farmers in the industry. 
It all started a long time ago of course in the 1990s. I acknowledge John Luxton who started the process during the forth-fifth Parliament. John made quite a contribution during the 1990s. He had vision. He worked with all sorts of other people in the industry to see this measure go through and now in the forty-seventh Parliament we are seeing this bill pass. One would think that it would be passed today. 
I must say that the members of the Primary Production Committee were put under tremendous pressure not just because we had to deal with Ian Ewen-Street’s endless questions intelligent though they were but also because of the time frames we had to work with. Ian Ewen-Street is the Green member of the committee. He is the member who galvanises that select committee there is no doubt about that but he galvanises it against him. The bill is already behind time. The Hon Jim Sutton promised that this bill would be introduced at the end of November. It was not introduced until 11 December 2002 and David Carter the select committee chairperson was under tremendous pressure to ensure that it went through. The Minister promised that it would be passed by early May. It was not. The restructuring date in the bill is 1 July. That is outdated now. Mr Sutton has been behind the game the whole way through and I think members should acknowledge that. 
But we have brought the bill to this stage. It will pass today with the National Party’s support but there is no doubt that that is because of the select committee process. The select committee was efficient. We listened to concerns and re-listened to concerns. We all received unsolicited mail and solicited mail as well and we saw David Carter bring this bill through the whole process. So I acknowledge him and my colleague Shane Ardern as well. 
A number of issues that were of concern were brought up during the select committee process. The first concern was about the mandate whereby 97 percent of farmers voted to see the Wool Board disestablished. Concerns were raised as to whether when they did that they voted for what would be established in its place in the future. But 97 percent of farmers did vote in favour. Although there was only a 36 percent turn-out that is a good turn-out in the farming industry. I do not think anyone would argue against that. 
Clayton Cosgrove 
: Better than the National Party. 
PHIL HEATLEY 
: Clayton Cosgrove I know would be delighted to have a 36 percent turn-out of even his board members in his local electorate so let us not argue about that. 
The second issue of concern to people was the Meat Industry Association’s claim on I think $41 million of reserves. The select committee considered that. We appreciated the argument but ultimately two things nullify it to a greater degree. Firstly the reserves were actually not recent levies but World War II payments—that applies to some of the issue. Secondly although the Meat Industry Association acknowledges that it paid part of the more recent levy that sum was then deducted from the price of lamb. If a $100 killing sheep was sold $60 would go one way but part of the remaining $40 was the Meat Board levy ultimately. So we believe that to a greater or lesser degree that particular issue has been addressed. 
Thirdly there was concern about the number of sheep a farmer should own before he got part of the assets. Ninety-three percent of farmers as I said before supported the concept of the shareholding being based on sheep numbers. The Greens wanted the number to be 100 sheep the rest of us were satisfied with 250 and 250 it will be. I do not know how many sheep that Green member runs on his farm but we felt that 100 was a little low so we have settled on 250. 
The fourth issue was to do with the Wool Board presenting a restructuring plan to the Minister of Agriculture. The information we have about Canesis Network came to the Primary Production Committee late and we acknowledge that it has come late to farmers. But we believe that we have beefed up the requirements for a report to be made to the Minister and that concern will be addressed in that way. 
So with those issues addressed I leave this second reading to other speakers. I hope that they will support along with the National Party the passage of this bill. 
Bill read a second time. 
Instruction to CommitteeCWH 
Hon CHRIS CARTER (Minister of Conservation) 
 on behalf of the 
 Minister of Agriculture 
: I move  
That it be an instruction to the Committee of the whole House on the Wool Industry Restructuring Bill that it take the bill part by part and consider any schedules as one question. 
Motion agreed to. 
In Committee 
Clause 1 Title 
DAIL JONES (NZ First) 
: 
 I think it should be recorded at this stage of the Wool Industry Restructuring Bill that as indicated by the New Zealand First agriculture spokesman Doug Woolerton we have put together some amendments. Bearing in mind that they are of a legal nature and will be put at the end of the debate on the various parts we are looking at putting the amendments to Part 2 individually but the amendments to Part 3—amendments 5 to 16—together. New Zealand First is looking at the Wool Industry Restructuring Bill— 
The CHAIRPERSON (Ann Hartley) 
: We can do those amendments when we come to Part 2 if the member wants. 
DAIL JONES 
: I just want to speak very briefly on the title which talks about wool industry restructuring. New Zealand First is concerned about the extent of everything that has taken place as was indicated by Doug Woolerton. We are quite happy to take the full role of an Opposition in this matter. The Greens appear to be supporting the amendments we are putting forward so that there can be better protection and wider consideration of this matter on the part of all the farmers of New Zealand who possibly do not fully understand what is being undertaken in the Wool Industry Restructuring Bill as it is called. It is not just a case of restructuring; someone said it is euthanasia. The bill puts the existing Wool Board to death and puts something else in its place; one might say it is a renewal as well. New Zealand First will put various amendments on Part 2 and Part 3. 
Clause 1 agreed to and Part 1 agreed to. 
Part 2 Conversion of Board 
R DOUG WOOLERTON (NZ First) 
: 
 Clauses 5 to 17 in Part 2 set up the new companies that I was referring to before. There is movement of the same people from the old Wool Board structure into the new one Wool Equities. From Wool Equities flow all these companies that one could suspect people apart from growers—and I am being very careful with my words here—might benefit from. 
Ian Ewen-Street 
: You’re privileged. 
R DOUG WOOLERTON 
: The Green member tells me I have privilege but I assure the Committee that I do not intend to get into anything controversial. We suggest that the members of the Committee should show caution and should look at the amendments I am promoting because we believe that once the money flows to Wool Equities it will be a case of “out of sight out of mind” and the institutions that are picked up beyond the scope of this bill are put in place by there being agreement that the money go to Wool Equities. 
We believe that a person should be put in a position of some power to look not only forward but back at what has happened leading to this point. In other words were the farmers fully informed of what will happen in the future? Are the farmers happy to go forward into these companies which everybody has said go into uncharted territory? I think the ACT member referred to them as a leap of faith. We in New Zealand First believe that leaps of faith are not something that should be promoted by this House. We do not believe that leaps of faith are something that it is in farmers’ natures to take. There are enough leaps of faith with God’s gift of the weather in this country without their taking commercial leaps of faith. 
So we believe that a note of caution needs to come in here. We believe that a statutory manager needs to be put in place to look backwards and to the future in order to give some clarity and to unravel what every member has said is an extremely complicated set-up. I recommend that course to the Committee and I can only ask that the other members namely the Labour ACT and National members will consider at this point changing their vote and supporting what I believe are very very worthy amendments. 
PHIL HEATLEY (NZ National—Whangarei) 
: 
 The National Party has given consideration to the amendments in the name of Doug Woolerton of New Zealand First. We will not be supporting his amendments. We have given them a lot of thought. The issues he raises are not new to us. The bill when passed requires the Wool Board to present a restructuring plan to the Minister of Agriculture. We entrust this matter to the Minister and expect him to do his job. We will be watching him very closely. Even though the issues have been firmly put to us on a number of occasions we do not believe that there is a conspiracy as many are led to believe. We did beef up the bill to ensure that no share exchange takes place for 2 years and that fewer directors are on the board and there are other issues that address that. So we entrust this matter to the Minister and to the industry as a whole. 
GERRARD ECKHOFF (ACT NZ) 
: 
 I am very pleased to have this opportunity to speak on this part. I refer to a comment made by my colleague Mr Doug Woolerton. He like all the members on the Primary Production Committee took very seriously the submissions received from a whole range of people. At this late stage it appears there is a divergence of opinion about where we should be heading. In all honesty at one stage in the early formation of the bill I was opposed. 
Sitting suspended from 1 p.m. to 2 p.m. 
GERRARD ECKHOFF 
: As I recall I was reflecting on the fact that at the early stages and the preliminary hearings of the submissions I too along with Mr Woolerton and Mr Ian Ewen-Street believed that we just send the receivers in and they dispose of the assets of the board as the receiver sees fit. That seemed to me to be a pretty sound concept at that time. But I have changed my mind after listening to people like Richard Bentley who is now the chair of Wool Equities. I listened to him and indeed had a private meeting with him so he could better explain his thinking. I came away from that meeting thinking yes I could accept the proposal that the Government has come up with because I believe in the strength of that particular individual. 
The board has to divest itself of its assets. Some will go to the growers; and the information technology the technology that the board owns has to go somewhere. It is better if it is going to an organisation that is essentially controlled by the farming community. 
I make the point that the Wool Research Organisation of New Zealand is an incorporated society and it has been the research vehicle for the wool industry. But it is an incorporated society and it cannot raise capital. There is a huge demand for the technologies and the new research and development that the organisation had come up with—for example Karatec is just one. New and equally exciting opportunities have been developed and there is a huge demand for capital to ensure that these developments take place. Mr Bentley assures me that with the structures now in place we will not have to go overseas to find capital that it can be financed in a local sense. That is something that should please us all. 
Under the new structures that Part 1 will authorise it is important to recognise that the Wool Research Organisation now has a new business plan and Wool Equities has rewritten the business plan for Ovita the biotech company. That company will be looking at ways of ensuring that the protein that is wool can be used in perhaps the pharmaceutical industry in a whole host of biotech ways. That needs money expertise and just as important it needs a business plan to ensure that those processes take place. 
I know there have been some real concerns about the “sudden” development of Canesis Network Ltd. We are confusing the two roles here. It is not the role of Parliament to get into the management of this industry. That is for the commercial arms to develop. There are very distinct roles here. One role is governance and one role is management. If we are to get into the micro-detail of determining in the Wool Restructuring Bill that this or that should happen to parliamentarians’ satisfaction then I think we are limiting the ability of these commercial organisations that will happen to best reflect the nature of the workplace and indeed the demands of the commercial world. 
Hon DAMIEN O'CONNOR (Associate Minister for Rural Affairs) 
: 
 I understand the good intent of the member’s amendment the principles of which were discussed at the select committee. The proposal which is very similar to one put forward to the committee by Mr Phil Verry is one that was considered. The background to it was put very thoroughly to the committee. As the previous speaker has said on balance the committee—and the Government is happy to support that position—decided that the proposals as laid out and put to the select committee and the process for dissolution of the board are sound and have the backing of the farmers and to intervene at this late stage with such a proposal is simply not warranted. That is why the Government will not be supporting Mr Woolerton’s amendment. 
The question was put that the following amendment in the name of R Doug Woolerton to clauses 14 and 15 be agreed to: 
to omit these clauses and substitute the following clauses: 
14Administration and governance of company 
The Minister must appoint a statutory manager to the company on the restructuring day to take full control of the company. 
15Powers and responsibilities of statutory manager 
The statutory manager shall have all the powers of the directors of the company and in addition shall have these powers and responsibilities: 
(a)to review the conduct and policies of the former Wool Board since 1996 to determine whether or not the actions taken by the Board and/or entities controlled by the Board including Wool Research Organisation of New Zealand (WRONZ) conform to the provisions intent and spirit of the Wool Board Act 1997; 
(b)to take such action as is necessary to remedy any actions or omissions that do not conform to the provisions intent and spirit of the Wool Board Act 1997; 
(c)to forthwith resolve all outstanding issues affecting the Board including claims against it on a fair and equitable basis respectively preferably by mediated negotiation but failing that by court processes pursued expeditiously; 
(d)to review whether or not the past and intended treatment of and/or disposal of assets of the Board and/or WRONZ including intellectual property assets has given proper consideration to: prior rightful proprietary interests in those assets; the best utilisation of those assets on behalf of their rightful owners; and such rightful owners’ entitlement to fair recognition of and recompense for the value of such assets; 
(e)to resolve any issues arising from these reviews as he/she shall deem appropriate; 
(f)to institute an appropriate procedure as he/she shall determine whereby wool growers: are fully informed of the options for the future structure of their industry that are practicably possible; are informed of the relative merits of each option; and are allowed to freely make an informed decision by referendum of the structure they prefer for their industry; 
(g)to facilitate and oversee the introduction of the industry structure preferred by wool growers; and to the extent that he/she deems appropriate to make available the assets of the former Board to support the establishment of that new structure. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 20 
New Zealand First 13; Green Party 7. 
Noes 86 
Labour 52; New Zealand National 20; ACT New Zealand 6; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of R Doug Woolerton to clause 16 be agreed to: 
to omit this clause. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 20 
New Zealand First 13; Green Party 7. 
Noes 86 
Labour 52; New Zealand National 20; ACT New Zealand 6; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of R Doug Woolerton to clause 17 be agreed to: 
to omit this clause and substitute the following clause: 
17No compensation for loss of office 
No director of the Board is entitled to compensation for loss of office either from the Boardany subsidiary of the Board or any other company or entity. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 20 
New Zealand First 13; Green Party 7. 
Noes 86 
Labour 52; New Zealand National 20; ACT New Zealand 6 United Future 8. 
Amendment not agreed to and Part 2 agreed to. 
Part 3 Restructuring of wool industry 
DAIL JONES (Junior Whip—NZ First) 
: 
 I raise a point of order Madam Chairperson. In view of the previous vote New Zealand First will withdraw its proposed amendments to clauses 18 through to 29. 
GERRARD ECKHOFF (ACT NZ) 
: 
 I rise to speak briefly on Part 3. Clause 18 requires that the board must prepare a restructuring plan which is right and proper. But again I think the concern of the farming industry has been the question of who should prepare this restructuring plan rather than whether a plan should be invoked. I have heard comments that many members of the existing board will reinvent themselves in terms of these new structures. 
 To my certain knowledge the only person who has resurfaced is Mr Mark O’Grady who will be the chief executive under contract to Wool Equities. This is a fixed-term contract for a period of 2 years. It was essential according to Wool Equities that it have somebody with an in-depth knowledge of the industry to assist the new directors in their deliberations as to how they believe the governance of Wool Equities should take place. They needed somebody who had hands-on management experience. It is perhaps a very debatable question as to whether Mr O’Grady was responsible in whole or in part for the fortunes or misfortunes of the board in the past but in the judgment of the new board of Wool Equities he was deemed to be the best person suitable to assist the new board to come to grips with the complexities of the wool industry. 
I do not see the names of previous board members other board members or even current board members resurfacing. So I think the one fear perhaps justified that my colleagues have has perhaps been a little overstated when we look at Part 3. As I said earlier I think it is very important that the employment of individuals within this new structure generally speaking these days is under fixed-period contracts. If the growers decide they do not want a specific individual as their chief executive they can relay that to the board—indeed they can sack members of the board for having appointed this particular fellow and that is as it should be. But the governance of the board should be left to the people who now govern it. It is appropriate that they should have the right to make their appointment rather than the wider industry having a vote on it. It is just not practical. 
One of the concerns I have in the farming world is that many farmers do not understand that it is not their job to have a hands-on day-to-day influence over the running of a company whether it be Fonterra or whatever. We place that in the hands of the individual the chief executive and it is his or her job to perform in the role and to be accountable as well but essentially if the chief executive does not perform then hopefully his or her contract will not be renewed. 
However I do understand the concern of my colleague Mr Woolerton. It was a concern that I also held in a very genuine way. But after quiet reflection I have determined that it is appropriate that the new board of Wool Equities will determine whom it shall appoint and not have myself or other politicians stick their oar in and say that it is quite wrong to appoint a certain individual. That is the board’s choice and the directors of Wool Equities will stand or fall on the correctness of that choice. That is one contribution I would like to make to this part and I look forward to my colleagues’ contributions to Part 3. 
PHIL HEATLEY (NZ National—Whangarei) 
: 
 I rise today as the National Party spokesperson on this bill to support the Government’s Supplementary Order Paper which corrects the misrepresentation on the calculation formula. As a responsible National Party we certainly support the Supplementary Order Paper amendments and we will be voting that way. 
R DOUG WOOLERTON (NZ First) 
: 
 I want to correct a couple of things that may have inadvertently crept in. The first is the suggestion and I know that Mr Eckhoff did not mean this personally that we would even want to involve ourselves in the administration of the wool industry. [ 
Interruption 
] I know that it was not put in quite that way. We have just lost the last chance quite frankly to have somebody who is independent look over the process. It was not to involve ourselves or this Parliament in the administration and certainly not to be casting aspersions on the good names of any people who may be employed in the wool industry henceforth. We have just passed a critical time. 
I say to the woolgrowers of the future—and I am not lecturing them but this is an observation that I think all members of the select committee would make and agree with me on—that the lack of participation in the industry by growers is lamentable. I know many of the reasons for that. It is a matter of having been ground down over the years. It is a feeling that their voices have not been heard. It is all those things. But it is very hard for a select committee and for a Government—those of us who are involved in the process—to get a fair understanding from such a small participation of grower members. 
I would like to make a comparison but not necessarily suggest that they follow the same route as the Fonterra board which put up three people for re-election. The price was not as they had hoped it would be and the returns were not as they hoped they would be so two of the directors were fired. The farmer participation dealt to them very very quickly. I am not so naive as to believe that it is just the farmers. There was a lot more politics. Further to that we have had the summary dismissal of Fonterra’s chief executive officer in favour of another person. That level of participation is very very healthy. I urge the woolgrowers of this nation to involve themselves in the new structures that are being put in place and to watch over them very very carefully because a lot of the things that we suggest could go wrong and that some people may profit from individually are beyond the scope of this bill. They are in the companies that are set up under the Wool Equities banner. 
Mr Eckhoff is absolutely right. We have no place meddling in those companies. We have no place directing people how to administer those companies but we do surely have the ability—and I suggest the responsibility—to urge farmers to participate fully in the democratic process in those companies and to ensure that the things we hope and pray will not happen do not happen. 
GERRARD ECKHOFF (ACT NZ) 
: 
 I would like to comment on clause 19A “Constitutions” and specifically on the constitution of Wool Equities. I bring this to the Committee’s attention because some concern has been expressed at the possibility that growers will lose control of the industry within a couple of years. The bill states that a shareholder must not sell shares in Wool Equities to a person other than another grower; a person who is not a grower must not buy shares or become a shareholder in Wool Equities; a shareholder and an associated person must not acquire hold or control voting rights for directly or indirectly in concert or otherwise more than 5 percent of the total number of shares in Wool Equities. 
I think this is a very sensible part of the constitution of Wool Equities that does give what one might call a stand-down period—a shake-down period—that allows farmers a couple of years to see how things are progressing and how things are moving. If they are moving in the direction the farmers think they should be moving then they can vote accordingly after the 2-year period. I am well aware that the bogeyman—if one could call it that—of corporate raiders taking control of farmers’ assets rears its head from time to time and the example has been used of the Guinness Peat Groupbuying into ENZA and taking control of that company. 
 I must say that I thought: “Well gosh is this a good thing?”. The reality is that if we ask the growers who are shareholders and sellers of their product they say that it has been a good thing. I make the point that as I have said before what these companies need dramatically is capital to develop. It is like having a farm but no money to put fertiliser on fence or build water supplies. The companies must have access to capital to be able to develop. Whether a company like the Guinness Peat Group is coming in for some benign purpose some productive purpose or otherwise really does not matter because farmers are not compelled to be members of Wool Equities if they do not wish to be. They can sell their shares get out of the industry and perhaps invest in some other aspect if they so choose. 
I do not think it is appropriate for myself as a woolgrower to tell other growers that I believe they should leave their money in or take it out. That is entirely for them to decide. But the constitution under this clause 19A allows for this very important stand-down period—for want of a better expression—in which farmers will see the trend starting to develop whether or not it is appropriate and react accordingly. I do not see the injection of outside capital and the potential—and I emphasise that word—for outside control to be something that farmers should be overly concerned about because if that industry becomes terribly successful they as shareholders in Wool Equities will benefit from that as well. Indeed the demand for their product on the auction-room floor or by private sale will also be reflected in the price they receive for their product. 
So I do not think that we should be overly concerned about the prospect of non-woolgrowers or those who are not currently industry players taking some sort of a controlling or a 20 or 30 percent stake and injecting much-needed capital into this industry. It is something that probably will be needed. But I also make the point that this is the very reason that Canesis has developed to ensure that the capital it needs comes pretty much from New Zealand sources rather than having outside capital come in to develop these quite exciting products that the Wool Research Organisation of New Zealand has developed on behalf of the woolgrowers of this country. 
The question was put that the amendments set out on Supplementary Order Paper 101 in the name of the Hon Jim Sutton to clauses 20B(2) and 20C(2) be agreed to. 
Amendments agreed to. 
Part 3 as amended agreed to. 
Bill reported with amendment. 
Third Reading 
Hon DAMIEN O'CONNOR (Associate Minister of Agriculture) 
: 
 I move  
That the Wool Industry Restructuring Bill be now read a third time 
. The bill was introduced into the House on 11 December 2002. It had its first reading on 19 March 2003 and was referred to the Primary Production Committee on that day with the instruction that it present its final report on or before 16 June. The select committee reported the bill back to the House on 16 June as first indicated. 
The bill restructures the New Zealand Wool Board into a company New Zealand Wool Board Disestablishment Company Ltd to wind up the affairs of the board and to distribute its assets among woolgrowers. The board was originally established in 1945 to undertake wool research and development technology transfer education and training wool promotion and other issues. Since that time the board has operated under various legislation and with an assortment of functions including operating a minimum prices scheme for wool from the late 1970s to the 1990s. 
Today the board is engaged in industry-good activities and through its subsidiary Wool Equities Ltd and its associate company Meat and Wool Innovation Ltd it is engaged in commercial wool activities. When the board was established the industry was predominantly focused on the UK which took the vast bulk of New Zealand’s wool. Today the main market for this country’s wool is China which takes about 23 percent of our exports. The UK now takes 15 percent of New Zealand’s wool exports. Greater attention is now being given to innovation and to adding value to our produce prior to export. We have seen developments in the wool industry for example with respect to keratin proteins in wool fibres and now the time has come for its commercialisation through the new company Keratec New Zealand Ltd with its grower ownership stake through Wool Equities. The bill will enable growers to participate in the potential financial benefits from this commercialisation over the coming years by being allocated shares in Wool Equities. 
The bill not only facilitates regulatory and structural reform in the wool industry it also enables separation of industry-good and commercial activities. This means that the industry can be more responsive to changes in the commercial environment facing its business and to business opportunities. It should also mean that those businesses become more profit-focused. 
The industry still faces challenges ahead. They are exciting challenges if growers get behind them. However there can of course be no guarantees. The bill provides for the allocation of the Wool Board’s assets to growers split between the grower companies Wool Equities and Merino Grower Investments. It is going to be over to the directors management and grower-shareholders of those companies to ensure that the decisions in future are such as to realise the potential returns that exist on growers’ investment. 
The process of wool reform has not been a quick one. It was the Wool Board’s annual general meeting in 1999 that decided to hire McKinsey and Co. to undertake an independent review of the wool industry that has led ultimately to this bill. Some say that this process has taken too long while others want to drag it out further. The Government is convinced that the majority of growers support the bill and that is evidenced by the number of submissions the select committee received: a total of 33. Among those Federated Farmers Meat and Fibre Producers supported the bill. I wish the Wool Board Disestablishment Co. well in winding up the affairs of the board and allocating the board’s assets to growers. I also wish Wool Equities Merino Grower Investments and their subsidiary and associate companies all the best for the future. I would also at this point like to thank the officials for their very difficult work. I would particularly like to congratulate Ken Armstrong from the ministry who has been a key part of this oversight process. He will be pleased to see this bill pass through the House and place responsibility in the hands of woolgrowers instead perhaps of having it on his broad shoulders—as has happened from time to time. 
Most of all I wish New Zealand woolgrowers well. Growers have waited patiently for Parliament to enact this bill. Non-merino growers will need to decide whether to convert their preference shares to ordinary shares in Wool Equities as a future investment or to cash them in. Merino growers will get their preference shares in cash in any case. In August all growers will have an important vote to participate in under the Commodity Levies Act to determine whether they have a levy on wool post 30 June 2004 that will be used to fund industry-good activities. 
The future of the industry is in growers’ hands. As individuals they have very little chance of having their wool compete with non-renewable manmade fibres in the international marketplace. However collectively as an industry united in its objectives and vision they can maintain their place in New Zealand agriculture through innovation and growth and develop new innovative international-market opportunities. I commend the bill to the House. 
PHIL HEATLEY (NZ National—Whangarei) 
: 
 On behalf of my National Party colleagues particularly Shane Ardern and the Hon David Carter and my former colleague the Hon John Luxton I commend this bill to the House. We will be supporting it. Obviously we have voted for it through all its stages and will be doing so now. It is enabling legislation. This bill when passed very shortly will require the Wool Board to present a restructuring plan to the Minister of Agriculture. The restructuring plan will have to be sound. I trust the ministry and the Minister to give it fair scrutiny and to address issues and concerns raised by other members of the House who are less confident about the future under the current proposals. 
Fledgling companies such as Canesis those on the horizon and some developed ones such as Ovita and Covita have opportunities in research and development and the promotion of new products as does the industry as a whole. If some of those companies come to pass I wish them well as well. 
I do commend this to the House. Many issues were raised and spoken about by members. The debate still has to be had and the Minister still has to address those issues. We believe that as a select committee we have been diligent. We have beefed up the requirements to report to the Minister. Those requirements need to be met and we trust the industry to do that. As I say we will be supporting this bill. 
LARRY BALDOCK (United Future) 
: 
 I rise on behalf of United Future to express our support for this third reading of the Wool Industry Restructuring Bill and to make just a few brief comments. It has been heartening to see the cross-party support throughout this phase. Although we have not had a person on the select committee I know that the committee members worked very hard and I commend them today for the way they have addressed the particularly complex issues within this bill. Nothing is ever perfect but I believe that the House has done the best job possible today to deliver the best legislation we can to protect the interests of woolgrowers and move them forward into the 21st century. I thank the officials for their hard work. 
As I said in my second reading speech I look forward to further clarification in the transition phase for Wool Equities so that the growers will have an opportunity to express their commitment to the new board members at some stage in the future preferably at the next annual general meeting. I believe they should exercise that option and responsibility. It is now however in the hands of the Minister as this bill is passed to ensure that that takes place. United Future is happy to support the bill. 
R DOUG WOOLERTON (NZ First) 
: 
 I am naturally sorry that the amendment that was put up in my name was lost. I think we have lost an important opportunity to pause for another look and to have a further investigation of the common sense of the things that lie beyond this bill. However New Zealand First will support the bill. I make no apology for believing that industries should be controlled and owned by the participants within them. I know that sometimes these days that is becoming an outmoded concept but it has served this country well. I believe that in the guise of Fonterra it will continue to serve the dairy industry well and I believe that it could have served the wool industry well also but that is not to be. The wool industry is heading out into a brave new world and I wish the industry all the best on that journey. 
I want to particularly mention the emerging participation of Maori corporations in the farming world. At long last Maori are banding together under a corporate identity to participate. They felt that by their numbers they were outvoted and not listened to in the structures that have just passed into history shall we say. I know they will welcome the new world. I believe they could have been incorporated into a more cooperative world than the one that is going to be faced by the wool industry but that is not to be. 
I am sure that woolgrowers and sheep farmers right across the country will view the passing of this bill with immense relief whatever side of the argument they came down on. I am sure they will pick up the challenge that I laid out to them earlier and participate with renewed vigour to ensure that the democratic processes we have been at such pains to ensure remain in the bill are picked up and carried forth so that farmers have delivered to them that which they aspire to. 
The commodity levy that comes in will be an interesting test for farmer participation. There are some views around that farmers will reject it out of hand but knowing farmers as I do—and I am sure as you have come to do over the years in this House Mr Speaker—I am sure that common sense will prevail and they will engage with their industry and go on to the better things that this allows. 
So it is with some regret that I end this speech by saying that I would have liked to see a halfway house established so that another independent person could have looked at this industry. That was not to be but we will not be dogs in the manger. We will vote for the bill and wish the industry which is so valuable to New Zealand all the best for the future. 
GERRARD ECKHOFF (ACT NZ) 
: 
 I am delighted to have this final opportunity to speak on this bill in the third reading debate. I cannot stand here with my hand on my heart and say that I know exactly where the future of the wool industry is. I cannot say with absolute certainty that Mr Woolerton is absolutely wrong and that I am absolutely right. I am not sure about that; I am not totally sure. But on the balance of probability I believe it is appropriate that this bill go forward with the support of this House and that we allow the industry to develop as it should. 
I would like to make a few points to the House. The reality is surely that if there had been no Wool Board created whenever it was—50 years ago—we would not be standing here today to debate its demise and what should take its place. I think of the opportunity cost that we perhaps face today because we have had a structure that supposedly threw a security blanket over woolgrowers and told them they did not need to worry because the Wool Board was there to look after them—and of course the wool industry went down down and down. That security blanket has now been totally removed—or in very large part removed—from the growers. 
I can only reflect too on the traumatic events—as they were back in the 1980s—when subsidies were removed from the farming industry. I lamented deeply the loss of my subsidies because I was the backbone of the country along with my farming colleagues and I asked how this Parliament dared to remove my subsidies. I was receiving about $8 or $9 for a lamb and I was going broke. The meat industry recognised that if farmers went broke it would go broke. We saw the need for a commercial focus and the requirement the absolute requirement of the industry—the farmers the meat processors and the whole lot of us—to recognise that if we wanted to have a future in this country we had to get out there and do it out in the marketplace and that is what happened. In recent years in the meat industry farmers have been receiving a cheque for a single lamb of anywhere between $70 and $120. Within that 20-year time frame we have gone from receiving $8 per lamb to receiving $70 $80 or $100 and in some cases $120. How many other industries with a primary production focus can actually state that they have gone in from that very low level back in the mid-1980s to the high peak of around $120 by trading in what are essentially commodities? Certainly the meat industry has much to be proud of. 
I wonder in these quiet moments whether the same thing will not apply to the wool industry—whether in 30 years’ time the industry will go back to this very day and ponder what happened. Will farmers say: “Thank goodness that bill was passed. Those guys—and women too of course—were not sure whether they were 100 percent right but my goodness me they gave us the opportunity.”? Today we are trying to give the wool industry—not just the growers but the whole wider industry—the opportunity to move forward. Yes as Mr Woolerton has pointed out it is a huge article of faith for us to stand here today and pass this bill but surely that is part of our job. We have to make a judgment call from time to time and we stand or fall on the results of our decision making. Woolgrowers may be so angry with me that I am never heard of again and that of course is their choice. 
R Doug Woolerton 
: We’re trying. 
GERRARD ECKHOFF 
: Some of my colleagues may help me along the way too but that is fine. 
Without question this restructuring is a huge article of faith. As a farmer of some 30 years’ standing I realise that I live in hope. That is what I do as a farmer. On this very day when huge storm warnings have been issued for my neck of the woods I live in hope that nature will pass me by on this occasion and the storm will move out to sea. We live in hope of better days. That is what this bill does for the farming industry. It provides an opportunity. Could the restructuring have been done better? Undoubtedly it could have been but there are times when we just have to say that we have done the best that we could do with the knowledge currently available to us. 
We have had many many submissions from very capable people indeed including even the Inland Revenue Department. My colleague Rodney Hide would be apoplectic if he knew we were taking advice from that department. We invoked the department’s help to assist us with our deliberations because there are tax losses of $270 million and that huge sum of money has to be utilised to the benefit of the wool industry. That is what the farming community is attempting to do with the passage of this bill. 
We have also introduced a much greater commercial focus. Some hard-nosed business people are set to represent us and to assist the wool industry to move forward. My faith is not so much in the system or the structure that we have placed in the bill but in the people who will I hope overcome the problems that we face with regard to low commodity prices. Who knows? Maybe instead of receiving $3 or $4 for a kilogram of cross-bred wool we may be looking at receiving $10. In 10 or 15 years’ time we could well see pharmaceutical companies clamouring to buy our wool product because it contains a special enzyme that enables burn specialists to solve skin-grafting problems. 
I do not know where the future of the wool industry lies. I do not know what the biotech companies will come up with but I do know that the future is exciting if we allow it to be so and allow—without getting into any political ideologies—the market investment and most important research and development to take place in that industry. The focus of research and development has been lost for so many years under the auspices of the Wool Board. 
When something is taken away as the Wool Board has been a vacuum is created. But while I certainly do not profess to be a physicist I know that a vacuum is always filled. Nature does not allow a vacuum to remain; it is always filled. As I said earlier I cannot say with absolute certainty whether that vacuum should have been filled with the Wool Corporation or whether it should be filled with the existing structures that we are promoting in this bill by means of Wool Equities. But I think the committee has worked very well together to achieve the very best possible outcome for the industry. Yes there are areas of disagreement but I do not think they are so huge that the industry will not overcome them. My time on the Primary Production Committee has been a rewarding one and I thank my colleagues on the committee for what I think is a good job and a job that has been well done. 
IAN EWEN-STREET (Green) 
: 
 I would like to start my final speech on this bill by thanking the officials who have helped the Primary Production Committee. I am aware that at times I was the bane of their lives and I just want to thank them for their patience with and tolerance of me. They did fail to convince me even in the end that we were doing the right thing but they did do their best. I would also like to join my colleague Gerrard Eckhoff in acknowledging the collegiality of the Primary Production Committee. I do think we all put our heads around this bill in a very non-partisan way in order to come up with the best possible solution. 
I have always expressed my doubts about this bill. As time went by in the select committee my opposition to it grew and I have not changed my mind. I think the growers really need to be very aware of what is going on. As I said in my second reading speech I sincerely hope that I am wrong but I have very grave fears about what will happen. I would urge woolgrowers to look at the ownership of Keratec. The figures and flow charts appear to show that Keratec ultimately remains in the ownership of farmers. However if one looks through the way that governance is covered one sees that there are votes that will outweigh the ownership percentages. I just think that the potential for farmers to lose control of Keratec which is the jewel in the crown of the intellectual property of the wool industry is very real. 
I would also urge farmers to look at the mandate that the industry claims it has for this restructuring. I detailed that matter in my second-reading speech so I will not go through it again. But if farmers believe that there was any premeditation in the consultation then there is precedent in the law to say that that consultation was not actually consultation and can be legally challenged with the result that the restructuring would go back to square one. 
I do wish the industry well. My opposition to this bill should not in any way be interpreted as being opposition to the disestablishment of the Wool Board which I think is an essential thing. I am just not convinced that the structure that has been put in place is the right solution and I am particularly concerned about the very late arrival of Canesis and Canesis Venture Capital on to the scene. I wish the industry well but unfortunately I really cannot see my way clear to supporting the bill on this occasion. 
A party vote was called for on the question  
That the Wool Industry Restructuring Bill be now read a third time. 
Ayes 99 
Labour 52; New Zealand National 20; New Zealand First 13; ACT New Zealand 6; United Future 8. 
Noes 7 
Green Party 7. 
Bill read a third time. 
The House adjourned at 2.49 p.m. (Friday)