Foss Craig: Subordinate Legislation (Confirmation and Validation) Bill (No 3) — First ReadingText is incorporated into the Bound VolumeFoss Craig: Subordinate Legislation (Confirmation and Validation) Bill (No 3) — First Reading[Sitting date: 11 October 2007. Volume:642;Page:12332. Text is incorporated into the Bound Volume.]CRAIG FOSS (National—Tukituki): I rise to talk briefly on the Subordinate Legislation (Confirmation and Validation) Bill (No 3). We have been assured that this is a relatively administrative and procedural bill but it touches on many many facets of our society. The Regulations Review Committee will no doubt make sure that there is nothing dodgy or untoward going on here and we have full confidence that that is the case. Ten Acts and a number of Orders in Council will be confirmed by this bill. They will be rolled over they will be confirmed or they will essentially not expire. We have heard from other speakers and they have touched on themes from peak oil—from the Greens—right up to pipfruit and grower levies and someMāori issues as well. As I said many of these issues cut across various facets of New Zealand society but coincidentally many of them also have a large bearing and impact upon my electorate Tukituki and of course the region of Hawke’s Bay the home of the mighty Magpies—one of New Zealand’s best rugby teams—who are currently fourth-equal in the Air New Zealand Cup.I will touch on three of the Acts and/or Orders in Council that the subordinate legislation deals with. Clause 8 of Part 2 deals with the Commodity Levies Act clause 9 deals with the Customs and Excise Act and clause 12 deals with the New Zealand Superannuation and Retirement Income Act—coming on the back of the previous speaker’s remarks.Clause 8 talks about the grower levies. I want to talk particularly about the pipfruit levy being from Hawke’s Bay. That is in and around the enabling legislation as a previous speaker talked about. Growers themselves actually vote for these levies and good on them. This provision enables that to continue. Pipfruit New Zealand is mostly about apples though pears are also in there. Those funds will be used to continue to build upon the momentum that was gathered from the Aussie apple access protests which myself and Chris Tremain were actively involved with in the last 2 years and it is fantastic to see action finally happening. The World Trade Organization action will be taken apparently—we do not yet know when—by the current Government. But I say all speed to them and I ask them to please just get on with the job.Also the pipfruit levy will be used to help restructure and put further capital intoPrevar. A lot of people do not know what that organisation is. It is the research and development side of Horticulture New Zealand. It is a commercial company but there is an interesting shareholding tension at the moment. I for one am very very concerned that the future viability of years and years of research and development inPrevar is under threat at the moment as is New Zealand’s ability to commercialise research there. A lot of work needs to be done.A previous speaker talked about the commodity levies and particularly about organics. I think the member was saying organics need different treatment. I am quite keen to speak to the member—I think it was Nandor Tanczos—who was talking about that earlier. I am not sure whether he realises it but one of the biggest andgruntiestapple growers and squash players and exporters in New Zealand is actually organic. This grower competes very very well and gets better returns than traditional growers do.I will touch on clause 12 which deals with superannuation which is what the previous speaker from New Zealand First Pita Paraone talked about. This is one of the clauses that touches on CPI. Of course we all know what CPI stands for—the consumer price index or inflation. The previous speaker talked about the increase to 66 percent of the average wage as the married superannuation. He is right and that is part of New Zealand First’s confidence and supply agreement. But actually that confidence and supply agreement expires at the end of this parliamentary term. That means as is currently planned that married superannuation will go from 66 to 65 percent on the expiry of this Parliament so there will be an interesting tension come election time because that confidence and supply agreement expires at that moment.To touch again on the superannuation issue I say that the rate is currently 66 percent of the average wage. I have said many times in this House that there is a lot of talk about the rate of superannuation—66 percent 67 percent 65 percent. That kind of misses the point because it is based upon the average wage. If we look at the average wage in New Zealand we need to acknowledge how absolutely pathetic it is in international terms. Our average wage is about one-third lower than Australia’s. That is an absolute disgrace and it is upon that absolutely uncompetitive average wage that the superannuation is based. So when people talk about being unable to live on superannuation and have it get them through the week well actually that is because the average wage it is based upon is so low.A final point I will touch on is the Customs and Excise Act—clause 9 of the bill. This allows and confirms the Order in Council that allows indexation of those levies—the excise duty. Philosophically I do not have a problem with indexation at all although it is interesting that the Government is happy to index this but not for example our tax thresholds. It will be interesting to know where the tax thresholds should be after 8 years of about 25 percent compound inflation under the current Labour Government.I will touch on what actually happens with that excise. First of all the consumer price index which the excise is based on is high now and is expected to be high well through the 3 percent band over the coming forecast term. This actually means that the cost to New Zealand consumers will go up but the way that the excise duty is implemented means that the smaller producer the producer of 40-odd acres of grapes—the small niche producer—will have to keep eating this margin the indexation of excise tax. Those producers will not be able to add that to their margin because there are price points in the wine market that the large producers are able to reach with their economies of scale—that is fine; there is an advantage for them. But when this thing turns down to 3.04c or something those producers actually have to keep eating that margin to maintain their ability to compete and sell wine. The House should note that the smaller winemakers in New Zealand are under a lot of pressure and this does not help. I am not arguing against indexation per se—I actually agree with it—but again inflation in New Zealand is so high that it has a higher compounding effect on winemakers and on growers than on other producers in New Zealand.National is supporting this first reading and the bill going to the Regulations Review Committee. Good on it. That committee will have an interesting job ahead of it. National will be supporting this view. Thank you Mr Assistant Speaker.