Volume 675 Week 82 - Tuesday 16 August 2011(continued on Wednesday 17 August 2011) 
Volume 675 Week 82 - Tuesday 16 August 2011(continued on Wednesday 17 August 2011) 
[Volume:675;Page:20681] 
Tuesday 16 August 2011 
( 
continued on Wednesday 17 August 2011 
) 
Freedom Camping Bill 
In Committee 
Debate resumed. 
Part 3 Enforcement miscellaneous and transitional provisions ( 
continued 
)  
The CHAIRPERSON (Eric Roy) 
: When the Committee lifted last evening Rick Barker had the call. He has just over 2 minutes remaining should he require it. 
Hon RICK BARKER (Labour) 
: 
 Mr Chairman I do wish to speak. 
Hon Simon Power 
: Of course he does. 
Hon RICK BARKER 
: I just want to take up this point. I am sure the Minister of Justice will be really intrigued to know that the bill as it is written says that in prosecuting an offence the prosecution does not have to prove that the defendant intentionally or recklessly committed an offence. It does not have to prove anything. All it has to do is prove that there was an intention to camp. This means a campervan can pull up pull on the handbrake and stop and the enforcement officer can say: “Well if you’ve stopped it means you’re not mobile and if you’re not mobile it means that you’ve got an intention to camp.” That is what it is—one intends to camp and they do not have to prove intent at all. 
But it gets worse—it gets worse. We now have as an offence something that “has caused or is likely to cause significant concern to the community and users of the area or land.” The word used is “concern”. There is no threshold or test for what this concern is. It does not have to be real. It can be simply imagined. A person says: “I have a concern.” and they do not have to prove the basis of the concern. Of course the person could go to court and say that they have remediated it—that is what the provision is—but how can one fix someone’s concern? If the person has a concern has an apprehension of concern all they have to do is say to the court: “I was concerned and the person could not take my concern away.” Bang—a $200 fine. 
But it gets better. When I read through this bill that old movie  
Alice’s Restaurant  
came back to me. We will have Officer Obie with his 27 eight-by-ten colour glossy photographs with circles and arrows on and a paragraph on the back and he will be asking questions of these freedom campers. This is what it is—Officer Obie is coming back. This has been brought back to us by the National Government and it is an assault on people’s freedom to camp as they go around the place. Blanket Man in Wellington a freedom camper is under threat. We will have Officer Obie everywhere with eight-by-ten colour glossy photographs with a paragraph on the back and circles and arrows and the prosecution of these people for intent. 
Dr CAM CALDER (National) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 66 
New Zealand National 57; ACT New Zealand 5; Maori Party 3; United Future 1. 
Noes 52 
New Zealand Labour 42; Green Party 8; Progressive 1; Independent: Carter C. 
Motion agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 271 in the name of Phil Twyford to clause 18 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 52 
New Zealand Labour 42; Green Party 8; Progressive 1; Independent: Carter C. 
Noes 66 
New Zealand National 57; ACT New Zealand 5; Maori Party 3; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 272 in the name of Phil Twyford to clause 26 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 51 
New Zealand Labour 42; Green Party 8; Progressive 1. 
Noes 66 
New Zealand National 57; ACT New Zealand 5; Maori Party 3; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 273 in the name of Phil Twyford to clauses 35 to 39 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 51 
New Zealand Labour 42; Green Party 8; Progressive 1. 
Noes 66 
New Zealand National 57; ACT New Zealand 5; Maori Party 3; United Future 1. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 267 in the name of the Hon Kate Wilkinson to Part 3 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 66 
New Zealand National 57; ACT New Zealand 5; Maori Party 3; United Future 1. 
Noes 52 
New Zealand Labour 42; Green Party 8; Progressive 1; Independent: Carter C. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 3 as amended be agreed to. 
Ayes 66 
New Zealand National 57; ACT New Zealand 5; Maori Party 3; United Future 1. 
Noes 52 
New Zealand Labour 42; Green Party 8; Progressive 1; Independent: Carter C. 
Part 3 as amended agreed to. 
Schedule 1 
The question was put that the amendment set out on Supplementary Order Paper 267 in the name of the Hon Kate Wilkinson to schedule 1 be agreed to. 
Amendment agreed to. 
Schedule 1 as amended agreed to. 
Schedule 2 
The question was put that the amendments set out on Supplementary Order Paper 267 in the name of the Hon Kate Wilkinson to schedule 2 be agreed to. 
Amendments agreed to. 
Schedule 2 as amended agreed to. 
Schedule 3 
The question was put that the amendments set out on Supplementary Order Paper 267 in the name of the Hon Kate Wilkinson to schedule 3 be agreed to. 
Amendments agreed to. 
Schedule 3 as amended agreed to. 
Schedule 4 
The question was put that the amendments set out on Supplementary Order Paper 267 in the name of the Hon Kate Wilkinson to schedule 4 be agreed to. 
Amendments agreed to. 
Schedule 4 as amended agreed to. 
Clause 1 agreed to.  
Clause 2 agreed to.  
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon KATE WILKINSON (Minister of Conservation) 
: 
 I move  
That the Freedom Camping Bill be now read a third time 
. Freedom camping is a valued tradition in New Zealand as we have heard and this Government wants to ensure that it stays that way. It is unfortunate that we need this bill but we do. We want freedom camping to continue and for that to happen it needs to be managed before communities lose their patience. We are an outdoors destination the land is the cornerstone of our identity and we have always welcomed tourists who want to share in its grandeur. We want to retain our natural beauty and not to see our most pristine spots degraded by human waste and rubbish. 
This bill is about protecting our environment and our reputation. It allows local authorities and the Department of Conservation to better protect our most popular tourism destinations so that everyone can enjoy them. The presumption is that people can camp unless a location is specifically restricted. Councils cannot issue blanket bans across their districts as some have claimed. This bill is purposely pro-camping as we recognise that the majority of freedom campers are responsible and take great care to clean up after themselves. But where freedom camping is causing very real issues councils and the Department of Conservation now have the tools to act. The introduction of an instant fine is simple: if someone is caught camping where they are specifically prohibited from doing so then they can be subject to a fine. At the moment if a prosecution is undertaken it costs the ratepayer or the taxpayer over $10000. It is far more efficient and effective to simply have the tool of an instant fine than to have the matter drag through the courts. 
The genesis of this bill is a case study undertaken in collaboration between private industry local government and central government. In December 2007 the Tourism Industry Association established a forum aimed at better management of vehicle-based freedom camping. It has become known as the New Zealand Responsible Camping Forum. Its members are made up of all the relevant industry bodies and Government agencies. The forum succeeded in achieving a unified stance on how best to manage freedom camping with a mix of regulatory and non-regulatory tools. The members of the forum have and will continue to develop and distribute excellent communication and education materials including print news media and standard signage. 
In its submission to the Local Government and Environment Committee the Tourism Industry Association noted that all members of the forum agreed that some degree of enforcement is required to enhance their non-regulatory approaches in order to help campers to take responsibility for the care and guardianship of the environment and our communities. It pointed out that the forum has been under increasing pressure to help establish a nationally consistent enforcement regime that can be used to fine campers who deliberately camp in places or in ways that are not tolerable for communities. It was felt that this would act primarily as a deterrent while providing a tool for land managers when deemed absolutely necessary. Used wisely a nationally consistent enforcement regime will support the information-based approach and help to remove community tension that has grown from a sense of powerlessness when campers have ignored local advice and direction. 
The Minister of Local Government the Minister for the Environment and I in my role as the Minister of Conservation have worked together to respond to the needs identified by the forum the wider community our tourism sector and the needs of our environment. This bill is a result of that collaboration. 
I again thank the select committee for its fine work to ensure that measures intended to address the worst excesses of freedom camping did not undermine freedom camping as a valued Kiwi tradition. As we have always said this Government is committed to ensuring this tradition continues to be available to those who camp responsibly. We are committed to ensuring that local councils and the Department of Conservation are able to address problems where they have arisen. 
The Tourism Industry Association stated: “Forum members have been unanimous in their belief that strong clear and targeted camping information is the cornerstone for achieving responsible camping practices in New Zealand. The strongest long-term gains will come from developing a culture of environmental care underpinned by national and local visitor-friendly information”. I agree with these views. The tools provided through this bill are additions to not replacements for the broad range of tools that are needed to encourage responsible freedom camping. My department and local authorities will use the enforcement tools only when there are real issues and when these tools are the most appropriate and proportionate way of dealing with them. I encourage camping and I look forward to a future where communities secure in the knowledge that freedom campers will camp responsibly happily roll out the welcome mat. I commend this bill to the House. 
PHIL TWYFORD (Labour) 
: 
 Let me for the record state again that Labour acknowledges that we have a problem with the dumping of waste on the roadside in some of our country’s most scenic areas. We acknowledge this is an issue that needs to be addressed but we have come strongly to the view that the Freedom Camping Bill is ill-conceived badly thought through and bad law that must be opposed. 
What does this bill do? It gives councils the power to declare large parts of their territory to be off-limits for freedom camping. It installs an enforcement and compliance regime for not only the dumping of waste and littering but also freedom camping itself. It is a joke that this Minister stands up and tries to portray this bill as some kind of Magna Carta for freedom campers. It is not. It is the opposite. It undermines freedom camping and it threatens the freedom that generations of New Zealanders have enjoyed to get out in the countryside to park on the side of the road and to sleep a few hours before heading off for a weekend of fishing surfing pig hunting—you name it. 
We have two chief concerns. The first is that this bill is disproportionate. It is a sledgehammer to crack a nut as Kevin Hague said in the first reading debate on this bill. As I said it gives councils the power to declare large areas off-limits to freedom campers and we have had considerable debate over the last few hours about whether that gives councils the power to effect blanket bans. The bill says no it does not allow councils to effect blanket bans but the reality is that they can declare large swathes of their territory off-limits for freedom campers. The Minister has failed to answer the question we put to her and that is what percentage is acceptable or not acceptable? Is 98 percent of the territory off-limits to freedom campers a blanket ban or not? 
At the Local Government and Environment Committee we heard that a number of councils have in the current system actually set out to effect blanket bans. The Thames-Coromandel District Council through its own by-laws has effectively instituted a blanket ban. The Dunedin City Council came to the committee and gave us quite a detailed presentation. It too has effectively outlawed freedom camping in its territories. So the political will is there when councils decide for whatever reason that it is too much hassle it is too much problem and we do not want freedom campers in our territory. By giving councils such an efficient mechanism as is in this bill councils will have much greater ability to prohibit freedom camping in their territories. The result is that this will affect many New Zealanders—pig hunters surfers fishers climbers trampers—who probably do not live in those areas and therefore are not ratepayers or local voters but they are New Zealanders who currently have the right to go freedom camping and enjoy the country in that way. 
Are we demonising councils by suggesting that they will use the law in this way? I do not think we are. Who in this House has experience of councils using traffic laws for revenue generation? Do we have any examples of councils using bus lanes to generate revenue? Yes we do. It is not inconceivable that councils in an attempt to get cost recovery under this law will go out there and have officials banging on the windows of campervans that are parked on the side of the road and pinging people with a $200 instant fine. So we believe that this law is disproportionate. We also are of the view that it is badly drafted and this is not a complaint against the officials; it is a complaint against their political masters for the woolly unfocused and badly thought through policy that they have asked the officials to implement. 
Clause 11 talks about one of the criteria that a council would have to satisfy before it passed a by-law to ban freedom camping and that would be to protect the area. What the heck does “protect the area” mean? It also says the local authority must be satisfied that the by-law would address a perceived problem in the area. Well perceived by whom? Clause 11A states that by-laws must not absolutely prohibit freedom camping. This is the Alice-in-Wonderland clause. Just because it says the by-laws must not absolutely prohibit it does not actually prevent them from banning freedom camping in 98 percent of that territory. 
Stuart Nash pointed out that clause 5(1)(a) defines freedom camping as sleeping out under some temporary structure a caravan or a campervan. But sleeping under the stars is perfectly acceptable under this bill. It is an absolute nonsense. Further on in the bill it makes it an offence to make preparations to camp and as Rick Barker pointed out what does that mean? Does it include pulling the handbrake up getting one’s jamies out of the suitcase or putting on the burner to make a cup of tea? Is that “making a preparation to camp”? So not only the campers of New Zealand but also the law enforcement officers of councils all over New Zealand will have a field day with this bill. 
One of the most odious parts of this bill is the seizure and impoundment of property provisions. We have already discussed the advice from Sir Geoffrey Palmer as chair of the Legislation Advisory Committee. He told the Government and the select committee that the seizure and impoundment provisions were inconsistent illogical and would not achieve their stated aims and that they provide a perverse incentive for people to commit an offence in a tent rather than a campervan. In fact they are an assault on the property rights of New Zealanders because they place the onus on the persons who have had their property seized to prove or establish that the property will not be used in any ongoing offending. That is just one of the many defects in this bill. 
Associate Professor Kenneth Palmer made a really interesting submission to the select committee. He stated: “I consider the message given by the legislation is one of punishment which is likely to affect many international tourists as well as local persons. The effect on international tourists may be to change the image of New Zealand as a freedom area and to impose on visitors significant fines and even the seizure of vehicles which may not be justified on the merits of the situation.” He pointed out that local authorities have been in breach of the duty imposed under the Litter Act to provide receptacles in public places. That is consistent with the case we have been making all the way along that practical measures like the provision of more public toilets and rubbish bins in these scenic out-of-the-way places would be a much better response than this sledgehammer bill from the National Government. 
My opening comment was that this bill is misnamed. It has about as much to do with freedom camping and preserving freedom as Ronald Reagan’s “Clear Skies Bill” did when in the 1980s he gutted pollution controls on industrial polluters. This should be called the “Anti-Freedom Camping Bill” “National’s Nanny State Camping Bill” or “The Day National Killed the Kiwi Road Trip Bill”. Those would all be much better titles. We live in a complex highly regulated society and it is important that as legislators we carefully consider the balance of rights and responsibilities and the potential unintended consequences of laws that we pass. 
It is our case that this bill seriously undermines and curtails the freedoms that New Zealanders have enjoyed for generations to enjoy the great outdoors without having some council law enforcement officer knocking on the window of their campervan— 
Hon Ruth Dyson 
: With their clipboard. 
PHIL TWYFORD 
: —with their clipboard at 2 o’clock in the morning telling them to move on or slapping a $200 infringement notice on their windscreen. It is bad law it should not be passed and we think the Government is making a real mistake with it. 
Dr CAM CALDER (National) 
: 
 I start with the underlying premise that the default position of the Freedom Camping Bill is that freedom camping on public land is allowed subject to the legislation. I thank the Hon Rick Barker for his colourful contribution. I think he brought in allusions to Arlo Guthrie’s “Alice’s Restaurant Massacree” in a previous contribution. The Hon Damien O’Connor made a number of contributions some of them more considered than others but I do not feel he along with Mr Phil Twyford understands the full problem that indiscriminate defecation in our areas of outstanding natural beauty is posing to local residents local authorities the Department of Conservation and of course the unwary traveller. Who wants to step out of their van or off their motorcycle into a pile of steaming human waste or ordure? I do not mean to make light of this issue. It is a significant problem to a large number of communities around our beautiful country. 
Phil Twyford 
: Cam you know you don’t support it. 
Dr CAM CALDER 
: I have as Mr Twyford has signalled many times driven through the night and parked at an appropriate spot ready to get an early start on a tramp hunting trip or fishing trip and I would expect to still be able to do that. This is basically a tool. It is a tool that we have given councils which told us they were desperate. The Hon Maryan Street and the Hon Steve Chadwick admitted in their speeches yesterday that there is a huge problem here. They knew about the problem. The mayoral forum told them about the problem but what did they do about the problem? 
Hon Members 
: Nothing. 
Dr CAM CALDER 
: Nothing. What did they do about the problem for many many years? 
Hon Members 
: Nothing. 
Dr CAM CALDER 
: Nothing. We are doing something to address a major concern to communities and local authorities the length of our country. 
I will close with a comment from Lawrence Yule who is President of Local Government New Zealand and who said: “Many communities are sick of having to bear the wasteful cost of cleaning up the mess left behind by irresponsible freedom campers”. He said that although many communities did not have a freedom camper problem the bill would be a country-wide tool giving all councils the option to identify areas where camping should be prohibited and enforcement options available. This bill is a fine tool giving the councils local authorities and the Department of Conservation the appropriate methods they need. I commend this bill to the House. 
KEVIN HAGUE (Green) 
: 
 I rise to take a call in the third reading of the Freedom Camping Bill. I was disappointed to miss the Committee stage because it was clearly a lively debate to which I had wished to contribute many remarks. It was very interesting to hear the Minister of Conservation refer in her remarks in her third reading speech to the consultation process that she says led to the construction of this bill. What a shame that that process did not involve trampers hunters and mountain bikers—all of those who will be so terribly affected by this ridiculous bill. 
I will give eight main reasons—I raised five fingers but really there are another three—why this is such a bad bill. The first of those reasons is that it penalises ordinary Kiwis for doing things that are an important part of our way of life. We have heard a lot about that so far in the debate in the House at all stages. 
The second point is that the things this bill penalises are already offences. They are already against the law so what actually is it about this bill that will be more effective than all of the previous penalties and offences? There is absolutely nothing. The idea that in some way the bill will deal with this problem is based on an entirely fanciful notion. It will not work. 
The third thing is that there are certainly some issues associated with a small minority of people who have campervans that do not have toilets and who park overnight in a location where there are no suitable facilities for them. But in those exact same places there are day visitors who may also get caught short. It is the absence of facilities that is the problem not the freedom camping activity. This bill does nothing to deal with that problem either. The Rugby World Cup is coming along and then there will be plenty of day visitors too. 
The fourth point I will make is one that I made strongly in the second reading debate which is that it would have been so much better to use a non-regulatory approach to this issue because regulatory approaches are appropriate in situations where people do not want to comply with a direction they know to be the best one. In this case visitors to our country actually want to look after our environment. The correct approach is to make that easy for them to do not to penalise them for not doing it. There would have been plenty of other ways to do that. 
The fifth reason is an important one and I raised it in the second reading debate hoping that it would achieve a little bit more media coverage than it did. There is a problem with this bill: it gives the impression of validity to existing territorial local authority provisions related to freedom camping. In fact the bill does not add any greater legal status to those provisions. The Local Government and Environment Committee heard that those provisions already enacted by territorial local authorities in very large number would be found by a court to be invalid because the existing law requires that territorial local authorities pass by-laws about these matters only in those locations where there is a demonstrated problem and only where the by-law is the best means available to deal with that problem. 
That is not the approach that territorial local authorities have taken. We see territorial local authorities that have imposed blanket bans. The provision in this bill that says a territorial local authority may not impose a blanket ban is all well and good but people should recognise that that is just for the sake of clarity. It does not change the requirement that there has to be an actual problem in a specific location that a response has to be the best way of dealing with that problem and that the response has to be proportional to the problem. What we have seen for the most part is responses that do not meet that formula and that will fail in court as soon as they are challenged. 
The next point I come to is the impracticality of this legislation. Again I was stupefied to hear from the Minister of Conservation today in this debate that this bill has emerged as a result of consultation with those who will be enforcing it because I see this bill as one of the least enforceable I have seen certainly in my time in Parliament and in my time of observing Parliament over many years. This bill is impractical and it will be found to be hard to enforce or at least hard to enforce without giving the impression to all users of our back country and natural places—Kiwis and visitors alike—of pervading officiousness. I think that is the culture we are likely to see emerge as territorial local authorities and the Department of Conservation come to try to implement this ridiculous bill. 
The seventh point I make is in response to one that the Minister of Conservation Kate Wilkinson and the Minister for the Environment Nick Smith made in response to my first reading speech and that Nick Smith made again in his second reading speech in which he appeared to be completely unable to distinguish between the effects of the extremely small infinitesimal impact of this particular problem of freedom camping on freshwater quality in New Zealand and the effect of dairying intensification on freshwater quality in New Zealand. Nick Smith Minister for the Environment seemed unable to distinguish which of these impacts was the larger. He seemed to say that they were comparable. I tell the House that they are not comparable. The impact for example of the planned extra 1 million dairy cows in the intensification planned for this country will be equivalent to an extra 14 million human beings with all of the consequent environmental impacts on our fresh water and without the treatment systems that exist for human beings. 
The eighth point I make—and it is one I made in both the first and second readings but I will reiterate it—is about the impact this bill will have on our overseas visitors. This is a bill that this Government is rushing into place for the Rugby World Cup but for all of those overseas visitors coming to visit our country instead of the welcome mat being rolled out this Government is choosing to roll out a “Not Welcome” mat a “Keep Off the Grass” sign in neon lights. It is entirely the wrong approach. This Government could instead have actually used the Sanitary Works Subsidy Scheme to recognise the fact that visitors to our country and Kiwis using the back country contribute very substantially both to local economies and to our national economy. Therefore it is reasonable for local economies through territorial local authorities and for the national economy through the Sanitary Works Subsidy Scheme to fork out just a little bit to provide the extra facilities required in popular spots for freedom camping and to use a little bit extra to provide education about where those places are. That is exactly the approach that Tourism New Zealand was following and it is exactly the approach that this Government should have continued to follow had it not lost its nerve. 
This is a bad bill. It is bad from start to finish and this House and this country will regret it. 
KELVIN DAVIS (Labour) 
: 
 Part of New Zealand’s heritage is at stake here. New Zealanders have always been able to go and participate in the outdoor environment and camp as we have heard get up in the morning and go off and do some form of activity. That is now in jeopardy because of the Freedom Camping Bill. What we should be doing is focusing on the people who are dumping effluent and who are dumping waste and rubbish around camping areas. We should of focus on them not on the act of parking up and resting overnight or sitting in a car or lying in a tent or caravan waiting to do some sort of activity the next day. I have to say that Kevin Hague has covered the issues really really well. They are well-thought-out and he is right. 
One of the main points I want to pick up on is the whole enforcement of this bill. If we take the Far North District Council for example we see that it is responsible for an area the size of Israel. It has four service centre towns and about 30 or 40 little villages and hamlets. The problem is that there are no facilities around those towns and hamlets to cater for freedom camping. We need to be looking at the facilities but instead we are pinging people. We should be looking at the facilities. But in respect of enforcement the Far North District Council will just not have the staff to cover that whole area to cover the 30 or 40 towns and the four main service centres. It will not have the staff. It struggles with staff anyway just to do less controversial tasks yet here we are expecting that somewhere in the middle of the night someone will go around popping up and knocking on the windows of caravans or cars or calling out from outside a tent to tell people to move on. That is just ridiculous. It will not happen. It is a nonsense to even include this measure in the bill. It will not happen in areas such as the far north. 
Last night we covered the issue of notification—informing New Zealanders and overseas tourists about the areas where they can or cannot camp. We have heard that those areas will be published in the  
Gazette 
 which is a publication I have to admit I have never read. I have never read it I have never seen it and I would not know how or where to access it. As the Hon Rick Barker said how on earth will people from overseas know where to access that publication and find out where they can or cannot park up for the night? Not only that but those areas will be notified in the daily papers of Auckland Wellington Christchurch and Dunedin. I do not know in which edition and I do not know on which date the information will be published. But if it is published today how will someone who turns up in New Zealand next week know where to find out where they can or cannot freedom camp? They will not know. It is not like it will be the headline on the front page of the  
New Zealand Herald 
 or the  
Dominion Post 
; it will be tucked away somewhere in the back pages. No tourist is interested in looking through the “For Sale” signs and the “Places to Rent” notices in order to find a little notification as to where they can or cannot park their caravans overnight. Those parts of the bill are silly. In fact we say the whole bill is silly. 
We still do not know about the blanket bans. We see that the bill says that there are to be no blanket bans. Local authorities will not be able to put blanket bans on freedom camping but that means that they may be able to exclude just a little area—a car park or a couple of car parks in one little town—and say that they have not put in place a blanket ban over the whole of the area. And they would be quite within their rights. So there is actually no definition of what size the blanket ban can be. Again we say that this is a nonsense. 
The bill is jeopardising the way of life for New Zealanders. Freedom camping is something that we have been able to do since as I said last night my tupuna Kupe turned up on the shores of New Zealand. He was New Zealand’s very first freedom camper because when he turned up and parked his waka up on some beach he did not actually stay there build a permanent structure and live there for the rest of his life; he circumnavigated the whole of the North Island naming places around the whole of the North Island. 
Dr Rajen Prasad 
: Before there were some trains there. 
KELVIN DAVIS 
: Ha ha! So he circumnavigated the whole of the North Island before heading back off to Hawaiki. It is something we have been able to do since humans first set foot in New Zealand. 
I was just talking to my colleague Mita Ririnui about the absence of facilities and how his rugby club—he says it is the best rugby club in the Bay of Plenty the Rangataua Rugby and Sports Club—is right on the shores of Rangataua Bay. He says that in the summer the club opens up its ablution blocks and facilities to allow people to camp on the sports field which brings in income for the club. I think we need to do more of that all around New Zealand. There are numerous little sports clubs little schools and marae that could benefit from some extra income if the facilities could be upgraded so they are of a reasonable standard for campers to use. There we go. There is a way forward to create the facilities for freedom campers to use and to enjoy. As Mita Ririnui was saying at Rangataua Rugby and Sports Club they have been doing that for the last 40-odd years and people have returned year after year after year. 
So what we need to do is to encourage local government. If we had that subsidy scheme that the National Government canned to help improve facilities if there were joint ventures with sports clubs maraes and schools we could have a whole network of excellent facilities all around New Zealand that freedom campers could use. They would not have to park in car-parks in Nelson as I heard and in other towns. We would have more facilities that could be looked after and used and we would not have the problem of people just parking in lay-bys and places like that. There is a lot more that could have been done. This bill is not really very specific. It does not address the real issue which is the dumping of effluent and rubbish. Instead of targeting people who actually break the law—laws we already have—it is actually making criminals of people who just need to park up before they head off to their recreational activities or move on to the next part of the country they want to see. 
Finally I will finish off by talking about the effect on tourists and tourism. Free and independent travellers land in New Zealand get into their campervans and head off around the country. The last thing we want to happen to them when they get back to their country of origin is for them to get a bill in the mail for $200 because they unwittingly parked somewhere on the side of the road and somebody took down the number of the vehicle. What sort of lasting impression of New Zealand will that be for them? We want those people to go back to their homeland and tell their friends and family what a great place New Zealand is and then those friends and family will visit New Zealand on that recommendation. Visitors will not be recommending much if they have got a silly little fine of $200—well it is not actually very little—when they get home. They will think what a miserable place New Zealand is. Kia ora. 
HILARY CALVERT (ACT) 
: 
 I rise to take a call on the Freedom Camping Bill. I commend this bill to the House. 
NICKY WAGNER (National) 
: 
 I rise to support the third reading of the Freedom Camping Bill. Listening to the speakers on the other side of the House one would think that we were talking about two different bills. The Freedom Camping Bill is all about keeping New Zealand clean and green so that all New Zealanders and visitors can enjoy our beautiful natural environment and it amazes me that parties such as Labour and the Greens which profess to want to improve our environmental standards and to give credibility to our “100% Pure New Zealand” brand will vote against it. That does not make any sense. They acknowledge that there is a problem but they have spent all their time trying to find reasons that legislation will not work rather than looking for a useful solution. 
This bill responds to a serious environmental problem and pollution issue—that of dirty and careless campers who are despoiling our natural environment. Nobody wants that. Nobody will go home to their country and say what a beautiful clean country New Zealand is if they have stepped into other people’s waste. New Zealanders do not want a small number of irresponsible campers spoiling our right to enjoy our beautiful country or giving us a bad reputation internationally. 
In debating this bill the Local Government and Environment Committee found a practical common-sense way to balance two great Kiwi traditions. The first is the right to go freedom camping and the second is our wish to look after our natural environment. I believe that we have got that balance right. The bill for the first time enshrines the right of New Zealanders to go freedom camping as a default setting. New Zealanders can camp as of right on public land and Department of Conservation land unless there is a good reason not to allow it. 
The restrictions are within limited geographical areas which the Opposition seems to have forgotten all about or does not understand. In creating these by-laws authorities need to prove that there is a real problem. This bill ensures that they can no longer impose blanket bans and it will give consistency across the country. The questions that the Opposition has been asking about the percentage are nonsense because authorities can impose those by-laws within only very limited geographical areas and the select committee tightened those up even more. 
It has long been illegal to camp in some specific areas and to deposit litter and human waste on the roadside and for very good reason but there has never been an effective or efficient way of enforcing the law. This bill provides for instant fines which are a common-sense way to ensure responsible freedom camping so that all of us—New Zealanders and visitors alike—can enjoy our beautiful natural environment. I commend this bill to the House. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 I rise to speak to the Freedom Camping Bill. As New Zealanders we are justly and rightly proud of the reputation New Zealand has as a clean green country but unfortunately some people take advantage of that reputation. New Zealand has a reputation of encouraging our citizens to see our country before they see the rest of the world and also we are keen to let the rest of the world come here and see our beautiful country. Unfortunately some people take advantage of that and we have a problem with freedom campers who are unable to decide what to do with their litter and their waste. This bill sets out a very good way of dealing with that issue. It allows local authorities to pass by-laws not only to allow freedom camping but also to make sure that it is done within limits. I think that is a good idea. The Maori Party thinks this is a good bill and I commend it to the House. 
Hon DAMIEN O’CONNOR (Labour) 
: 
 It is nice to speak towards the end of this debate on the Freedom Camping Bill; hopefully I will have the final word. The last speaker Rahui Katene said that there is a problem with freedom campers. No; there is a problem with effluent disposal and there is a problem with infrastructure. It is quite bizarre that in the year of the Rugby World Cup when we are hoping to welcome tens of thousands of extra people to this country we are rushing through Parliament legislation that will cut right across what we have told those people about New Zealand and their experience in New Zealand. 
It is quite outrageous that a Government that is prepared to spend hundreds of millions of dollars on stadiums up and down this country has not been prepared to spend any money on basic toilet infrastructure for the tens of thousands of people who come here. This Government cut the Sanitary Works Subsidy Scheme in which central government assisted local government to put in place proper toilet facilities where necessary. This Government cut that scheme spent hundreds of millions on stadiums and has gone out marketing around the world saying: “Come and enjoy New Zealand. Come and enjoy our Rugby World Cup. But if you park in that particular spot you are likely to get a note after 5 days from the rental car company to your permanent address in which case you can respond.” 
The point is that Supplementary Order Paper 267 brought in by the Minister of Conservation is so complex and so bizarre—it prescribes the way that the rental car companies can charge any fine—that it makes a mockery of anything the National-ACT Government supported by Peter Dunne says about compliance costs the nanny State and regulation. This is the worst that I have seen in this Parliament. 
We have an issue. We have had an issue for quite a while. Actually it is not just people who camp at night; it is people who want to go to the toilet during the day in their travels up and down New Zealand. But this bill does not say we will look at the outcomes and the adverse effects and try to address them. It says we will just say point-blank that people shall not camp in certain places. Discretion has been given to the councils and we have had assurances that it will be only where the council identifies a problem. Well the council might say that it gets a few rubbish bins that are filled up in a certain place and it costs a bit to clear them so it will just declare that place “No Camping”. It will save the council the cost of clearing the rubbish tins. That will be sufficient for a council to make a blanket ban. That is quite bizarre in a country that has prided itself on outdoor experiences. 
Mr Assistant Speaker Roy you know full well that with regard to these things to quote Robin from Copperfields last night: “Well that is the fun of New Zealand.”—being able to go out park up and be responsible. Yes we have an issue around education and around infrastructure. For the growing number of people who come to New Zealand and go out and have less understanding of effluent disposal perhaps we need to educate them. But this bill attempts to educate New Zealanders by putting notices in the  
Gazette 
—a very widely read newspaper as colleague Mr Rick Barker said! Notices will also be put in key metropolitan newspapers. Those notices will educate the people of New Zealand as to where they cannot freedom camp. 
Hon Ruth Dyson 
: Everyone reads them! 
Hon DAMIEN O’CONNOR 
: I know they do—particularly those people out in the regions where in fact they have the camping spots next door to them! They will not have any idea. 
This prescriptive bizarre Draconian autocratic legislation will kill the image that New Zealand has around the world as a place of relaxation of freedom and of an experience that truly is unique. We have been marketing New Zealand for close to 100 years I guess and trying to encourage people to come here. This bill will cut right across people’s expectations. The one thing that will destroy New Zealand’s reputation is expectations that are not met or worse still when the reality is completely contrary to what people have been told. 
Hundreds and thousands of campervans have upgraded. They are modern and fully self-contained. Technology has meant that there is virtually no impact from them particularly if they are able to dump at proper dump stations. What will those campervan companies say to their clients? Will they say: “Come and hire our beautiful campervan but actually it is not much better than a car because you’re going to have to go to the main centres to camp or to a camping ground.”? It is ridiculous and it cuts across all our efforts for many many years. 
I have to finish by saying that it is worse than nanny State. It is legislation that is supported and developed as a knee-jerk reaction from a senior Minister in Cabinet Nick Smith. I have to say I am rather sad that the Hon Peter Dunne has supported this because he has championed the rights of outdoor users of fishermen and of trampers for many years. He knows that these people are very offended by this legislation and he should be opposing it. I hope he will because his constituency the people he has fought for will be absolutely gutted when they get a letter in the mail or are told: “Move on sonny. You are not allowed to camp here. Move on down the road.” 
These people know the outdoors. They know what to do. They probably have a shovel in their car. They probably know where to go to go to the toilet. But no the “poo police” will be knocking on the door of their tent or their campervan and saying: “Not allowed to camp here sorry. There’ll be a fine in the mail—an instant fine.” That is bizarre. 
This is a country of 4 million people and it is the size of the UK. How will people from the UK comprehend the Draconian the autocratic and the nanny State legislation we are just about to pass in this House? I think it is a serious backward step. There are better ways of dealing with this problem and making New Zealand a welcoming place for visitors and for the tens of thousands of people who will come here for the Rugby World Cup. We have rushed through this legislation and I think it is quite bizarre. 
LOUISE UPSTON (National—Taupo) 
: 
 I am very pleased to be able to speak in the third reading of the Freedom Camping Bill and to answer some of the issues or the misinformation that has been spread by members on the other side of the House. It is great to be able to get the record straight. 
The Freedom Camping Bill is a very practical bill. It solves a practical problem that affects not only visitors to this country but more important local residents of places that are popular for overseas guests to camp. One of the things the Opposition members have not really got their head around is the shift of the presumption of where people can camp and where they cannot. I would suggest that one of the reasons the councils currently have by-laws that put blanket bans in place is that they have not had any practical tools to deal with the problems. That is exactly what this bill delivers. So the first point is to say that this bill changes the presumption to say that people can freedom camp anywhere unless there is a local council by-law that says otherwise. 
I know it is not normal in the third reading but I want to bring the House’s attention to clause 11(2)(a) which states the reasons under which a council can make a by-law. They are “(i) to protect the area: (ii) to protect the health and safety of people who may visit the area: (iii) to protect access to the area;”. But the key phrase in clause 11(2)(b) is—and the Local Government and Environment Committee did a significant amount of work to get this wording right so I do want to thank the officials both from the Department of Internal Affairs and the Department of Conservation—that “the by-law is the most appropriate and proportionate way of addressing the perceived problem in relation to that area;”. 
That provision means that an authority cannot pass a blanket by-law. This is an example of one of the concerns the Federated Mountain Clubs raised with us. So for those who are interested in hunting fishing and tramping we answered their concern by saying the presumption that they can camp is stronger—this allows them to camp. We also redefined “freedom camp” so that it does not apply to someone who has been travelling overnight and sleeps and rests in their vehicle to keep their driving safe. 
But the main point I want to make is that this is about protecting the right of New Zealand families to camp. I want to give a personal example. I was raised camping by the lakes by the rivers and by the beaches. I remember times with my son when staying in a camping ground was not affordable for me at that time. So we would pack up the borrowed tent jump in the car and drive to a place that was yet undiscovered. 
This bill protects the right of New Zealanders to have those kinds of adventures in this country because it will stop the blanket by-laws. It is all about giving councils the tools so they will not have to put blanket bans in place like they have to today. They can give people an instant fine; this bill gives councils a tool. This makes it consistent for the local council and the Department of Conservation and that is why this bill is a nice practical bill that protects New Zealanders’ long-fought-for ability to camp in the great outdoors. Thank you. 
Hon RUTH DYSON (Labour—Port Hills) 
: 
 I am pleased to speak in this final stage the third reading of the Freedom Camping Bill—a completely inappropriately named bill sadly. I want to acknowledge the work of the Local Government and Environment Committee and I agree with the member who has just resumed her seat Louise Upston and her point. The select committee did work very hard together to try to resolve the concerns we had about the bill. Unfortunately despite our best efforts that was not successful. 
Everybody on the select committee and I am sure everyone in this House agrees that there is a problem when people litter and pollute our beautiful environment. The old National the traditional National would have said in the past “There is a problem. What’s a practical common-sense way of fixing it?”. In fact the Hon Peter Dunne may in the past have been inclined towards that approach as well. But instead we hear National saying “We have a problem and oops we have the Rugby World Cup coming. Let’s bring in Draconian legislation that gives local authorities and the Department of Conservation huge powers that really undermine the whole image we want to portray internationally at any time but particularly leading into the Rugby World Cup.” So this is exactly the wrong time to be using this sledgehammer to resolve the problem. 
We could have phased out the sort of campervans that cause the problem. We could have reinstated Government financial support for local authorities to install more toilet facilities where there are problems around the country. Instead we have this huge power being given to local authorities so that they can say that massive parts of their district are not allowed to be used for freedom camping and very significant fines—not just for littering but for dumping of waste and actually for freedom camping itself—can be given. 
It is to my regret that despite the best of efforts across all four parties represented on the select committee we were not able to get a resolution to this problem. We are now giving the wrong message from our Parliament about how we would like visitors to come to our country and enjoy and cherish our beautiful outdoors. Supplementary Order Papers 271 272 and 273 proposed by Phil Twyford would have done that but unfortunately National has maintained a very rigorous approach to Supplementary Order Papers from Labour and has just said “It is Labour; we will vote against it.” I think that was foolish particularly when we were looking at legislation where we agreed there was a problem and when we tried very hard at the select committee to get a good resolution. The officials worked extremely hard and I know they understood the tensions that arose between our desire to send a strong message about wanting our clean environment to remain so and our desire to not punish or even give the wrong message to people who have enjoyed freedom camping as part of our New Zealand culture. That is what we are doing with this legislation and I regret that we are progressing in this manner. 
A party vote was called for on the question  
That the Freedom Camping Bill be now read a third time. 
Ayes 67 
New Zealand National 57; ACT New Zealand 5; Maori Party 4; United Future 1. 
Noes 53 
New Zealand Labour 42; Green Party 9; Progressive 1; Independent: Carter C. 
Bill read a third time. 
Student Loan Scheme Bill 
Second Reading 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Student Loan Scheme Bill be now read a second time 
. This bill represents a significant shift in the way the student loan scheme is administered with the aim of making it easier for borrowers to manage their loans and to pay back what they owe when they should. Currently complying with this scheme is complex and its administration has its own complexities as well. Borrowers have to deal with different administrations at different stages of their loan which can result in confusion for borrowers about their immediate repayment obligations and their overall loan balance. The repayment system is also heavily dependent upon inflexible paper-based communication systems which make it difficult for the Inland Revenue Department to communicate with borrowers who move address frequently or who go overseas. Further the process of annual assessments for determining borrowers’ loan repayments results in complicated annual interaction with borrowers. 
This bill introduces a suite of measures to deal with these problems and to help the Government better manage this $11.1 billion Crown asset. To recap briefly the first of these measures sets the framework for consolidated loan information to be provided electronically to borrowers by the Inland Revenue Department. That will enable borrowers to access information on their loan balance and to manage their repayment responsibilities from anywhere in the world at any time. It also means that borrowers who are currently studying will no longer have to contact two agencies for this information as they do now. The overwhelming majority of borrowers will also benefit from the removal of the current annual end-of-year assessment if their income is from salary and wages only and if their before-tax income is over the pay period repayment threshold. The Inland Revenue Department will instead treat loan repayment deductions from a borrower’s salary or wages as being correct and final for the pay period although borrowers will be able to get a refund if they have significantly overpaid their pay-period obligation. The result will be a student loan system that is simpler easier for borrowers to understand and to comply with and more cost-effective for the Inland Revenue Department to administer. 
Finally the bill introduces changes to simplify the current penalty rules that apply when borrowers fail to make their loan repayments when they should. These include measures to help prevent penalties for non-payment or underpayment from reaching levels at which borrowers perceive them as an insurmountable barrier to paying off their debt. At the same time of course the bill recognises the importance of borrowers honouring their debt. Consequently a Supplementary Order Paper to the bill serves to strengthen the Commissioner of Inland Revenue’s ability to recall a loan in cases of serious non-compliance. These are the main features of the bill. 
I acknowledge the work of the Finance and Expenditure Committee when it considered the bill and I recall for the House the fact that while the bill was before that committee the Inland Revenue Department identified some measures where the original application dates needed to be delayed until 1 April 2013 to allow more time to implement changes in the Inland Revenue Department’s existing systems. The measures that are affected by this are the new interest and penalty rules that I have just mentioned certain payment priority changes and changes that will move the system away from the tax system’s period-based debt approach to a whole-of-debt approach which is more akin to a mortgage. Although the application dates of some parts of the bill will be delayed the application dates for the proposed changes that benefit borrowers such as the provision of a consolidated view of their loans will remain unchanged. 
As I say I acknowledge the work of the committee in its careful consideration of the proposed reforms and for the flexible approach it has taken to allow amendments to be made in order to help the Inland Revenue Department to implement the necessary changes the bill introduces. The result will be a simpler more effective way for borrowers to self-manage their loan responsibilities and a more efficient cost-effective framework for the Inland Revenue Department to manage its interactions with all borrowers in New Zealand and overseas. Therefore it is with great pleasure that I once more commend this bill to the attention of the House. 
DAVID SHEARER (Labour—Mt Albert) 
: 
 The Labour Party will be supporting the Student Loan Scheme Bill although we are opposed to one element of it which I will get to as I go through my remarks. As this bill went through the Finance and Expenditure Committee I think that it generated a degree of debate—not hostile debate but debate in terms of how we can make our student loan mechanism work much more effectively. As the Minister of Revenue just said making this system less paper-driven and streamlined in terms of the agencies that students go to—bringing those down from two to one—and certainly making it easier for students to be able to repay their loans particularly those students who have gone overseas is all good. 
The average student loan at the moment is nearly $7000 per student and about 587000 students have loans. As Minister Dunne just said about $11 billion in total is designated—curiously—as a Crown asset. I suppose in many ways it is an asset. These people are going through tertiary education which is a right that we are pleased about. 
Amy Adams 
: The debt is an asset. 
DAVID SHEARER 
: Yes I was looking at the word “asset” and using the word in terms of what we have and in terms of investing in our future. That is very important in terms of what New Zealand has been able to do throughout the history of tertiary education which is basically to provide easy access for students to be able to get to university and have that right of a good tertiary education. It is a very high-quality tertiary education. 
But $2.3 billion of that money is money that is currently with students overseas. So this bill which streamlines our ability to be able to help those students overseas to repay their loans is to be welcomed. Treasury estimates that by 2014 something like $22 million will be recoverable through the changes that have occurred as a result of this bill and $22 million is significant. Obviously the sum will accumulate over time as we get the basis of a new system a more streamlined and electronic system in place and one that can be built on and encouraged further after that. 
This is where we come to the issue that the Labour Party is not in support of. The particular aspect is the charging of a fee to students in order to be able to put this system into place. I think that at the moment students are in many ways already heavily burdened with student loans. As we are actually making close to $22 million off the back of the savings that will occur putting a yet further burden on to students of the administration fee in this bill is we believe over the top. Although we are supportive of the bill itself we are not supportive of the proposal in this bill to add an administrative fee for students to enable this system to come into play. The State will take $22 million which will increase over time so that fee I believe is unnecessary. It is a fee of only $40 per student; nevertheless it is a fee that will hit students who are perhaps in a position where they are already financially stretched and ironically it will add to the cost of the loan for people who are already struggling. 
While I am on this topic I will address the broader aspect of what is actually happening to student loans. An extraordinarily important subject for the country is the amount of money that we commit through student loans and the commitment we make as a country to tertiary education. Yet some areas of student loans such as that of people trying to get a student loan have been disadvantaged as a result of the last Budget. I am referring to those students who are over the age of 55 and who are effectively being shut out of obtaining a student loan. That says a couple of things to me. First of all it says that people over 55 have really no value in our education system because they are too old. We know that 55 is the very age at which many older workers look to retrain upskill and move on to other things. We know inevitably that people will be working longer as they continue their working lives and that they will want and need to upskill and retrain as a result of that. It seems highly discriminatory to penalise those people over the age of 55 rather than to support them to go into tertiary education to be able to change to a different pathway and to upskill their qualifications so that they can take part in the workforce and be more productive. Overall our labour productivity is one of the lowest in the world and we want to try to see that we provide every encouragement for workers to be able to move into more productive employment. This bill discriminates against those people over 55. 
The second point I will raise with regard to this legislation is that the over-55s have generally been paying taxes all of their lives but as a result of this bill when those people get to 55 the Government will say “Yes if you’re 18 you can get a student loan and the State will support you but when you get to be over 55 despite the fact that you’ve been contributing to society in most cases you have been excluded.” I think that is grossly unfair. This access to the student loan should be universal; it should not be discriminatory. It should be allowed to continue for those over 55 regardless of the fact that according to the Minister for Tertiary Education these people are considered high risk in terms of the degree to which they pay back their loans. Despite the fact that I have asked the Minister specific questions about the over-55s—in what courses and in what areas have they not been paying back their loans—I have not been able to get that information. It seems that this policy is somewhat like shooting from the hip and is not really thought through but is nevertheless a policy that is targeting and discriminating against those older members of our society who genuinely want to go back retrain relearn and upskill. That is exactly what we are trying to provide certainly on this side of the House through our education policy but in fact it is not the case at all with this bill. 
I just come back to the bill itself. As I said the Labour Party will support this legislation because it streamlines the ability to collect those loans that are outstanding. It provides a better interface for students who have perhaps gone overseas because we can communicate through electronic media. That will replace much of the paper-type aspects that have been the hallmark of the student loan system up till now. It will recoup—according to Treasury figures anyway—$22 million by 2014. In the next 3 years that amount of money will easily pay for what has been put in place in terms of the changes in this legislation. Thank you. 
AMY ADAMS (National—Selwyn) 
: 
 I am going to take just a quick call on the second reading of the Student Loan Scheme Bill. People who are listening at home and who heard the last speaker David Shearer might think that the scope of this bill is considerably wider than it is. In fact it is a reasonably straightforward bill that enjoys wide support. As the Minister of Revenue has said very well in his opening contribution the bill really is about making this part of the tax system simpler easier to understand and easier for taxpayers to comply with their student loan obligations and about making sure we have a tax system that works in the best interests of the stakeholders who use it. This has been an ongoing work programme for the Minister and I commend him for that work across the tax system. 
This bill represents the student loan scheme parts of the tax system. If I remember back—many many years it seems now—when I had a student loan I can certainly attest that one of the most frustrating parts of the process was not being able to get any sort of sense from the Inland Revenue Department about what the loan balance was. It was all compartmentalised into different years and one would be in credit in this year and would have a debit from last year and one could not set the debit off against the credit. It seemed to me even then that it was nonsensical and I wondered why we could not run these systems in more of a simple bank-loan way where one had a consolidated real-time balance that one could access easily and contribute to easily. Finally under the National-led Government and under Minister Dunne we are moving to a system where that sort of common-sense easy-to-use process will come into being. I think student loan borrowers for many years to come will be very grateful that we have that sort of certainty. 
I want to touch on two other matters very briefly. The first is around the pay-period certainty we are providing where the majority of student loan borrowers who are on PAYE for salary and wage payments can have some certainty that when they make their weekly fortnightly or monthly contributions that is the sum total of their obligation. Each pay period if they pay the required amount then they can be certain that their obligations are met and they will not face the risk of getting a bill at the end of the year for some changes in accounting during the year. They will not suddenly find that a bill arrives on their doorstep. As long as each pay period the right figure is paid then they can relax in the certainty that their obligations are met. Again that is the sort of peace-of-mind easy compliance that we certainly want to support. 
The final point is around the changes to the penalty rates and as Minister Dunne noted this is one of the areas where the Finance and Expenditure Committee heard and accepted the fact that the dates will need to be pushed back while there is some work done in the Inland Revenue Department to get its systems in place. But it is a good system we are moving to where we are changing from effectively penalty rates of up to 20 percent per annum on unpaid student loan contributions to rates that are effectively going to be closer to around 10 percent per annum and in fact as low as 8 percent per annum if non-compliant borrowers enter into instalment arrangements with the department. So I think we are certainly getting into a much more usable and supportable penalty regime that will not see these debts spiralling out of all control but still of course have that incentive for the borrowers to repay the debt. 
This is excellent legislation. It is the sort of making-it-easier-to-comply legislation we need to support in this House and I am very happy to commend it to the House. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 As my colleague David Shearer has indicated Labour is supporting the Student Loan Scheme Bill through Parliament with a number of important caveats. I first acknowledge the reason why in broad principle we are supporting this bill. Obviously student loan issues is important to address. Anything that helps rein in some of the costs that have occurred in respect of some of the non-repayment issues is important to grapple with. A lot of these issues centre on those who graduate and go overseas. They make up a fairly big percentage of those who are not repaying loans and we need to try to bring them into the fold. Treasury has stated that this will bring in around $22 million a year and that is important for the revenue. 
I note a couple of things. One is the change to late-payment penalties which were nudging towards 20 percent under current arrangements. In some respects that is almost at loan shark rates—an issue the Government is finally moving on after Carol Beaumont’s excellent bill last year was rejected by the Government which left many people to pay usurious rates that were inappropriate. Now we are starting to see some action on that issue from the Government. Similarly we have the Government proposing that the interest rate that students pay on late payments should drop back to about half the rate it was down to 10.6 percent or even 8.6 percent if they enter into instalment arrangements. Obviously those repayments will be much easier with the electronic processing that is at the heart of this bill. So that is a step forward. 
I want to speak particularly though on the issue of excluding over-55-year-olds from student loan access. I speak on this issue with some real connection to it as somebody of that particular age. I say to this House that the concept that people will not be able to retrain with some assistance from the State—some hand up—is a nonsense when we consider that in this Parliament we have people in their 60s and even 70s still doing extraordinary dedicated jobs still working extraordinary hours and output rates and showing that people into their 70s are well able to contribute. In fact the whole pattern of commentary emerging is that we need to work longer if we want to have secure retirements. We are hearing that from people like the Retirement Commissioner and others yet here we have a bill that tells anybody that once they get past the magic age of 55—and a magic age it is— 
Aaron Gilmore 
: Refer to the clause that says that Brendon. 
BRENDON BURNS 
: The situation is that over-55-year-olds are excluded from— 
Amy Adams 
: I raise a point of order Mr Speaker. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Yes I know what the member is going to say. The member is going to ask that the member come to what is in the bill. I ask that we just try to bring things together. 
BRENDON BURNS 
: I will move to other commentary on the bill such as student loan eligibility restrictions. I note the commentary from Te Puni Kokiri about the new restrictions stating that this is “at odds with the declared intent of the Tertiary Education Strategy to encourage more Maori and Pasifika students into tertiary education.” I ask members opposite what particular part might it have been commenting on. I also note the Ministry of Pacific Island Affairs’ statement that the “package may result in Pasifika students dropping out of university and going onto the unemployment benefit or shifting to cheaper avenues of study.” What we want to see is people encouraged to take up tertiary study so they can progress from career to career because the reality of life is as some members opposite can testify from their own CVs we can take part in three four or more careers. In that sort of environment we need the capacity to train retrain and get a helping hand from the State to assist us through that part of life and it should not end at a particular point in life. 
This bill is of course replacing the Student Loan Scheme Act of 1992. We are looking at facts that state that the loan balance is currently standing on the Inland Revenue Department’s books at around $11 billion and we have nearly 600000 people in receipt of student loans. I was interested to see in the Finance and Expenditure Committee the average amount borrowed. We have pictures in our minds I think of students borrowing tens and tens of thousands of dollars and not repaying them. In fact that is not the case as we heard from the Inland Revenue Department. The average amount borrowed is actually under $7000 per student and the repayment time for those who left tertiary study in 2006 was around 4.6 years. So the time frames and the amounts borrowed are quite modest but cumulatively we are talking very serious amounts—currently around $11 billion and projected to go to about $15 billion in the next 4 or 5 years. Obviously that issue is at the heart of this bill: the need to allow former students with student loans many of them overseas to tap into payment systems electronically and pay back their debts at a time when often they are earning good money overseas. That is at the heart of the bill and that is why Labour is broadly supporting the passage of this bill through Parliament. 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Assistant Speaker Robertson. Nga mihi nui ki a koutou. Kia ora. It is great to take a call on the Student Loan Scheme Bill—a Government bill going through under urgency. I think student loan issues are urgent and we should be dealing with them but a bill of this nature which essentially is tinkering around the edges is not the type of thing we should be addressing under urgency. 
When we look at the student loan burden across the country we are looking at an amount in excess of $11 billion on the shoulders of more than 560000 Kiwis. This is an urgent crisis and this bill does not address it. My big fear is that this bill will prolong the student loan debt burden on those hundreds of thousands of Kiwis for months and years with only minuscule benefit. 
Student loans since they were first introduced in 1992 have been a massive experiment with our tertiary education sector graduates. A massive $11 billion is currently outstanding and this loan debt is growing at $1 billion a year—a fantastically huge sum at a time when the Government is borrowing such considerable amounts. 
The curious nature of student loans is that in fact they are down on the Government books as an asset. If we look at the Government books which are not in great shape at the moment we wonder what the consequences would be if we took this asset and did something else with it. What it is of course is a massive drag on our economy students and society. 
I acknowledge and thank the submitters to the Finance and Expenditure Committee. I thank the officials and the chair of the select committee. We did not hear a huge number of submissions on this bill because ultimately this bill is pretty small-scale in its intent. Essentially this bill tightens up rules relating to overseas graduates with loans adds administration fees and most critically brings in electronic management of student loans. I cannot believe that in 2011 we are getting around to electronic management of loans. It is amazing that in 2011 we are finally getting to this. It could have been done a long long time ago. 
Peseta Sam Lotu-Iiga 
: Under the Labour Government—yes that’s right. 
GARETH HUGHES 
: The member is correct. A good question to ask Labour members is why this was not progressed sooner in the 9 years Labour was in Government. It makes common sense. Graduates— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I say to the member on my left and the member on my right that interjections are permitted only when they are directed at the person who is addressing the House. Interjections between each other with members having their own private debate are not in order. 
GARETH HUGHES 
: It is a good example of how students have been failed by both Governments of different hues. The fact is that it is good we are finally getting around to electronic management of student loans. It is amazing that we have waited until 2011 given that the internet has been around for such a long time is such a key tool and will increase the cost-effectiveness and efficiencies of student loan administration by the Government. 
We oppose some parts of the bill and support other parts of the bill. We support the intent of the legislation which is to increase the effectiveness reduce administration costs and in particular introduce electronic management but we are opposed to the imposition of additional fees on students. These are Kiwis in New Zealand. Some of the poorest Kiwis are on student loans; they are effectively beneficiaries. These people are the least able to handle additional fee costs being imposed on them especially in this current economic environment. 
This bill brings in a $60 student loan establishment fee and an annual $40 student loan administration fee. These are substantial figures for people. It might not seem like much to members in this Chamber who have just received a 5 percent tax cut—a tax cut for the rich as it has been called in the public arena. Yet we see this Government putting additional burdens on some of the poorest New Zealanders who are facing rises in GST petrol and other costs of living. We think this bill is bad in that respect. It would have been good to get rid of this part in the select committee. Ultimately we heard from officials that the Inland Revenue Department is investing in updated computer software and infrastructure. So there is no need for additional costs for students to pay. I understand that the administration fees will raise only around $14 million. That is a tiny drop in the bucket compared with what this Government is spending on motorways which is in excess of $19 billion. 
We are opposed to administration fees for students because they add to the burden that students are already struggling under; they add to the repayment time increasing that burden over the course of graduates’ student loan repayment; and lastly they reduce the effectiveness of the voluntary repayment bonus. We think the repayment bonus is a good thing. We think we should be looking for more carrots as opposed to sticks. We support voluntary repayment bonuses. In fact we support writing off a year’s student loan debt for each year the graduates stay in New Zealand. We want to see Kiwis staying in New Zealand especially after they have graduated. We think that carrots are a much better way forward instead of looking at the path of debt collectors or of charging extra fees on the loans. 
Before I get into the substance of the bill and the reasons why we are opposed to the admin fees I make just a quick point that it is good that this bill does not introduce interest on student loans. I am sure the Government benches are looking forward to that announcement if it comes. I hope the National Party does not announce bringing back interest on student loans. It was a shame we had interest on student loans under a Labour Government for so many years and I feel that it should have reduced the interest earlier. Labour waited until 2006. Obviously the issue won the election for them. It was a vastly popular issue. A huge proportion of this country—around one-sixth or 560000 Kiwis—has a student loan. Not having interest on loans has made a significant difference to the burden facing Kiwi graduates. I acknowledge that Labour introduced it and it is good that this bill does not take it away. But I want to hear confirmation from the Government benches that National will not be bringing back interest on student loans. 
The $60 and $40 fees add to the student debt burden. It is not the way we should be going forward. We should be debating how we can decrease student fees and decrease the student loan burden. My big fear is that because interest-free student loans are so popular in this country the Government is trying to apply interest by stealth. The big fear is that these admin fees are interest by stealth. I am sure the Government benches dearly want to bring back interest on student loans. The accusation we heard in the select committee was that the administration fees are interest by stealth. 
The fact is that we already have a good system with a repayment threshold. Once a graduate with a loan starts earning over the threshold 10 percent of their salary is docked automatically to go to the Inland Revenue Department. I imagine I am probably the only member in this Chamber with 10 percent of their salary going directly to the Inland Revenue Department as I slowly but surely pay off my student loan burden. The fact is that we have this system already. The submission by the New Zealand Union of Students’ Associations called this a new tax and said quite rightly that those 560000 students in the community who are worried about taxes and about hearing the tax rhetoric from this Government will be lumped with these new fees and will see them as a tax. 
The fees will increase the repayment time for student loans. If we look at the last student loan report we see that the median repayment time is 6.6 years for someone who graduated in 2004. That is an awfully long time especially for many of these students who are in their early or late 20s and who are thinking about starting a family. This is part of the reason we are seeing such a big demographic shift over the course of the history of the student loan scheme since 1992. People are delaying having families and buying a home—that is if they can live the dream and actually afford a home. With the repayment times we are seeing a gender imbalance. We see females taking longer than males to pay off their student loans. 
We also see this bill reducing the effectiveness of the voluntary repayment bonus. We think that carrots are a good idea as opposed to sticks. We support the voluntary repayment bonus. If a graduate makes a voluntary $500 repayment on their loan they get a $50 bonus from the Government but the fact is that $40 has already gone straight to the Government in these new administration fees—this interest by stealth or as they were described in the select committee these tax increases for the poor. Ultimately the bill will reduce the effectiveness of the voluntary repayment bonus because people will say: “Why bother? I already have to pay these new admin fees. I am just not going to do it.” 
The second part of the bill which I may talk on in other calls is about the pay period. We have some concerns around the changes to the pay period. The changes will disadvantage those hard-working part-time students who earn the bulk of their income over the summer picking fruit working in the freezing works or whatever. The fact is that exemptions are available for those students but I doubt that many students will be either aware of the exemptions or able to access them. There will probably be a lengthy process. It would be good to hear from the Minister of Revenue how once this legislation passes we can make it easier for these students to access these exemptions. 
In summary we support elements of the bill and we oppose other elements of the bill. Ultimately we need a big discussion of what student loans mean in the future and of how we can reduce the student loan debt burden for students. Kia ora. 
Hon Sir ROGER DOUGLAS (ACT) 
: 
 It was interesting to listen to the Green Party representative Gareth Hughes. Essentially he was saying that the $1 billion of subsidies that goes to students is not enough and that it should be more. He was saying that the people I used to represent in Otara Papatoetoe and Manurewa are not paying enough tax to subsidise the rich students who come from Karori and places like that. Let us be very clear what he was saying. He was saying that the Government has already taken $1 billion from taxpayers but that it is not enough. He was saying that he wants to make it $1.1 billion. Guess who is going to pay it? The poor families in Otara Papatoetoe and Manurewa—the people the Green Party guys claim to represent. 
In book-keeping there are two sides of the coin: we cannot spend what we do not take from someone else. The Green Party wants to take money from average hard-working New Zealand families and give it to students so $1 billion is not enough. I have never heard one of the Green Party members saying to that young boy that 18 or 19-year-old who wants to buy a truck and set himself up in the business of carting goods that they will give him a subsidy. No damn way! They will tax him and give it to the affluent. That is what it is all about. 
The Student Loan Scheme Bill is a simple bill. ACT supports it. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 Tena koe Mr Assistant Speaker Robertson. It is a pleasure to stand and speak on the Student Loan Scheme Bill. In our family education is a big deal. My husband earned his PhD 2 years ago. He works at Massey University so he is very much into the academic world. It was 25 years ago when I started as a full-time student doing my Bachelor of Arts degree at Waikato University. I then switched after a year to turn my focus to law. Of our five children four are university graduates and they all have student loans to pay off.  
Going back to my situation who would have thought in 1984 when I started out at Waikato University that I would now be turning that study to practical effect and implementing law in these hallowed halls? In those days our concerns were about scaling down Maori. By that I mean that it was the practice to scale down the marks of students learning te reo Maori. There is an article by Jill Bevan-Brown that tells the story of a young man’s marks in Bursary Maori being scaled down from 94 percent to 67 percent. When his mother intervened she was told that the Government could not afford the cost of large numbers of A Bursaries being earned in the Bursary Maori exam. Yet the same degree of scaling down was not applied to other languages such as Russian and French. I tell this story because it is but one issue amongst a history of various blocks and barriers that Maori students have experienced in the transition from secondary to tertiary education. Such a history provides a vital backdrop to the Maori Party’s position on tertiary education and in the specific case of this bill on the student loan scheme.  
The Maori Party believes that tertiary education is a front-end investment in the nation’s future and should be freely available to all. It is from that basis that we seek to increase accessibility to tertiary education to ensure that all people have the chance to pursue tertiary education. So how does the student loan scheme fit into this framework? The Maori Party has tried very hard to ensure that sufficient attention is paid to student loan debt repayments. It has been our position that student loan debt repayments should start only when a student starts earning one and a half times the average wage. We have also recommended that there be a 5-year grace period for repayments after graduation. That is our core position so we have been on the alert to see how this bill which repeals the Student Loan Scheme Act 1992 the current student loan scheme legislation can be seen in that light. 
Significant points of the bill currently before the House are that it will increase the loan establishment fee from $50 to $60 and establish an annual $40 Inland Revenue Department administration fee. These would not seem to be aspects that we can support. Further when we read the submissions we see that the New Zealand University Students’ Association supports the current annual assessment of earnings to determine student loan repayment obligations rather than the proposed shift in the bill to pay-period repayments. 
The New Zealand University Students’ Association is concerned about the proposed move away from a simple annual repayment threshold to a weekly fortnightly or monthly pay-period system and is opposed to any increased obligations that borrowers may therefore face under this legislation. Its argument was one of consistency. A shift to a pay-period system is inconsistent with other tax obligations. PAYE payments are determined on an annual basis with a year-end square-up of income as is child support and Working for Families. Student loan borrowers should not be treated differently particularly if the Inland Revenue Department is supposedly aiming to improve systems and remove complexity for all parties. On this ground it is the view of the Maori Party that the increase in the loan establishment fee and the introduction of an annual Inland Revenue Department administration fee will have a negative impact on students who have student loans. Numerous annual reports from Te Tahuhu o te Matauranga tell us that Maori certificate-level students carry a larger student loan debt 5 years after study reflecting notably lower earnings. Maori with bachelors’ degrees or postgraduate qualifications also have notably higher average leaving loan balances than non-Maori. 
Yet some issues have come up during our discussion on the bill that warrant further investigation. The implementation of the policy and administrative reforms through a new loan management system has proven more complicated than the Inland Revenue Department expected so this bill is a genuine attempt to make implementation easier. The bill extends the exemption for full-time full-year students from having repayment deductions made from their salaries or wages to also include students who undertake the equivalent of a full-time study workload for part of a year students who start to draw down a student loan before their study commences and students who work over short non-study periods or the Christmas period and intended to study after that period. That is a step forward in terms of being prepared to factor some flexibility into the system which we see as positive if we are serious about supporting students to access tertiary education. 
This bill also rewrites the legislation governing the administration of student loans reforming the way student loans are repaid the way borrowers manage their loans and the way loans are to be administered. The changes allow borrowers to manage their loans electronically and allow the Inland Revenue Department to provide more services to borrowers. The students’ own association the New Zealand University Students’ Association has spoken very positively about this aspect of the bill. It sees that the expansion of online services and increased electronic and personal management of outstanding student loan balances will be of great benefit to borrowers generally and will be particularly useful for overseas-based borrowers. The introduction of a new electronic loan management system will enable students to monitor and manage their loans online. From accounts that has been received positively by students. 
One of the dilemmas that parties come to—well parties that have the option of voting on principle rather than just the party line—is that we oppose some parts of the bill such as the increased costs for students but we support other parts such as the incentive to be more effective and particularly to move into the information age. Our vote reflects this dilemma. Kia ora. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 Malo le soifua. I rise to support the Student Loan Scheme Bill. All of the arguments—all of the logical arguments anyway from members on this side of the House—have been put forward for this bill. It is about reforming the tax system to bring it up to modern times. It is about delivering certainty for taxpayers so that they have the relevant information before them. It is about allowing them to interact directly with the Inland Revenue Department at any time with speed of access and that interaction is primarily online. It is about providing good value for money for our taxpayers in terms of how we go about receiving student loan payments. In doing so it is about building trust and integrity in our tax system allowing us to get higher levels of compliance and higher levels of repayments particularly when loans are interest-free. It is about bringing about change that is beneficial to all New Zealanders. It is about bringing down the costs of administration. It is about speeding up our loan repayments. 
My personal experience having spent a number of years overseas when I had a student loan was that I found it difficult to communicate with the Inland Revenue Department whether I was communicating from England Australia or the United States. The changes we are about to put in place will bring about easier access for those who actually want to pay back the moneys but who find it very difficult to communicate with the Government departments. There is a simple message: the bill is about simplicity for our users making it easier for them to comply with their requirements under their student loan contracts and easier for our bureaucrats to administer such a system. 
Before I conclude I raise one point about student loans. There seems to be some uncertainty from the benches across the other side of House about why student loan recipients are an asset. They are debtors. Student loan recipients are people who owe money to the State. That is why they are an asset and that is why in order to facilitate the repayment of debts it is important for us as a Government as it is for any prudent organisation to put in place systems that will facilitate repayments in a more effective and a more efficient way. That is why we are bringing about these changes. 
It was a pleasure to sit on the Finance and Expenditure Committee. I thank those officials and submitters who participated in the process and I thank fellow committee members. Finally I salute the Minister of Revenue for the changes he has put in place in this area. These changes are long overdue. They certainly did not happen under the Labour Government but they are happening under this hard-working National Government. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 It is a pleasure to rise to speak on the Student Loan Scheme Bill. As other Labour speakers have indicated we are supporting this bill albeit with some concerns about a couple of matters which I will go into in a moment. First I will respond to some of the comments made during the debate. I start with my colleague Gareth Hughes from the Green Party. I want to make clear that we on Labour’s side of the House are very proud of the changes Labour made to the student loan scheme when we were in office. 
When I was a borrower in the student loan scheme we were charged interest on our borrowings while we were studying—while we had absolutely no means of being able to pay it back. It created this phenomenon called flat-spotting which means that people could earn and earn and earn money but the interest would keep going up and they could not pay it off. Labour made sure that we removed interest on student loans while people were studying. Then we moved on to remove interest completely from student loans. I am proud of that. I am proud that that achievement has made it much easier for people to pay off their loans. It has worked in trying to keep graduates in New Zealand. That was actually the purpose of the change: to incentivise people to stay in New Zealand because interest is still charged when a borrower is overseas. 
We also made tertiary education more affordable generally. We introduced the fee maxima policy. I sat on a university council in New Zealand in the mid-1990s. In 1 year fees went up by 18 percent and the next year fees went up by 15 percent. That made it really difficult for people to afford tertiary education. When Labour came into office we introduced the fee maxima policy which meant that institutions could not put up their fees by more than 5 percent per year. That demonstrably helped students by keeping the cost of their education down. We also extended eligibility to student allowances which meant that fewer people were borrowing from the student loan scheme. That was very important to the academic success and welfare of many students. So I say to Mr Hughes that although he may have ideals for further changes to the way tertiary education is funded—and I too want to see it become more affordable—I think the Labour Government’s record on tertiary education in its last term of office is something to be proud of. 
In terms of Sir Roger Douglas we heard a familiar speech from him. My only response to it is that the reason why I support investing in tertiary education is so that the children of the truck driver from Otara can have a tertiary education. Why should we limit their opportunities? We need to invest in tertiary education so that everybody has the chance to improve themselves no matter where they come from. Tertiary education in my mind—and I know that Sir Roger will disagree with this—is a public good for the most part. In the mid-1990s the Todd task force which looked into tertiary education tried to come up with a balance between the public and the private good in tertiary education. The truth is that there is not a scientific formula for that but the reality is that we all benefit from tertiary education because we benefit from having people with skills who can then go on to be part of our productive economy. It is an investment in all of our futures. It is especially an investment in the future of someone who comes from a background where they may not have the resources themselves to pay for tertiary education. I think we should have the ambition for the people from Otara to be able to be part of the tertiary education system which is why we need to invest in it rather than trying to see it portrayed as some kind of middle-class benefit. 
I will now return to the bill itself and say as other speakers have said— 
Chris Hipkins 
: Return to it? 
GRANT ROBERTSON 
: I say to Mr Hipkins that I was responding to comments in the debate. I will now return to the bill itself and say as other speakers have said that there are some good elements in this bill. I particularly support the idea of a more electronic-based system for the loan scheme. As I said in the first reading debate when I was looking at some of the forms being used for student loan borrowers when a constituent visited me in my office with a problem with their loan I recognised the forms as ones that I had been part of designing as a student politician in the mid-1990s. So there is absolutely no doubt that the time has come to update the systems. 
As Mr Lotu-Iiga said an electronic system will be very helpful for people overseas and we want people who are overseas to be able to pay back their loans and to interact with the Inland Revenue Department in a sensible way. I have one issue around the electronic system which is the question of how it interacts with the redesign of the computer system at the Inland Revenue Department. It is quite clear that historically Government agencies have struggled with large computer projects. Need I mention INCIS—the integrated national crime information system—to the House? As we go through this debate and in the Committee stage I have a number of questions for the Minister around the interaction between these changes to make electronic payments easier and the overall change of the Inland Revenue Department’s computer system. But overall that is a very good aspect of the bill and it is certainly one that we can support because it will help borrowers manage their loans and help with consistency of treatment between different borrowers. That change is important to make. 
The two areas I want to speak about in the remainder of this call—and I will certainly come back to them in the Committee stage—are the administration fee changes and the changes to the pay period assessments. It is difficult to understand exactly what the Government is doing with the administration fee. We have an increase to $60 for the fee for students drawing down a new loan and a charge of $40 for borrowings. A new charge is being introduced here. 
Chris Hipkins 
: Full of interest. 
GRANT ROBERTSON 
: Well that is the question I say to Mr Hipkins because when we look at the actual costs in front of us we need to ask whether any new increase in costs would justify a change. According to the regulatory impact statement there will not be any new cost. In fact the new computer system should save money in the long run subject to the questions that we will ask the Minister of Revenue. So money will be saved. The whole thing should lead to quicker repayments of loans so there is no additional cost there. We have to ask ourselves why a new fee is being introduced when the costs of running the scheme look like they might be going down as a result of this bill. 
The conclusion that has to be drawn here is that the National Government has been desperate to reintroduce interest to student loans. This was the policy that John Key said he would oppose with every bone in his body and now we have a new fee being introduced. It does look like the reintroduction of interest by stealth on student loans. That is what this new fee looks like. There is no actual justification for putting it in place. When we get to the Committee stage of the bill we will certainly want to ask questions about how justifiable this new fee being introduced under this bill will be. We do not believe that it is justifiable; we believe that in fact it is the introduction of interest by stealth by a Government that wants to reintroduce interest. John Key and Steven Joyce have both gone as close as they can to saying that they would like to reintroduce interest on student loans but they know that politically they cannot say so. So by stealth we have a new $40 fee being introduced here for borrowers. I believe that it is the equivalent of interest. Although we support the positive changes around the electronic system we do not support the introduction of that fee. 
The other matter as I have said is the question of the repayment period. I acknowledge the work the Finance and Expenditure Committee has done on this matter. A number of concerns were raised both in the first reading debate and then by submitters about the fact that this change would be penalising students particularly those who work intensively in holiday periods so that they do not have to work while they are studying. If they were to earn more than $367 a week in one of those holiday periods for instance under the bill as introduced they would be forced to make repayments on that. That would be unfair because that is the money they would be saving to be able to use during their study period. 
I acknowledge that there have been changes to the bill particularly to clause 48 that I think will largely deal with that concern and there are changes to clauses 73 to 89 that also deal with this matter. But when the Minister is in the chair in the Committee stage I would like to ask him some questions because I was not on the select committee. I would like to ask some questions during the Committee stage as to whether we have dealt with the question of making sure that those people who work intensively in their holiday periods will not be penalised under this law by moving from an annual pay assessment to a pay period assessment. I think that is important because we do not want students working undue hours during their study period; we want them to be able to focus on their study. In the commentary on the bill I think there is a statement about not wanting people to borrow unnecessarily either. That is a different way of looking at it. I think the select committee has made some good changes that will allay a lot of the concerns that we on this side of the House have about the way in which the assessment is changing from an annual assessment to a pay period assessment. But there are still questions to be answered to make sure that students are not unfairly penalised. 
Overall we support this bill but we do have concerns around the administration fee and the repayment period and we will be raising those in the Committee stage. 
DAVID BENNETT (National—Hamilton East) 
: 
 I will take a short call on the Student Loan Scheme Bill. This bill will have the support of at least the two main parties in the House. It is part of the wider reform of the student loan scheme in which I think everybody sees merit to make it easier for students to be able to deliver their part of the bargain in repayment. It is changing some of the requirements of the student loan scheme but keeping intact the main element of the scheme the interest-free student loans which this Government has committed to retaining and has done so. Students around the country no doubt are very grateful for that in these very tough economic times. 
Aaron Gilmore 
: What about the students in Hamilton? 
DAVID BENNETT 
: Yes students in Hamilton are especially grateful for that. I think it has been a big sacrifice for this country to make sure that we can deliver that and I think it is a tribute to the Government that it has been able to deliver that in these most difficult of times. 
The student loan scheme is enhanced by this bill. We look forward to more students being able to take advantage of educational opportunities in the future through our reforms in the education sector so that we can lift our economic performance even higher. Thank you. 
DARIEN FENTON (Labour) 
: 
 It is a pleasure to take a call in the second reading of the Student Loan Scheme Bill. As my colleagues have said Labour supports this bill albeit with some reservations. It has been very interesting listening to the debate and I think the Committee stage will be very interesting. There are certainly a couple of questions that we want addressed. 
It has also been interesting listening to people reminisce about their university days. I come from a generation who did not have student loans and student fees. I was not the best of students. I studied in the 1970s when it was quite fashionable to drop out. I hate to admit the fact that taxpayers paid for me to go to university and I did not complete my studies though I did go on later to do trade union and labour studies with my colleague Sue Moroney. I did not need a student loan for that study because my union paid for me to do it. So I have never had to experience a student loan. I am very grateful to former generations for allowing me to do that initial study which I do not think was completely wasted but also to complete studying later on. However my son has experienced a student loan. He has just returned from San Francisco this week on a temporary visit and he will be very interested in how much easier it will be for him to communicate with the Inland Revenue Department and to make his repayments. 
One of the things we hope for from this bill and the changes it will make is that it will make it more likely that some of the former students who are overseas will be able to repay their debts and bring their skills back home to New Zealand. Unfortunately I think an awful lot more than just student loans is keeping our best and brightest overseas. We know that it is to do with the low wages in New Zealand and the fact that we have a huge gap between here and Australia for example. Opportunities for jobs are so much better in many other countries. 
The purpose of this bill is to amend the student loan administration system to an electronic format. That seems very sensible. The purpose is to make it easier for borrowers to communicate with the Inland Revenue Department wherever they are. As the Green member Gareth Hughes said it is interesting that it has taken a while for the Inland Revenue Department to get student loan administration on to an electronic system. I understand that the student loan scheme as it is currently administered is pretty unwieldy is expensive to maintain and has limited ability to accommodate further changes. It is good to see the system moving to the modern era and to see the Inland Revenue Department being able to move student loans to a system that is much easier for students who have borrowed money. The repayment method is also being simplified to avoid the end-of-year square-ups for most borrowers and late repayment penalties are being simplified and eased. 
As I have said already Labour supports this bill as we believe that it will improve debt repayments. Student loan debt is a major factor driving graduates overseas and as I have said already it is one reason they do not come home. We want them to come home and bring back their skills so if this bill helps we welcome that. However we do have a couple of concerns which will be outlined in my contribution and also in the Committee stage. 
The student loan debt held by overseas graduates is a real problem. It is something we have to address. To this end we particularly support the changes in the bill to late payment penalties from a total of 19.56 percent interest per year to just 10.6 percent or 8.6 percent if the student enters into instalment arrangements. Treasury expects these changes to increase student loan receipts by up to $22 million a year by 2014. That is a positive step forward but we do have to ask why then we need to have an increase in the student loan establishment fee from $50 to $60. As other speakers have said this is an attempt to introduce interest by stealth. It seems completely unnecessary when this bill will actually improve repayments. We need to understand and we will be asking questions about why this is necessary and why the Government thinks it has to reintroduce interest by stealth. It will add an extra financial burden on those who are already struggling to pay their bills and who have incurred substantial debts as a result of their studying. 
Similarly another concern we have is that it appears unfair that a borrower who due to the new pay period deduction system unintentionally makes excess repayments of over $500 in a year is not able to apply for the 10 percent excess repayment bonus at the end of the year. It appears that the Government has not really fully thought out the impacts of this simplification plan. Perhaps a simpler and fairer way of dealing with it is to say that no student has to repay debt while they are participating in full-time study. 
This bill does take a positive approach to managing student loan debt but I have to say that there will be tens of thousands of students to whom this bill does not apply. I cannot help but reflect on that in my contribution. At a time when we should be investing in tertiary education for all we are seeing caps cuts and a dampening of demand for all tertiary education. 
Carmel Sepuloni 
: All we’re seeing is food stamps. 
DARIEN FENTON 
: All we are seeing is food stamps. That is all we are seeing. Yes that is right. But I am also very very concerned about the exclusion of 55-year-olds from loan access. It sends the message to older people that there is no point in them reskilling and no point in adult education. Of course that does not apply in this bill. These people are excluded from this bill which makes this whole policy pretty questionable. A policy that excludes over-55-year-olds is very short-sighted punitive and harsh. We are in a country with an ageing workforce. We are told repeatedly that people will have to change their jobs many times during their lifetime. They will have to reskill as things change. We know that the jobs we are training our younger students to do today do not yet exist. Yet here we are telling older people that they are on the scrap heap and not worthy of adult education. I think that is really unfair. 
We are also concerned about the removal of the fee maxima— 
Amy Adams 
: Also not in this bill. 
DARIEN FENTON 
: That is not in this bill of course but it is one of the things we are very concerned about. —and replacement with an annual fee movement limit. National members can go on and on about the delights of this bill—and I really loved David Bennett’s contribution; he was talking— 
Grant Robertson 
: I missed it. 
DARIEN FENTON 
: Oh Mr Robertson missed it. It was all about what a wonderful job this Government is doing on student loans and how students all around the country will be thanking this Government and be very very grateful to it. They are not grateful; they are very very concerned about some of the policies of this Government and the things it is doing like the removal of the fee maxima. 
As I said at the beginning Labour does support this bill. We have some concerns about a couple of questions which we will be asking during the Committee stage. I have a final word for Sir Roger Douglas. His contributions on these things are always eminently predictable. It is a long time since he represented the people of Otara. The people of Otara want their children to study and they want them to do well. Those children are as entitled as anybody else in the country to have decent and affordable study. If Sir Roger talked to any of the Pacific families in Otara he would find that out. They are ambitious for their children. They do not deserve to be treated or talked about in any way that is different from anybody else in this country. Those children are our future and we need to look after them. 
AARON GILMORE (National) 
: 
 It is a pleasure to stand and support the Student Loan Scheme Bill. I will start off by referring to the comments of the previous speaker Darien Fenton on the speech by Sir Roger Douglas. I actually agree with nearly everything Sir Roger said. He pointed out that in many situations one of the problems with the student loan system is the ability of those poor people out there to go into tertiary education. I grew up in a State house and no one paid for my education. But Darien Fenton claims that $100 a year will put people off getting a student loan and that they will not go into tertiary education. That will not happen. It will mean that the butcher in Otara and the factory worker in Aranui will not pay for the lawyer in Fendalton. I think that is a good thing as does this John Key - led Government. You see this bill is all about simplifying the student loan system to make it easier for those people to pay and to keep tabs on how much they owe and how much they are paying back and I think that is a good thing. 
In the first reading of the bill I spoke about my personal experiences of having a $12000 student loan. With paper-based systems it took months to send records back and forth and this sort of legislation removes that. Many of my friends now live overseas. I think only three out of the 14 people who were in my graduating class at university are still in New Zealand. Those people have all paid back their student loans but they all spoke of their experiences of paying back their student loans in terms of the annoyance involved in sending paper-based records back and forth from their home addresses. That caused a lot of problems for them and this bill will go towards solving that. 
No one has spoken on Supplementary Order Paper 200 which amends this bill. Given that it came in after the first reading I think that it is beholden on us to quickly touch on it. I think the Supplementary Order Paper is a very good one. It was brought forward by the Minister of Revenue. The Supplementary Order Paper means that the loans of those people who do not operate within the rules of the student loan scheme can be recalled. There have been some instances of this particularly with regard to those overseas borrowers who exit New Zealand with no intention of ever paying back their loan or of operating within the rules of the student loan scheme. The Supplementary Order Paper that has been introduced strengthens the power of the revenue authority to recall those loans. Those people will have to pay back their loans and that is a good step in the right direction. 
Finally we look forward to passing this bill hopefully in the next few days and in years to come we will look back and see that the National John Key - led Government will have spent more money on tertiary education than any other Government before it. We will see that the administration fee that we are putting in place will do only one thing: it will change the incentives so that people will help pay towards the cost of administrating their student loans. That will be a fairer scheme than the one we have today. Thank you. 
A party vote was called for on the question  
That the Student Loan Scheme Bill be agreed to. 
Ayes 110 
New Zealand National 57; New Zealand Labour 42; ACT New Zealand 5; Maori Party 4; Progressive 1; United Future 1. 
Noes 10 
Green Party 9; Independent: Carter C. 
Bill read a second time. 
In Committee 
Part 1 Preliminary matters loan advances and New Zealand-based and overseas-based borrowers 
The CHAIRPERSON (H V Ross Robertson) 
: The debate on clauses 3 to 24 includes schedule 1. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I look forward to a full debate on the Student Loan Scheme Bill a bill that Labour is supporting but with reservations. This part deals with the purpose of the bill and I could probably begin my comments there. I will talk primarily in this contribution about the move to an electronic system for administrating student loans but talking in more general terms about the purpose of what this Act—which the bill will become—is designed to do clause 3 states that it is to: “(a) provide for the effective administration of student loans; and (b) provide for the collection of student loan repayments; and (c) provide transparency about student loans so that borrowers understand their obligations for those loans; and (d) encourage borrowers to repay their student loans at the earliest possible time.” Those are all good things and those are all things that Labour supports and agrees with. 
It would be fair to say that the student loan scheme at the moment is radically different from the student loan scheme that was introduced in the early 1990s and one that has been in need of refinement for some time. I have spoken in previous debates on the loan scheme about the difficulties that I personally had as a student loan borrower in making sure that my loan was repaid and that I ended up with a zero balance. Getting accurate information about a student loan balance at any given time can be incredibly difficult. It is probably the most difficult for students who are still studying because in the first year that their loan is drawn down it is administered by Work and Income or StudyLink and then in subsequent years by the Inland Revenue Department. At the end of the year their loan balance is transferred from StudyLink to the Inland Revenue Department which means that if they are in the second third or fourth year of study they effectively have two loans one with the Inland Revenue Department and one with StudyLink. It has always been a challenge for people to get accurate information about their loan balance at any given time. 
What this bill does—and we are definitely in support of this—is allow for real-time transfer of information between those two administrators if you like of the student loan scheme so that at any one point in time students or borrowers will be able to log in and get accurate up-to-date information about their loan balance. That is important. It is useful. It is what we can do with all of our banking now. We can log in and check our bank balances and credit card statements without any difficulty so why we cannot do the same with student loans has I guess been a point of contention. I think that all student loan borrowers will definitely welcome this measure. 
However some pitfalls still need to be worked through. With regard to the calculation of interest payments and interest write-offs the difficulty that I constantly hear about from people is that mistakes are made in interest calculations either on their part or on the part of the Inland Revenue Department and in getting accurate information about exactly how much they need to repay. This generally tends to happen when borrowers get towards the end of the repayment of their student loan. They might get to the point where they have only a few hundred dollars left to pay so they will cancel the salary deductions from their salaries because they know that their salary deductions will potentially be more than the amount that they have to pay. They will go ahead and do that. They will then try to get from the Inland Revenue Department an accurate account of how much they have to pay and they will make that payment. However it can then turn out that they have underpaid or overpaid depending on the interest calculations that were made so they could end up getting a refund or getting a bill asking for more money. 
I hope that at some point in time we can get to a system where for instance if I want to finish paying off my loan and get a zero balance as of today I will know that this is the amount I have to pay or the amount that I am being refunded and that we do not have this process where once borrowers think they have made their final payment they have to wait a long period of time before they get to find out whether the final payment has been made. 
Aaron Gilmore 
: We agree on something Chris. We agree on that. 
CHRIS HIPKINS 
: I am pleased to see that National members agree on that because that has been a nightmare for people. The other thing that has been a nightmare is that the Inland Revenue Department’s administration of the scheme using its paper-based system has a few quirks in it at the moment. I finally got to the zero balance point with my loan after a year. It took a whole year to get from being near the final repayment to actually getting the zero loan balance with a bit of backwards and forwards with the Inland Revenue Department. Then for about 3 years after that every year the Inland Revenue Department sent me a statement saying that I had a zero balance on my student loan because its paper-based system had not quite kept up with the fact that I had actually managed to pay off my loan. That is something that I get from the Inland Revenue Department all the time. I am surprised that it did not add the cost of the postage to my loan balance and then send me a bill for it because ultimately the taxpayer was paying for these loan statements to be sent out to me long after my loan had been repaid. In the move to this new electronic system we are putting in place with this bill I hope that all of that can be avoided that the system will be a lot more efficient and that once someone has repaid his or her loan it will be finished. I think that members on this side of the House will be very supportive of that. 
My colleagues have raised concerns in their second reading speeches about the fee for the establishment of a student loan being increased from $50 to $60 and I certainly concur with them on that. One could ask why we have to increase the amount of money that a borrower will have to pay in order to have a loan in the first place if the student loan scheme is to be more efficiently administrated. Is this a back-door way of increasing the costs to the borrower when the costs to the borrower should actually be decreasing? My argument is that if this bill results in more efficient administration of the loan scheme the savings from that should be passed on to the borrower. To do anything less than that in my view would effectively resemble a broken promise by National. National promised that it would keep interest-free student loans. Of course it made some other promises about making it easier for people to repay their loans faster. If this bill increases the efficiency of the scheme but National does not pass on the benefits of that to borrowers I think that really is a breach of the good faith that many loan borrowers showed towards National by mistakenly voting for it. We can forgive them for that. But in time I think I would like to see those savings passed on. 
We have already seen from this National Government the introduction of an annual fee for student loan borrowers. In my view an annual fee is a form of interest because even if somebody does nothing other than make the minimum repayments required to just keep it ticking over they are now charged an annual fee. In my view that is a form of interest. Labour is definitely opposed to the increase of the establishment fee and we were opposed to the introduction of the annual fee. I will deal more with the repayment provisions in my contribution on the next part of the bill. 
I will return to the purpose of the bill which is around the efficient administration of the student loan scheme and greater transparency around student loans. I think we on this side of the Chamber will certainly welcome that. As I have said before it has been a bit of a black box for loan borrowers trying to figure out exactly how much they owe and trying to get to the bottom of how much they would need to pay if they wanted to repay their loan in full. I think this bill potentially helps that situation quite considerably and we certainly welcome it. 
I could talk a little bit about some of the definitions set out in clause 4 such as the “annual repayment threshold”. It is established as being $19084 a year before the compulsory repayments kick in. That is not an awful lot of money. We have seen under this Government that that figure has not been adjusted in the sense that we might have hoped. It probably would have been under a Labour Government. People on very low incomes of only $19000 a year have to make repayments on their student loans and I think we may want to consider that situation in this current economic climate. I think everybody who borrows knows that they need to make their repayments. 
Amy Adams 
: Are you still talking Chris? Heavens above! Haven’t you finished talking yet? 
CHRIS HIPKINS 
: I say to Amy Adams that we are all earning $130000-plus a year. That might not seem like a lot of money to us in this House but for people earning $19000 a year who are making repayments on a student loan on top of the tax they have to pay—on top of the tax they have to pay—it is a considerable amount of money. 
Amy Adams 
: Talk about the bill. 
CHRIS HIPKINS 
: OK. Clause 4(1) contains the definition of “annual repayment threshold” I say for the member who does not seem to be aware of what is in the bill we are debating. 
Amy Adams 
: What’s the change to it Chris? What’s the change? 
CHRIS HIPKINS 
: I do not know. What has changed? It is in the bill; therefore it can be debated. The excitable Ms Adams I am sure will take the next call to talk about that. What has changed? The threshold has not changed which is the problem because it should have been. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I will talk about two specific elements of Part 1 of the Student Loan Scheme Bill. I have a question for the Minister in the chair the Minister of Revenue in relation to the first of those elements. Essentially a large part of what Part 1 does is increase the obligations on borrowers to do certain things. They are actually things that I support. For instance if someone is going to be away from New Zealand they have an obligation to tell the Commissioner of Inland Revenue where they are going to be how to contact them and how they can work on the loan scheme with the Inland Revenue Department. That is not necessarily a bad thing. In fact I think it is quite useful. 
Clause 14 is an example of a provision relating to changes to residency. But in particular I ask the Minister about clause 23 which is about the question of notifying the commissioner of absence from New Zealand of 184 or more days. The language here has changed. It very much talks about what a borrower must do. That is important. 
One of my concerns over a period of time has been the awareness of borrowers of their obligations when they leave the country. As somebody with a background in working on these issues both as a student politician working for a university and now as a constituency MP I ask the Minister about the intent around advertising of obligations. Will any more work be done to ensure that borrowers who leave New Zealand actually know what their obligations are? I agree regardless of whatever concerns I might have about the cost of tertiary education or the amount of debt that students have that once a borrower leaves New Zealand we want to make sure that that borrower is aware of their obligations and is meeting their obligations. It is not fair for someone to leave New Zealand disappear off the radar screen and not have to make repayments when somebody who stays in New Zealand and works hard is making those repayments. I would like to hear from the Minister about what is envisaged in terms of new ways of letting people know about their obligations which have been enhanced. There are already obligations—I acknowledge that—but this bill enhances those obligations and I think it is important that borrowers are made aware of them. I would like the Minister to let us know what happens there. 
I congratulate the Minister and the Finance and Expenditure Committee on the way in which some changes have been made not just in this bill but previously as well around the treatment of borrowers who are not in New Zealand but for the purposes of the law are treated as if they are—in particular people who work for the Government of New Zealand overseas which has always been the case. But the question of their partners is an important one and I think that is really useful. It is important to say today that if somebody is working overseas in the service of New Zealand is undertaking postgraduate study overseas or is undertaking voluntary work—and in schedule 1 there is now an explanation of what constitutes acceptable voluntary work for the purposes of this bill—for all of those people it is now possible for their partners to be treated as if they are in New Zealand. I think that is a very good thing. It is important that when people are overseas in the service of New Zealand they do not have to worry about things like interest on student loans. Clause 20 deals with that in particular as does schedule 1. Both of those are very good things. That is my question to the Minister around the advertising of borrowers’ obligations. 
The only other point I really want to make on Part 1 is about clause 10D “Student loan establishment fee”. As I said in my contribution to the second reading we are looking at a situation now where we are told in the regulatory impact statement that there will not be additional costs on the Inland Revenue Department. We are told that the computer system that the department is bringing in will in fact reduce costs. We are told that the electronic arrangements for borrowers to communicate with the department will in fact reduce costs. Yet in clause 10D the establishment fee for students goes up from $50 to $60. Later in Part 5 we will come to the new $40 management fee. So we are actually talking about a $50 increase in total in costs to borrowers on an annual basis. That seems to me to be a pretty big cost increase relative to a system that we are told will actually reduce the cost to the Government. 
That is why we on this side of the House are suspicious of this change as essentially being a revenue grab by the Government. We think that this looks like the reintroduction of interest by stealth. It looks to us as if a Government that wanted to bring in interest on student loans— 
Chris Tremain 
: Well why are you voting for it then? 
GRANT ROBERTSON 
: I say to Mr Tremain that as an Opposition we will vote for things that are good and useful like the electronic management— 
Chris Tremain 
: You just said that it looked like we’re introducing interest. 
GRANT ROBERTSON 
: Clearly Mr Tremain has not been listening to the second reading debate or to the Committee stage. Labour is supporting this bill because it brings in important changes around electronic management of student loans but just because we are supporting the overall intent of the bill that does not mean we have to support every single clause. Mr Tremain might like to take a call on clause 10D and tell us why the administration fee is going up to 60 bucks. Then when we get to Part 5 he might like to take a call on why a new fee of $40 is being introduced at a time when we are told the loan scheme itself will become more affordable to the Government because of the other changes in the bill that we do support. 
It really does look like the introduction of interest by stealth because this is a National Government that will not go through on what it said earlier: that it wanted to reintroduce interest to the student loan scheme. Mr Finlayson wants to introduce interest to the student loan scheme; I know that. Lots of members on the other side of the Chamber do but they have decided for political reasons that they are not going to so something has been brought in by the back door to increase the establishment fee to $60 and Part 5 will bring in the new fee of $40. Members on this side of the Chamber have real concerns about that. 
Although there are some very good elements to Part 1 in this bill clause 10D is one that members on this side of the Chamber find very difficult to support because it looks like it is the National Government trying to reintroduce interest by stealth. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I will pick up from where Grant Robertson left off on clause 10D of the Student Loan Scheme Bill. I think calling that aspect of the bill interest by stealth is rather charitable to the Minister in the chair the Minister of Revenue. Let us be honest: this is a flat fee regardless of how large a person’s student loan is and regardless of what their income is. When we get that type of tax the name for it is “poll tax”. That is what that fee is: it is a poll tax on graduates and students. I think “interest by stealth” is one name for it but frankly that is rather charitable. Let us call it what it is. 
That is not really what I wanted to focus on. I will go back to the purposes of the legislation. Clause 3 states: “The purposes of this Act are to—(a) provide for the effective administration of student loans; and (b) provide for the collection of student loan repayments;”. I have a question for the Minister because I have an example of a bizarre set of circumstances that happened to me in relation to my student loan and I wonder how often this happens. 
I completed repayments on my student loan earlier this year. 
Hon Member 
: Well done! 
IAIN LEES-GALLOWAY 
: Yes it was a day to celebrate it has to be said. I checked with the Inland Revenue Department I got the repayment balance and I even got a letter from the Inland Revenue Department saying that my balance was zero. I had completely paid off my student loan. Strangely enough only a few weeks ago I got a letter from the Inland Revenue Department informing me that I had to change my tax code back to MSL as did the payroll here at Parliament and I started making compulsory repayments of my student loan. I am now $500 in credit. The Inland Revenue Department now owes me $500 in overpayments on my student loan. I would hardly call that the effective administration of the collection of repayments by the Inland Revenue Department. 
Grant Robertson 
: Get Peter Dunne to write you a cheque. 
IAIN LEES-GALLOWAY 
: I do not expect a cheque from Peter Dunne. I have been reliably informed by the lovely person I spoke to at the Inland Revenue Department when I finally got through—the person to whom I spoke was fantastic—that I would have that money back by October. So I am very pleased that I will be able to get that back. 
I have a question for the Minister about how often people who have organised themselves to make sure they have made the exact repayment required and have faithfully and dutifully made the repayments that they need to make and are required to make by law then find that through some error by the Inland Revenue Department they have to overpay. The Inland Revenue Department then has to make a payment back to that person due to the ineffective administration of student loans. Given that that is one of the main purposes of this bill I would be very interested to hear from the Minister how often that happens and whether he has any plans to rectify that situation. 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Chairman. He mihi nui ki a koutou. Kia ora. It is great to take a call in the Committee stage of the Student Loan Scheme Bill. I will not harp on about the use of urgency to pass this law but I just want to note that a wide discussion is happening online by people asking why Parliament is under urgency to pass this law and other laws on the Order Paper. People are baffled because they do not see the urgency in this. What it does is reduce the public’s perception of the use of urgency in Parliament. I just wanted to note that before I start. 
I will take a look at three parts of Part 1 of this bill: clauses 10D 4(1)(a) and 21. But first I acknowledge the debate of Chris Hipkins who is no longer in the Chamber. Chris Hipkins was the student president when I first studied as an undergraduate at Victoria University. We have had a robust discussion with Labour members about what they did and did not do when they had the opportunity when Labour was in Government. I quite rightly remember the member Chris Hipkins when he was the student president vocally opposing the Labour Government for not acting fast enough on student loans. But I will not harp on about that point either. I acknowledge that the Labour Government did take interest off student loans— 
The CHAIRPERSON (Lindsay Tisch) 
: I am sorry to interrupt the honourable member. The time has come for me to leave the Chair for the State farewell for His Excellency the Governor-General. In accordance with that decision of the House yesterday the Committee is temporarily suspended. The Speaker will resume the Chair at the ringing of the bells. 
Debate suspended. 
Sitting suspended from 11.45 a.m. to 2.20 p.m. 
House resumed. 
Questions to Ministers 
Youth Unemployment—Rates 
1. 
Hon PHIL GOFF (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he stand by the statement made on his behalf in answer to Oral Question No 4 yesterday that “there is room for celebration in some of this” regarding youth unemployment rates? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 I stand by the full statement made on my behalf: “There is room for celebration in some of this. For example Maori youth unemployment rates have gone from 30.3 percent in June 2010 to 24.8 percent now. That is still too high … but we are tracking down. There is a long way to go but 43000 new jobs last year—15000 of them for young people—is a good start.” 
Hon Phil Goff 
: What is there to celebrate in the June quarter household labour force survey which shows that nearly 33 percent of teenage Maori are unemployed and that nearly 42 percent of 15 to 19-year-old Pasifika are unemployed? Are these figures not evidence of the total failure of his youth unemployment policies? 
Rt Hon JOHN KEY 
: There were a number of things to celebrate in the household labour force survey that was just recently released. We had an unemployment rate that was steady but we were creating new jobs. There was also a considerable amount of cash put into Budget 2011 for the creation of jobs; around $55.2 million went into a number of programmes. As the Minister for Social Development and Employment noted yesterday there actually has been a reduction in the Maori and Pacific youth unemployment rates. 
Hon Phil Goff 
: I raise a point of order Mr Speaker. You will recall that my question specifically asked what there was to celebrate about 33 percent of Maori teenagers being unemployed and 42 percent of 15 to 19-year-old Pasifika. The Prime Minister ignored commenting on either of those figures. 
Mr SPEAKER 
: If the member had cut his question at that point then he would be absolutely right but he went on to talk about those things being indicative of a failed Government youth policy. The Prime Minister pointed out in his answer why he did not see Government youth policy as having failed. So the remedy is in the hands of the questioner. 
Hon Phil Goff 
: Is he celebrating the fact that under his watch as Prime Minister the unemployment rate for 15 to 19-year-old people in New Zealand is at the highest proportion ever since the Great Depression? 
Rt Hon JOHN KEY 
: That is a very interesting statement by the Leader of the Opposition. Statistics New Zealand has actually been recording the data since 1986 so not quite back to the Great Depression I say as a starting point. 
Hon Ruth Dyson 
: That’s not true. 
Rt Hon JOHN KEY 
: It is true actually. The member can go and check it out if she wants. The second thing is that yes the household labour force survey shows that the unemployment of people it considers in the 15 to 19-year-old age group is from New Zealand’s perspective high at 24.9 percent. But yesterday the Leader of the Opposition came to the House and told us that was the highest rate in the OECD. Let us just for the purposes of clarification run through a few countries that have a higher rate of unemployment than the household labour force survey shows for 15 to 19-year-olds: Belgium 35 percent; the Czech Republic 39 percent; Estonia 59 percent; Finland 28 percent; France 29 percent; Greece 39 percent; Hungary 45 percent; Ireland 46 percent; Italy 45 percent; Poland 30 percent; Portugal 34 percent; the Slovak Republic 61 percent— 
Mr SPEAKER 
: I think the answer has been long enough. 
Hon Phil Goff 
: I seek— 
Hon Member 
: Apologise! 
Hon Phil Goff 
: I certainly do not apologise for telling the truth. 
Mr SPEAKER 
: Let me just refresh the memories of members. If I have to evict someone today they will be out for the rest of this week so we will have a little order. I do not blame the Leader of the Opposition totally then although he should not have done that. There was obviously an interjection during a point of order which caused that reaction. But we will not have interjections or any other comments. 
Hon Phil Goff 
: I seek the leave of the House to table some statistics from the Parliamentary Library that go back to 1986 and show that the 27.6 percent unemployment rate for those 15 to 19-year-olds is by far the highest rate we have had since that date and is even much higher than it was in the dark days of the early 1990s. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Hon Phil Goff 
: Does the Prime Minister stand by his claim that 60 percent of the 58000 New Zealand young people under 24 who are described as not in employment education or training are actually at school or at university? 
Rt Hon JOHN KEY 
: Yes. 
Hon Phil Goff 
: I seek leave to table a document which is an email from Andrew McLaren of the servicing and analysis team at Statistics New Zealand saying explicitly that those people are not in employment education or training. They cannot be at school or university. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Hon Phil Goff 
: Does the Prime Minister still say that 60 percent of those classified by Statistics New Zealand as not being in employment education and training are at school or university? 
Rt Hon JOHN KEY 
: Yes. The reason for that is that the member will be wrong like he was wrong yesterday when he came to the House and said the New Zealand teenage unemployment rate had trebled under National’s watch. Actually it went from 18 percent to 28 percent so not even by Phil Goff’s maths is that a trebling. It is like when he came to the House yesterday and said the unemployment rate for 15 to 19-year-olds had increased from less than 10 percent when National took office to 28 percent. In fact it went from 18 percent to 28 percent. It is like he said— 
Mr SPEAKER 
: Order! 
Rt Hon JOHN KEY 
: Well he— 
Mr SPEAKER 
: Order! 
Hon Phil Goff 
: When the Prime Minister just now denied that the number of people aged 18 to 24 on the unemployment benefit had trebled was the Minister for Social Development and Employment wrong in her answer to written question No. 6058 which shows a 733 percent increase in the number of 18 to 24-year-olds on the unemployment benefit? 
Rt Hon JOHN KEY 
: I do not have that written question and answer but I can tell the member that at December 2008 the unemployment rate for teenage people was recorded by the household labour force survey as 18 percent. In June 2011 it was 28 percent and that is not a trebling. 
Hon Phil Goff 
: I seek leave of the House to table the written question— 
Mr SPEAKER 
: We do not do that. Does the member want to ask a supplementary question? 
Hon Phil Goff 
: When is the Prime Minister going to front up and admit that his unemployment figures are wrong that he is conning the public and that the situation has got worse than it has ever been regarding the proportion of young people who are unemployed? 
Rt Hon JOHN KEY 
: Firstly I do not come to the House like Phil Goff did yesterday and make four or five different errors. I get my numbers right. 
Hon Rick Barker 
: I raise a point of order Mr Speaker. The member has been asked a question. He has to answer the question and not simply relitigate— 
Mr SPEAKER 
: I do not believe I need any assistance on this. When a Minister is accused in the question asked of conning the public the questioner can expect to get fair measure back. 
Rt Hon JOHN KEY 
: As I said the member came to the House yesterday and said the New Zealand Institute reports that the youth unemployment rates in New Zealand are the highest of any developed country. I did not even get through the list; actually you cut me off Mr Speaker because of the amount of time I had spent. 
Hon Phil Goff 
: You are just conning the public John and you know it. 
Rt Hon JOHN KEY 
: Well let us just for the purpose of economics run through a few options. There are three measures of looking at unemployment in New Zealand. The household labour force survey indicates whether a person is looking for 1 hour’s work and 60 percent of the 15 to 19-year-olds they rang up in that survey were in training work school or basically university. 
Hon Annette King 
: That’s not what Stats said. 
Rt Hon JOHN KEY 
: It is absolutely correct. 
Hon Ruth Dyson 
: That is not the figures— 
Rt Hon JOHN KEY 
: Well it is a matter for clarification. The second way of looking at it is basically to look at those who are on an unemployment benefit and what we know is that in the last 18 months for young people aged 18 to 24 that number has fallen from 23000 to 16500. For the record that was the way that the previous Government used to look at people who were unemployed in New Zealand. 
Hon Members 
: Get your facts right. 
Hon Phil Goff 
: I raise a point of order Mr Speaker. That interjection was characteristic of the problem I am having as a member of this House. I am being told to get my facts right but I have in my hand all of the documents from which my comments have been made. I seek leave of the House to table those documents now. 
Mr SPEAKER 
: I am on my feet if that has escaped the member. The member chose to use certain language in his question and the Prime Minister was somewhat measured in responding. He explained why in his view he was not conning the public: he went back to the basic statistics. I do not believe that the member has anything to complain about in that answer given the question he asked. 
Hon Phil Goff 
: I seek leave of the House to table a document which is the New Zealand Institute discussion paper 2011/1 which says that actually our youth population has the highest share of unemployment of any youth population in the OECD which the Prime Minister denied. 
Mr SPEAKER 
: Is this the New Zealand Institute of— 
Hon Phil Goff 
: The New Zealand Institute. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Hon Phil Goff 
: I seek leave of the House to table this email from Andrew McLaren of the servicing and analysis team Statistics New Zealand which says the 58000 people were not in employment education or training and had no apparent home duties that required them to stay out of the labour force. 
Mr SPEAKER 
: Can I just check that that is not the same document that the member sought to table a while ago? 
Hon Phil Goff 
: No I asked before I think to table a different document which was the Parliamentary Library statistics. 
Mr SPEAKER 
: No there was an email— 
Hon Phil Goff 
: Oh did I? OK that is the same document. 
Mr SPEAKER 
: I understand that leave has already been granted for that document to be tabled. 
Hon Phil Goff 
: How is the $20 million— 
Hon Paula Bennett 
: Stop confusing the “neets” with the unemployment rate. 
Hon Phil Goff 
: Are you finished? 
Mr SPEAKER 
: I want to hear the question from the Leader of the Opposition. 
Hon Phil Goff 
: How will the $20 million estimated expenditure on youth unemployment that he announced on Sunday be adequate when Budget 2011 shows that this Government has cut $145.8 million from industry skills training and when the Minister for Social Development and Employment said most of that money will not go into skills training but go into early childhood services for teenage mums? 
Rt Hon JOHN KEY 
: Let me take the first point which is about the $145 million. That was over multiple years— 
Hon Phil Goff 
: 5 years actually. 
Rt Hon JOHN KEY 
: That is right; 5 years. Thank you for clarifying it because yesterday the Leader of the Opposition came to the House and said that was an annual number. That is what he said yesterday; $145 million this year he said yesterday. It all kind of changes depending on which day of the week it is but that is OK—no big drama. Then No. 2— 
Hon Phil Goff 
: You can’t keep conning the whole of New Zealand. You’re wrong on everything you’ve said. 
Rt Hon JOHN KEY 
: Actually let us go through the conning bit. Let us understand why a National Government actually reduced that number by $145 million over those 5 years and what actually happened to that money. That was a scheme run by Labour in 2008 whereby 96831 people on it did not get one single credit. If they on that side of the House want to spend millions of dollars of taxpayers’ money—[ 
Interruption 
] 
Mr SPEAKER 
: I think the Prime Minister has made his point perfectly clearly. 
Chris Tremain 
: I raise a point of order Mr Speaker. On that particular occasion the Prime Minister had been accused of conning the— 
Mr SPEAKER 
: We are not going to go down that track. I assessed that the Prime Minister had made his point reasonably in response to the question and that sufficient time had been taken on it. I accept the basis of the point the member was making. 
Question No. 1 to Minister interrupted. 
Question to  
Leader 
 of the Opposition 
Youth Unemployment— 
Rates 
Hon JOHN BOSCAWEN (Leader—ACT) 
: 
 I seek leave of the House to ask a question of the honourable Leader of the Opposition. 
Mr SPEAKER 
: I guess it is possible for members to ask questions of members. Leave of the House is sought for that purpose. Is there any objection? No. I trust it is in order but let me just check with the Clerk to make sure there is no Standing Order against that. Normally a question to a member is to do with the member’s responsibilities but leave has been granted to the member. 
Hon JOHN BOSCAWEN (Leader—ACT) 
 to the  
Leader of the Opposition 
: 
Given that he is so concerned about youth unemployment what responsibility do he and his colleagues take for the dramatic rise in youth unemployment after youth rates were cancelled making it illegal for a young person to take a job at less than $13 an hour? 
Hon PHIL GOFF (Leader of the Opposition) 
: 
 It is just as well that the question was asked of the Leader of the Opposition because the Prime Minister does not give answers. [ 
Interruption 
] 
Mr SPEAKER 
: I ask members why it was difficult to see me on my feet. There was absolutely no reason to give an answer like that at all given the question was asked of the Leader of the Opposition. Actually I should point out that things have changed a bit since the Leader of the Opposition was last a Minister. 
Hon PHIL GOFF 
: The answer is that at the time that Labour left office youth unemployment was a third of the level that it is now. It was at that level because a Labour Government actually invested in skills training for people a Labour Government created 350000 new jobs and a Labour Government reduced the number of people on unemployment benefits to 17000 and that is a track record I am really proud of. The Prime Minister would do better to halve that. 
Chris Tremain 
: Supplementary question Mr Speaker. 
Mr SPEAKER 
: No no. The House did not grant leave for supplementary questions. 
Hon John Boscawen 
: I raise a point of order Mr Speaker. I asked the honourable Leader of the Opposition a specific question. He did not answer that question. [ 
Interruption 
] He was— 
Mr SPEAKER 
: Let me deal with this problem. I say to some members that I have warned them once already. If I evict someone today they will be out for the rest of this week. Points of order will be heard in silence. 
Hon John Boscawen 
: Thank you Mr Speaker. I asked leave of the House to ask a question of the Leader of the Opposition. That leave was granted. I am entitled to have my question answered. The question specifically asked what responsibility the Leader of the Opposition and his colleagues take for the dramatic rise in youth unemployment since the minimum wage for 16 and 17-year-olds was dropped. The Leader of the Opposition pointed to the dramatic rise in youth unemployment. We already know about that. What I am asking is what responsibility he and his colleagues are prepared to take for the dramatic situation that young New Zealanders find themselves in.  
Mr SPEAKER 
: I have heard the member’s point and in fairness to the Leader of the Opposition he cited figures for unemployed young people if I recollect correctly when his Government left office and he made further comments about the changes in levels of unemployment. In other words he was in many ways refuting the question of the member which he is entitled to do in answering a question. I do not believe that I can pull him back any tighter to the question than that. 
Chris Tremain 
: Supplementary question Mr Speaker. 
Mr SPEAKER 
: No there are no supplementary questions. Is this a supplementary question to question No. 1 to the Prime Minister? I thought we had moved beyond question No. 1 because the House gave leave for a question to a member. I suppose leave was sought without my having moved to question No. 2 so I will accept a supplementary question on question No. 1. 
Question No. 1 to Minister resumed. 
Questions to Ministers 
Youth Unemployment—Rates 
Chris Tremain 
: How many 15 to 19-year-olds are unemployed now? 
Rt Hon JOHN KEY 
: Good question. If we look at the household labour force survey we see that there are 26700 people in the 15 to 19-year-old category. Of those 60 percent are in school university training or study of some sort which leaves 15000 in that category. It is worth making the point that that is 5 percent of the entire number of 15 to 19-year-olds in New Zealand. It is very easy to overstate a problem. 
Economy Stimulus—Government Policies 
2. 
TIM MACINDOE (National—Hamilton West) 
 to the  
Minister of Finance 
: What steps has the Government taken to increase incomes and to give businesses the confidence to invest and create new jobs? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The Government has taken many steps including long-term investment in infrastructure reforming the tax system to reward savings and productive investment lifting education standards cutting red tape continued reform of the public sector and investing heavily in science and innovation. All of this is helping to build business confidence because in the end sustainable jobs come from confident businesses investing and feeding off the proceeds of New Zealand selling its goods to the world not off unsustainable jobs from fast-growing government and debt-funded housing booms. 
Tim Macindoe 
: What are some of the positive results from the Government’s economic programme? 
Hon BILL ENGLISH 
: One positive result is that the New Zealand economy has grown in seven of the past eight quarters and in this 12-month period is likely to grow faster than the Australian economy. But probably the most important thing is the fact that these policies have assisted with the creation of 43000 new jobs in the past 12 months. Treasury predicts that if we can stay on track with sensible policies about 170000 new jobs will be created over the next 4 years. 
Tim Macindoe 
: In terms of rising incomes how has the increase in the after-tax average wage left more money in the pockets of hard-working New Zealanders? 
Hon BILL ENGLISH 
: Changes in the after-tax average wage are a combination of wage increases and tax reductions. We do not know the situation of every New Zealander but the after-tax average wage is rising faster than inflation. In the year to March the after-tax average wage rose 7.4 percent compared with inflation of 5.3 percent which is a real increase of 2.1 percent after all cost of living increases and the one-off rise in GST. Households on those wages are enjoying the benefits of the lowest interest rates in 45 years. 
Tim Macindoe 
: What policy ideas would undermine economic confidence and put the good progress to date at risk? 
Hon BILL ENGLISH 
: Any policy ideas that undermine business confidence with unnecessary red tape and any policy ideas that mean more spending and expansion of government and particularly spending that is financed by higher taxes and more debt. These would be corrosive of growth in New Zealand but also would make the New Zealand economy more vulnerable when the world is so volatile and unpredictable. 
Hon Trevor Mallard 
: When does Treasury project that his policies will return unemployment back to 4.3 percent which it was when he took office? 
Hon BILL ENGLISH 
: I do not think the forecasts show a return to that but the member will not be taken seriously until he understands that that unemployment rate was based on unsustainable economic growth fed by rapid Government spending— 
Mr SPEAKER 
: It was a fairly straight question. 
Hon Trevor Mallard 
: I seek leave of the House to table a document prepared by the Parliamentary Library showing that Treasury forecasts that by 2025 the 4.3 percent rate will not have been attained. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Hon Trevor Mallard 
: How many jobs were created in the last quarter under his Government’s policies and how does that number compare with the growth of the working-age population? 
Hon BILL ENGLISH 
: I cannot give the member those numbers but in the last 12 months 43000 jobs were created. That is a major achievement given that it was done during the fallout from a global recession. What is more they are real and sustainable jobs not jobs based on excessive borrowing for a housing boom and a rapid expansion of Government spending which was unsustainable and unaffordable. 
Hon Trevor Mallard 
: I seek leave to table a document prepared by the Parliamentary Library that shows that the number of persons employed in the last reported quarter increased by 1000 whereas the working-age population increased by 5000. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Animal Welfare—Colony Cage Systems for Hens 
3. 
SUE KEDGLEY (Green) 
 to the  
Minister of Agriculture 
: Has he had the opportunity to view the new colony cage systems for hens which the National Animal Welfare Advisory Committee is proposing will replace battery hen cages; if so does he believe they are acceptable from an animal welfare perspective? 
Hon DAVID CARTER (Minister of Agriculture) 
: 
 To the first part of the question yes I have; to the second part of the question I do not believe that it is in the public interest to express a personal point of view at this stage as I am awaiting the delivery of a code of welfare that is being prepared currently by NAWAC the National Animal Welfare Advisory Committee. 
Sue Kedgley 
: I raise a point of order Mr Speaker. The Minister is the Minister responsible for animal welfare as well as for MAF—the Ministry of Agriculture and Forestry. He has told us that he has been to see these new cage systems. I think it is perfectly reasonable to ask him for his opinion. 
Mr SPEAKER 
: The Minister is perfectly at liberty on the grounds given not to express a personal opinion. We cannot force Ministers to give personal opinions. He advanced perfectly reasonable grounds for not expressing a personal view. 
Sue Kedgley 
: Has the taxpayer contributed funding towards the trial of the new colony cage systems through the Ministry of Agriculture and Forestry’s Sustainable Farming Fund; if so how much? 
Hon DAVID CARTER 
: I am not aware of any funding from the Sustainable Farming Fund going towards the testing of the new colony cage system. I am certainly aware that through Vote Agriculture we fund the work of the National Animal Welfare Advisory Committee. 
Sue Kedgley 
: I seek leave to table details of a Sustainable Farming Fund project that show that $390000 was contributed towards the colony cage system. 
Mr SPEAKER 
: What is the source of the document? 
Sue Kedgley 
: It is from the Ministry of Agriculture and Forestry’s website. 
Mr SPEAKER 
: Leave is sought to table this document from the Ministry of Agriculture and Forestry’s website. Is there any objection? There is objection. 
Sue Kedgley 
: Does he agree that taxpayers and the media should be able to view the new colony cage systems so that they can see for themselves how the Ministry of Agriculture and Forestry’s money has been spent and whether the new cages provide good welfare for the hens; if not why not? 
Hon DAVID CARTER 
: It would be useful if the public was more aware of the benefits of such systems of farming. The difficulty in allowing some people to view the systems is that from past experience they have not respected the privilege of being allowed into these places. In many cases there was also quite a considerable biosecurity risk in allowing members of the public into quite intensive farming systems. 
Sue Kedgley 
: As the Egg Producers Federation is refusing to allow any members of the media to see the new colony cage systems would he be prepared to go on one tour of the colony cage project and take members of the media with him; if not why not? 
Hon DAVID CARTER 
: As I said in an earlier answer to a question I have already had the opportunity of having a very good look at these systems. I think they are a considerable improvement on the current system. We need to allow this work to be done by the National Animal Welfare Advisory Committee in a non-emotional scientific way so that we can deliver credible codes of welfare to this industry as we do to other industries. 
Sue Kedgley 
: Does he agree that the reason for the excessive secrecy surrounding the trial could be a fear that if people were able to see the cages for themselves they would consider them to be unspeakably cruel; if not why not? 
Hon DAVID CARTER 
: No I do not accept that for one minute. 
Sue Kedgley 
: Why has the Ministry of Agriculture and Forestry spent hundreds of thousands of dollars assisting the egg industry to move from one cruel cage system to another instead of requiring the industry to shift to free-range or barn systems? 
Hon DAVID CARTER 
: We need to wait for the finalisation of the code of welfare before we know which recommended system will be available to New Zealand egg producers. I am aware that if we were to shift to a completely free-range system then the cost of egg production in this country would dramatically increase. 
Welfare Reforms Youth Initiatives—Payment Card Proposal 
4. 
Hon ANNETTE KING (Deputy Leader—Labour) 
 to the  
Minister for Social Development and Employment 
: Does she stand by all her answers to Oral Question No 7 yesterday? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 Yes. 
Hon Annette King 
: In light of her answer yesterday that the Government has announced radical changes for young people and “We will be intervening.” what led her to make that decision? 
Hon PAULA BENNETT 
: Concerns for 16 and 17-year-olds who are not in education employment or training and also a real level of concern for teen mothers some of whom get some great education through the teen parent units but others do not and it felt really unequal and uneven. We felt that we could put better support around them as well. 
Hon Annette King 
: Does she believe that the use of a special credit card for people on a benefit that prohibits the purchase of alcohol and tobacco would require the Crown to make moral judgments about individuals’ decisions; if not why not? 
Hon PAULA BENNETT 
: I see the fact that they cannot buy cigarettes or alcohol to be quite honest as quite a side issue. It is more that we are paying their rent directly so that they have a roof over their heads. I see their being able to have utilities the use of a payment card and an in-hand allowance on top of that as being quite a responsible thing to do for teenagers as young as 16 and 17 years old. 
Hon Annette King 
: Does she believe that the sort of oversight proposed by the Prime Minister on Sunday would be highly intrusive and rob individuals of their freedom of choice; if not why not? 
Hon PAULA BENNETT 
: Actually in some respects yes; I do think it is quite intrusive and I do think it is quite hands-on. But we are talking about young teenagers and we are talking about in general ones who have had pretty rough upbringings at times. Some really do not know what to do. If they were my kids then I would actually be wanting to wrap more support around them and to put a few more controls in place so that is what we are doing. 
Hon Annette King 
: Does she believe that this kind of oversight spread across the benefit system would impose an enormous administrative burden and cost upon Work and Income? 
Hon PAULA BENNETT 
: The policy announced was for 16 and 17-year-olds and some teen parent 18-year-olds not across the whole benefit system. 
Hon Annette King 
: Does she believe that because a small minority of income support recipients do not use their moneys prudently this should lead to changes to the way in which welfare is paid or assessed; if not why not? 
Hon PAULA BENNETT 
: It is less about whether they are using their money prudently and more about offering them the sort of support this package will offer. The other part of it is that they have to be attached to a non-governmental organisation that wraps support around them. That could be a Maori organisation that stays with that young teenager for some time as they go through a period of adjustment or it could be not as hands-on as that depending on where they are at. 
Hon Annette King 
: Did she send a letter to a businessman on 14 March this year saying a payment card for people on a benefit that forbade alcohol and tobacco purchases would require moral judgments by the Crown would be highly intrusive would rob individuals of freedom of choice and would impose an enormous administrative burden on Work and Income and there was no need to change the way in which welfare is paid or assessed? 
Hon PAULA BENNETT 
: Yes possibly. What the member has not picked up is that actually the policy is for 16 17 and some 18-year-olds. I have said that I do actually see it as intrusive. I do think the administration that comes with it is worth it and I am backing these young people into a better life. 
Hon Annette King 
: I seek leave to table a letter addressed to a businessman dated 14 March from the Minister for Social Development and Employment in which she rejects the idea of changing the way welfare is paid or assessed. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Mr SPEAKER 
: Question No. 5 Louise Upston. [ 
Interruption 
] We have dealt with that question and that issue. I ask for some courtesy from the Labour front bench. 
District Health Boards Targets—Better Help for Smokers to Quit 
5. 
LOUISE UPSTON (National—Taupo) 
 to the  
Minister of Health 
: How have district health boards improved support for their communities through the preventative health target ‘Better Help for Smokers to Quit’? 
Hon TONY RYALL (Minister of Health) 
: 
 In less than 2 years we have gone from zero to 90 percent of hospital patients in nine district health boards offered help to stop smoking. Smoking kills an estimated 5000 people in New Zealand every year and affects the quality of life of thousands more. The Lakes District Health Board is the first district health board in the country to achieve 100 percent for one of the Government’s three preventive health targets. In the last 3 months every smoker admitted to its hospitals in Rotorua and Taupo was offered advice to help quit which adds an estimated 433 years of life to the district. They achieved this fantastic result by engaging with staff and creating competition between the wards each month. Red was bad; in this quarter every ward turned the traffic lights green. 
Louise Upston 
: What other progress has been made towards better health for smokers? 
Hon TONY RYALL 
: Progress is being made across all the district health boards on the Better Help for Smokers to Quit national preventive health target. In Nelson which I visited earlier today they have reached the 90 percent target which is an incredible increase from just 14 percent 2 years ago. The Government has also passed an unprecedented 30 percent increase in tobacco tax and Quitline is reporting record numbers of calls and quit attempts—up 50 percent since the tobacco tax was introduced. We have backed up this effort with massively improved access to smoking cessation treatments—up 82 percent in 18 months. This Government is taking practical and effective steps to prevent and discourage smoking. 
Rahui Katene 
: Does he agree with Patrick Basham who during his visit sponsored by tobacco corporate Philip Morris criticised New Zealand’s support of plain packaging; if so will the Government give in to the cancer conspirators who seek to slow down the remarkable progress achieved in this term in making New Zealand smoke-free particularly through the leadership of Maori Party Minister Tariana Turia? 
Hon TONY RYALL 
: No I do not agree with those comments from Mr Basham but I do agree with the information outlined in a recent  
New Zealand Medical Journal 
 article that demonstrates that plain packaging has two main benefits for public health: it removes or minimises brand elements that promote the product and it facilitates more effective dissuasive packaging. 
Fonterra—Meetings with Prime Minister 
6. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
 to the  
Prime Minister 
: Has he met with Fonterra in his capacity as Prime Minister in the last month; and if so what undertakings if any did he give them? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes I met with Fonterra on 8 August. The purpose of the meeting was to discuss Trading Among Farmers—TAF. Fonterra was advised that the Government remains committed to progressing legislation to allow Trading Among Farmers as long as various public policy concerns were addressed to the Government’s satisfaction. It was also made clear to Fonterra that this was unlikely to happen before the election. 
Hon Lianne Dalziel 
: When the Prime Minister gave an undertaking to Fonterra that legislation to allow Trading Among Farmers was on schedule for early next year did he say that that was subject to the completion of all of the inquiries; if so why did he say “early next year”? 
Rt Hon JOHN KEY 
: I cannot recall that particular part of it. In looking at the notes I do know that the issue of inquiries was raised because the Minister of Agriculture made it clear during the meeting with Fonterra that the Government would be supporting the Commerce Committee’s inquiry into milk pricing. 
Hon Lianne Dalziel 
: Does he agree that the price of milk is central to changes to allow Trading Among Farmers; if so why would he give an assurance to Fonterra that legislation would be scheduled for early next year before current investigations into milk pricing are complete or is the Government not serious about those inquiries? 
Rt Hon JOHN KEY 
: Well we are but the issue I think is in relation to farm-gate pricing. The Ministers who were present at the meeting said to Fonterra that the Government wanted to ensure that there was a robust dynamic and enduring regime for the setting of Fonterra’s farm-gate milk price. That concern existed irrespective of Trading Among Farmers and that was why the interdepartmental work was taking place. 
Hon Lianne Dalziel 
: What did he say to convince Sir Henry van der Heyden that he had done the right thing in not trying to push Trading Among Farmers through in the lead-up to the election and was it related to Fonterra’s decision to freeze the price of milk until after the election or that the select committee inquiry would be stalled as long as possible? 
Rt Hon JOHN KEY 
: No the issue is House time. 
Hon Damien O’Connor 
: Has he discussed Trading Among Farmers with NZX Chief Executive Officer Mark Weldon; if so what undertaking has he given him? 
Rt Hon JOHN KEY 
: I do not recall any discussions with Mark Weldon about that certainly not in the last year or so. Certainly in previous times I have said to him that it would be great to have Fonterra as a listed company but that is my own view in the sense that I think Fonterra needs to raise more capital if it wants to be a global player of significance and size. 
Hon Lianne Dalziel 
: I seek leave to table an email from Henry van der Heyden dated 12 August 2011 reporting on a good meeting with the Prime Minister saying that for legislation for Trading Among Farmers early next year was on schedule and that he was convinced the right thing was done in not trying to push it through in the lead-up to the election. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Prisons—Smoking Ban 
7. 
Hon TAU HENARE (National) 
 to the  
Minister of Corrections 
: What reports has she received on the implementation of the smoking ban in New Zealand prisons? 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 I am very pleased to advise that all New Zealand prisons have successfully been smoke-free for 6 weeks. This is the result of careful planning and 12 months’ hard work by corrections staff supported by the Ministry of Health and Quitline. There has been a noticeable improvement in air quality within prison units. There has also been a 77 percent reduction in the number of fires and arson-related incidents. There were only four such incidents in July compared with 18 in the month prior to the ban. I would like to congratulate the Department of Corrections on the successful implementation of the new policy which is making our prisons a much safer and healthier place in which to work. 
Hon Tau Henare 
: What other results has her department seen from the introduction of smoke-free prisons? 
Hon JUDITH COLLINS 
: In working closely with prisoners to prepare them for the change staff have noticed an overall improvement in prisoner attitude and conduct. There have also been reports of prisoners actively encouraging their family and friends in the community to quit smoking. The successful implementation of the ban has attracted significant interest from overseas jurisdictions particularly from Australian states that are keen to learn from our experience. 
Benefits Eligibility—Prime Minister’s Statements 
8. 
CATHERINE DELAHUNTY (Green) 
 to the  
Prime Minister 
: Does he stand by his reported statement that it could be fraudulent to apply for a benefit if you were not eligible? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 I think the member misquotes what was said. I said that it could be a fraud to lie about a benefit qualification but people wanting information about the matter should take that up with the Minister’s office—and I invite the member to do so. 
Catherine Delahunty 
: What steps does he consider a person uncertain of their eligibility for a benefit should take before making an application to ensure they do not risk being charged with fraud? 
Rt Hon JOHN KEY 
: They should contact a Work and Income office. 
Catherine Delahunty 
: Does he accept that any citizen has the right to apply for a benefit and that his comments on potential fraud will intimidate vulnerable people who need support? 
Rt Hon JOHN KEY 
: Yes and no. 
Catherine Delahunty 
: What survival advice can he offer people with literacy issues and mental health conditions that cause them to struggle to prove eligibility for the unemployment benefit which beneficiary advocates advise me is leading to homelessness and hunger? 
Rt Hon JOHN KEY 
: The country has Work and Income offices scattered right throughout it. They are filled with people who work very hard to make sure that people get the benefits that they are entitled to. Any New Zealander who thinks they are entitled to a benefit and who needs help should contact a Work and Income office. 
Catherine Delahunty 
: I seek leave to table the High Court judgment  
Stemson v Police 
 dated 19 December 2001 which affirms the right of any person to make an application for a benefit and the duty of Work and Income to facilitate rather than impede that process. 
Mr SPEAKER 
: Clarification is being sought. The document is? 
Catherine Delahunty 
: A High Court decision. 
Mr SPEAKER 
: But where is the document from? 
Catherine Delahunty 
: It is from the website—from the High Court. 
Mr SPEAKER 
: It is on a website from the High Court. Leave is sought to table that document. Is there any objection? There is objection. 
Adult and Community Education—Funding 
9. 
DAVID SHEARER (Labour—Mt Albert) 
 to the  
Minister for Tertiary Education 
: How many schools received government funding for Adult and Community Education classes in 2009 and how many schools are receiving government funding for Adult and Community Education programmes in 2011? 
Hon STEVEN JOYCE (Minister for Tertiary Education) 
: 
 Forty-nine schools currently receive taxpayer-funded ACE—adult and community education. They are made up of 23 schools funded directly and a further 26 that partner with those directly funded schools. Of course many other schools continue to offer hobby courses on a user-pays basis. Before the Government’s reprioritising of taxpayer-funded adult and community education to target foundation schools including literacy numeracy English language te reo Maori and sign language there were 212 funded schools. 
David Shearer 
: Does he think people in Northland with some of the country’s highest unemployment are being afforded an adequate opportunity to upskill given that there is now just one school providing adult and community education where there used to be 12? 
Hon STEVEN JOYCE 
: I should point out to the member that there is a range of ways in which people can access foundation education in New Zealand and yes schools’ adult and community education is one. We also have adult and community education in 27 tertiary education institutions 24 community groups seven OTEPS—other tertiary education providers—and two REAPs or Rural Education Activities Programmes. We also have foundation education where we have increased embedded literacy and numeracy from 15000 places to 70000 places; we have Youth Guarantee where there are 2500 places which will go to 7500 next year; and we also have trades academies and service academies—to name just a few opportunities. 
David Shearer 
: Will he consider restoring the $13 million pulled out of adult and community education funding to enable the 165000 New Zealanders who according to Adult and Community Education Aotearoa were forced to leave school and community classes to return to classes? 
Hon STEVEN JOYCE 
: No the Government does not have plans to restore that funding because as we know there are many challenges for Government finances at this time. Of course the Labour Opposition can add it to their long list of restarting funding things they are going to do by borrowing more money. But I point out that a number of schools are offering adult and community education without any funding whatsoever. For example Western Springs College is offering amongst other things the fabled Moroccan cooking class and Spanish tapas; Rangiora High School is teaching patchwork and botanical drawing and all these— 
Mr SPEAKER 
: I think we have heard sufficient of that answer. 
David Shearer 
: Does the Minister think that Mandarin courses provided by Mana College or sign language courses provided by Tikipunga High School Rutherford College Kelston Boys High School Tauranga Boys College and Tauranga Girls College before funding cuts were introduced are hobby classes and poor value for money? 
Hon STEVEN JOYCE 
: The Government has prioritised its funding as the member knows to languages literacy numeracy and ESOL—English for speakers of other languages—and then those funds are allocated by the Tertiary Education Commission based on funding applications. I do not believe taxpayers should be funding woodwork courses and beginners guitar courses and that is what we have stopped funding. 
David Shearer 
: Point of order Mr Speaker. 
Mr SPEAKER 
: I invite David Shearer to repeat his question. I have been concerned about a couple of the answers. The Minister may not have the particular information that was being sought but the questions were pretty straight questions relating to some sign language programmes in certain schools and nothing to do with woodwork. 
Hon STEVEN JOYCE 
: Speaking to the point of order Mr Speaker. 
Mr SPEAKER 
: I will hear the Minister briefly. 
Hon STEVEN JOYCE 
: The point I was trying to make was to outline for the member the Government’s funding approach which is to fund certain types of courses— 
Mr SPEAKER 
: I have heard sufficient. That is all very well but actually this is question time where certain questions are asked and answers to them are expected. While there may be points the Minister wishes to make if they do not relate to the question asked then they are not relevant to that question. I would have no problem with the Minister going on to include more information if the question had been answered but I am not sure the question was. I accept I could be wrong here and to avoid any further problem from my being wrong I will invite the member to repeat the question. If this was an isolated question I would not be doing this but there was an earlier supplementary question about specific programmes at schools in Northland; it may well be that the Minister did not have information on them but the answer did not relate a great deal to schools in Northland. That is why I am inviting the member to repeat his question at this stage. 
David Shearer 
: Does the Minister think that Mandarin courses provided by Mana College or sign language courses provided by Tikipunga High School Rutherford College Kelston Boys High School Tauranga Boys College and Tauranga Girls College before funding cuts were introduced are hobby classes and poor value for money? 
Hon STEVEN JOYCE 
: The point as I was saying to the member before is that I do not have an opinion obviously on those individual courses because I am not privy to them in particular but the Government’s role is to set policy in relation to what it is prepared to fund and it is prepared to fund language courses English for speakers of other languages courses and also literacy and numeracy courses. It is then for the Tertiary Education Commission to take a decision as to which courses it funds and those schools apply for them. I think that is an entirely correct approach. I went on to say that the Government does not believe that it should fund hobby courses and I listed some examples of what it does not believe it should fund. 
David Shearer 
: What does the Minister believe is better value for money: $116 to fund someone’s enrolment in an adult and community education course at a school or community organisation or $116 to buy 3 millimetres of tarmac on his “Holiday Highway”? 
Hon STEVEN JOYCE 
: That is hardly worth a response to the member except I would point out again the following: the Government spends massive amounts as it should do on improving literacy and numeracy in this country including foundation courses trade academies service academies Youth Guarantee and 16600 more core places in universities and polytechnics and I back this Government’s record in improving adult literacy and numeracy in this country well ahead of the previous Government’s. 
Question No. 1 to Minister—Amended Answer 
Rt Hon JOHN KEY (Prime Minister) 
: 
 I want to correct an answer I gave earlier to clear up any potential misunderstanding. I seek leave to do that. 
Mr SPEAKER 
: Leave is sought to make a personal explanation to correct an answer. Is there any objection? There is no objection. 
Rt Hon JOHN KEY 
: In question No. 1 Phil Goff asked me whether I stood by my claim that 60 percent of young people not in education employment or training are actually in school or university. I have never made that claim and I did not make that claim yesterday. I interpreted his question as relating to the number I gave yesterday in respect of unemployed young people whom we were talking about yesterday. So of course it is the case that young people not in education employment or training are not in education by definition. I have never made that claim. What I said and what is correct and true is that 60 percent of unemployed people in the household labour force survey aged 15 to 19 are at school or at university. 
Youth Unemployment—Youth Opportunities Package 
Hon Sir ROGER DOUGLAS (ACT) 
: 
 My question is to the Minister for Social Development and Employment— 
Mr SPEAKER 
: I want to be able to hear the honourable member asking a question. 
10. 
Hon Sir ROGER DOUGLAS (ACT) 
 to the  
Minister for Social Development and Employment 
: Why despite spending $160 million on the Youth Opportunities package has the unemployment rate for 15 to 19 year olds increased since she became Minister? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 The $160 million for the Youth Opportunities package was aimed at 18 to 24-year-olds in particular. Job placements through Job Ops Community Max industry partnerships and Youth Guarantee were particularly for those who were on the unemployment benefit and aged 18 to 24. It is clear that that has worked. We have seen a decrease in the number of 18 to 24-year-olds on the unemployment benefit from a peak of 23800 in January 2010 to about 16500 now in June. We have seen the number of 18 to 24-year-olds come down in the last 18 months and that is due mainly to the sort of package that has gone in. 
Hon Sir Roger Douglas 
: Given that youth unemployment has hit the roof since youth rates were abolished as is obvious in this chart here which demonstrates when youth rates were abolished and how the youth unemployment rate has gone up when will she act—when it goes through the roof or when it hits the sky? 
Hon PAULA BENNETT 
: As I said to the member we have been concentrating on those who are 18 to 24. We would like to see 16 and 17-year-olds in education or training hence the attention we have given them. What the member might like to look at though—and this is quite interesting—is that the unemployment rate for 16 and 17-year-olds from June 2010 went from 28.5 percent to 33.6 percent so we have seen a dramatic increase in the rate for 16 and 17-year-olds. However the number of 18 to 19-year-olds has been static from June 2010 to June 2011 at 20.7 percent. So there is most definitely a difference between the 16 and 17-year-olds and the 18 and 19-year-olds. 
Hon Sir Roger Douglas 
: Could the Minister confirm that the reason she has not acted is that last week’s National polling showed that it is more popular for her to keep sitting on her hands than actually doing what is right? 
Hon PAULA BENNETT 
: I shall not go to that member’s level of personal sort of attack but I will say that there has been a real focus on unemployed people in New Zealand. We have seen that kind of work going on as far as those Youth Opportunities are concerned. You know we are seeing that 90 percent of those who have done a Job Ops programme have not gone back on a benefit and that is most certainly a step ahead. 
Mr SPEAKER 
: Before I call the Hon Sir Roger Douglas I do not want to be unfair but I say to the Labour front bench that I just wish you could see yourselves. That was so discourteous. 
Hon Sir Roger Douglas 
: Given that the Minister appears unable to see the link between the abolition of youth rates and youth unemployment as shown on this graph could she advise whether this is caused by the fact that she truly does not understand the link between the two or by deliberate blindness? 
Hon PAULA BENNETT 
: The answer— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. Far be it from me to be the one who protects the Government but I think you recently ruled out as not being appropriate supplementary questions things that had far less assumption and a lot less irony in them than that did. 
Mr SPEAKER 
: The point I would make is that I have not actually ruled them out; I have normally let the Minister deal with them but if the questioner appeals to me for assistance I normally point out that the question was actually not in order. But I would rather not deprive the Minister of the opportunity to utilise such a question. 
Hon PAULA BENNETT 
: This Government has put a huge investment into working with those young people who are on the unemployment benefit and who really felt the effects of the global recession and a tight labour market. We are seeing positive results from that. We have fewer 18 to 24-year-olds on the unemployment benefit than we had 18 months ago. What we are doing is working. We now need to concentrate more on those 16 and 17-year-old “neets”—hence the weekend’s package—and as I say we are cautiously optimistic. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. Far be it from me to relitigate in my current circumstances but yesterday you ruled out a question when there was a suggestion that a Minister lacked confidence. You intervened yourself. On this occasion there was an intervention when a Minister was accused of being deliberately blind or similar and you did not intervene. 
Mr SPEAKER 
: I will hear the Hon Simon Power the Acting Leader of the House. 
Hon Simon Power 
: Just a point of clarification. If the member is referring to his own interjection yesterday— 
Hon Trevor Mallard 
: No—Annette’s question. 
Hon Simon Power 
: I am sorry; I misunderstood. 
Mr SPEAKER 
: If I have done that I apologise to the member—if I have been inconsistent. I will normally rule out only part of a question. If I recollect correctly it may have been only part of a question. But I normally do that only if it is pretty highly offensive. I did not think that was too highly offensive. I allowed a question today—I did not rule out a question today—from the member’s own leader when he suggested that a Minister was conning the public. I did not rule that out yet it is out of order obviously. But I do not want to be intervening all the time so unless it is highly offensive I tend not to rule them out. 
Catherine Delahunty 
: I seek leave to ask a question of the Hon Sir Roger Douglas. 
Mr SPEAKER 
: Leave is sought to ask a member a question to a member. Is there any objection? There is objection. 
New Zealand Defence Force—Ammunition and Explosive Storage Facilities 
11. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
 to the  
Minister of Defence 
: Why has he not provided substantive answers to Questions for Written Answer 6098 to 6102 (2011)? 
Hon Dr WAYNE MAPP (Minister of Defence) 
: 
 As the member knows I have provided an interim answer. The questions asked for a range of information particularly around the issues of investigating potential or historic environmental damage which has taken a bit of time to get. The information has been provided and the substantive answers will be given this week. 
Iain Lees-Galloway 
: Does he accept that the theft of ammunition from a Defence Force depot poses a serious threat to public safety and that he as Minister should be prepared to answer questions on the security of ammunition storage within expected time frames; if not why not? 
Hon Dr WAYNE MAPP 
: I am prepared. In fact I advise the member that I am meeting the Chief of Defence Force this afternoon with the member of Parliament for Northcote in whose electorate the Kauri Point facility is located with the intention of looking at an improved plan relating to security and also to the environmental protection of the ammunition. 
Iain Lees-Galloway 
: I seek leave to table a document titled the  
Mapp Report 
 which shows that Dr Wayne Mapp first became aware of security issues at Kauri Point before 16 May 2008. 
Mr SPEAKER 
: This is a new one—a member’s newsletter being tabled—but I will seek leave of the House. Leave is sought to table that document. Is there any objection? There is objection. 
Iain Lees-Galloway 
: Why when he has known for some time that there were security issues with the storage of ammunition did he do nothing about it and then refuse to answer questions when the safety of his own constituents was put at risk by a security breach? 
Hon Dr WAYNE MAPP 
: I assure the member on the first point that the safety of the ammunition per se is not actually at risk but there is clearly a need to upgrade security. There is a new management plan in place and I am meeting the Chief of Defence Force this afternoon to essentially take this whole issue forward to improve security. 
Border Control—SmartGate System 
NIKKI KAYE (National—Auckland Central) 
: 
 Mr Speaker— 
Mr SPEAKER 
: I have called Nikki Kaye and I want to hear the member at the back of the House. 
12. 
NIKKI KAYE (National—Auckland Central) 
 to the  
Minister of Customs 
: What reports has he received into the integration of SmartGate between New Zealand and Australia? 
Hon MAURICE WILLIAMSON (Minister of Customs) 
: 
 Just another wonderful milestone in the ongoing saga of the roll-out of SmartGate. 
Hon Simon Power 
: More good news. 
Hon MAURICE WILLIAMSON 
: More good news indeed. Last month in cooperation with the Australian Government we began trialling the use of SmartGate between one city pair—that is between Auckland and the Gold Coast airport at Coolangatta. For the first time eligible passengers will be able to bypass SmartGate kiosks at the Gold Coast and go straight to the gate if they use SmartGate in New Zealand and vice versa. It will cut out one whole piece of the process. The trial will run for while and then it is our intention to implement it right across all of the gates. 
Nikki Kaye 
: What are the benefits of the SmartGate trial? 
Hon MAURICE WILLIAMSON 
: They come under the “better cheaper faster” heading that Tony Ryall is always—[ 
Interruption 
]—“better sooner more convenient” heading that Tony Ryall wants. So far 1.5 million people have used SmartGate. After Budget 2011 gave us six additional gates—and they are being rolled out over the Rugby World Cup period—we will have 22 gates operational in New Zealand which is spectacular. The passenger response we are getting from emails is that it could not get any better. The processing time— 
Hon Simon Power 
: What does the  
Mapp Report 
 say? 
Hon MAURICE WILLIAMSON 
: The  
Mapp Report  
is very complimentary as well. It always is.  
Student Loan Scheme Bill 
In Committee 
Debate resumed. 
Part 1 Preliminary matters loan advances and New Zealand-based and overseas-based borrowers ( 
continued 
)  
A party vote was called for on the question  
That Part 1 be agreed to. 
Ayes 67 
New Zealand National 57; ACT New Zealand 5; Maori Party 4; United Future 1. 
Noes 53 
New Zealand Labour 42; Green Party 9; Progressive 1; Independent: Carter C. 
Part 1 agreed to. 
Part 2 Repayment obligations of borrowers 
The CHAIRPERSON (H V Ross Robertson) 
: I wish to advise members that this is a debate on clauses 25 to 109 and it also includes debate on schedules 2 through to 4. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I will raise some questions about exactly those clauses that you have helpfully outlined for the Committee which we are looking at now. 
Hon Ruth Dyson 
: Is that Part 2? 
GRANT ROBERTSON 
: It is Part 2 I say to Ms Dyson; yes it is. I have a question for the Minister in the chair the Minister of Revenue and I hope he will answer this one because it is a genuine question. In the first reading and during the select committee process on the Student Loan Scheme Bill a number of concerns were raised about the change in assessment for people who earn money while they are on the student loan scheme in terms of what they have to pay back. I was not on the Finance and Expenditure Committee but my reading is that a number of those concerns have been dealt with in the changes that have been made to Part 2. 
In particular when we look at clause 48 we see that there is now a change to the definitions relating to the exemptions for full-time students. As I read the change in clause 48 essentially it is trying to say that if a student works intensively in a holiday period and at that point earns more than the repayment threshold which currently would be $367 per week then returns to being a student they will be assessed on their whole year’s income rather than the period in which they earned that money. 
That change would resolve a significant concern raised by a number of people in the process of this bill coming to the House which was that there would effectively be a penalty on people who were trying to earn some money during their holiday period rather than having to work extensively through term time. Of course as many members of the Committee will know people’s studies are potentially put at risk if they have to work too many part-time hours. As I think I noted in an earlier intervention the commentary on the bill also talks about the fact that it may lead to people unnecessarily borrowing money. That is a different way of looking at the same concern so I am just seeking the Minister’s guidance on that point. 
Related to that issue I ask whether the changes that have been made in clause 76 and which go on from there address the concerns that were raised about whether moving from a full-year assessment to a pay-period assessment will penalise people who earn small amounts of money but then perhaps in blocks earn larger amounts of money. I ask whether they will then end up having to pay money back when in fact their total income will not reach the $19000 figure. That is the specific question that I have. 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I was not expecting there to be such a short call on this part. Can I simply respond very quickly to the points the member has made. I simply answer yes in respect of both clauses. The position with regard to the changes introduced in clause 48 is that if within that period borrowers are above the $367 threshold then the member’s interpretation is absolutely correct but with the proviso that of course they do not breach the $19084 threshold. The provisions that follow from clause 76 merely give effect to that. So the short answer to his question on both counts is yes. 
Part 2 agreed to. 
Part 3 Excess repayments 
MOANA MACKEY (Labour) 
: 
 I will take just a very brief call on Part 3 and hopefully the Minister in the chair the Minister of Revenue will be able to respond. This part is about the issue of excess repayments which we touched on in Part 1. I am pleased to see that there will be some clarity around this point. As someone who overpaid her student loan I am pleased to see that there is an obligation— 
Paul Quinn 
: A donation. 
MOANA MACKEY 
: —trust me I say to Mr Quinn it was not a donation—in Part 3 on the Inland Revenue Department to contact student loan holders and inform them that they have met their obligations under the student loan scheme. In my particular case I felt that perhaps I had reached the point where I might have paid back my loan. I rang the Inland Revenue Department to find out the status of my loan only to be told that I had overpaid it by about $1000. 
I have a question for the Minister. In the past particularly when I have done my income tax returns if I have owed the Inland Revenue Department money the department has wanted it on very short notice. In fact it has been quite tight time frames within which I needed to meet my obligations to the Inland Revenue Department to make sure that I paid any tax that was underpaid. It took 4 or 5 months to get back from the Inland Revenue Department the money that I had overpaid on my student loan. In fact the department got quite snippy with me when I asked whether the money could possibly be paid back earlier. We heard from my colleague Iain Lees-Galloway earlier in the debate who also said that recently just this year he paid back his student loan. He found out that he had overpaid it by about $500. When he asked when he could have his money back he was told: “Well not at least until October.” 
I understand the Inland Revenue Department is a very busy department but it seems to me that for its own credibility when it comes down very firm and very hard on people who owe the department money that perhaps when the opposite case is true—in my case the department had not even informed me that I had met my obligations that I had overpaid my student loan and that I could stop paying—it would seem nice if it was reciprocal and the Inland Revenue Department was as speedy in returning money to people who have overpaid as it is with people who have underpaid. I think the Minister now has an answer so I am happy to sit down. 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I do not want to deter the Committee unduly but I am comfortable answering very quick questions if we are to proceed in this manner. In response to the member’s question the short answer is that from the time that the excess payment has been identified the Inland Revenue Department has a 6-month period within which to negotiate with the borrower about whether the money is to be offset or repaid. 
As to the point that is behind the question which is whether that means that the Inland Revenue Department’s determination to seek payment is matched by an equal determination to make payment I can simply advise the member that it is a “best endeavours” situation from the point that a settlement is reached. 
Part 3 agreed to. 
Part 4 agreed to.  
Part 5 Matters of general application and miscellaneous matters 
The CHAIRPERSON (H V Ross Robertson) 
: I wish to advise members that debate is on clauses 181 to 218 and also includes debate on schedules 5 to 9. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 Part 5 begins with clause 181 as you have so accurately stated for the Committee Mr Chair. It is a clause rewritten by the select committee but essentially it introduces the new $40 administration fee. 
Earlier in the debate some members across the Chamber asked what difference $40 makes. It does make a difference because it is a new fee being included in the student loan scheme. It means it has to be paid back. This is a new fee. It is something the Government is introducing and there needs to be a reason for introducing it. What we seem to see when we look at the regulatory impact statement and when we look at the bill and the justification for it is that there is not a justification for a new administration fee for the scheme. 
We are told that the good changes that we have all approved in Part 1 to provide for electronic arrangements for communication more transparency about loan balances and a better ability to communicate loan balances will save money. More loan repayments will be made as a result of the changes in this bill and that is a good thing. We have also learnt that a new computer system is on the way and that it will enable better easier and faster processing of matters related to student loans. 
If we put those two things together why does a new administration fee need to be introduced? I do not think the reasoning stacks up which is why it is easy for us on this side of the Chamber to become suspicious that this is effectively the beginning of interest by stealth on student loans. We know that National does not believe that student loans should be interest-free. Those of us who campaigned at the 2005 election will all remember the attitude of the National Party at that time to interest-free student loans. 
In this House John Key who was not then the leader of the National Party but I think possibly the finance spokesperson at the time said that he would oppose interest-free student loans with every bone in his body. The bones have shattered have they not? The bones were weak. Calcium deficiency in those bones— 
Hon Trevor Mallard 
: Nothing wrong with having shattered bones. 
GRANT ROBERTSON 
: That is true I say to Mr Mallard. It is how one recovers from it I say to Mr Mallard; that is what it is. Unfortunately in the case of National members they have simply decided for political reasons to stick with the interest-free student loan scheme. 
Since National came into office in 2008 we have seen that its members bridle against that. Steven Joyce and John Key have both bridled against it saying that the policy of interest-free student loans does not make any sense. Steven Joyce has had officials desperately looking for ways they can—to quote him—“dampen demand for tertiary education”. What a ridiculous notion that is. It is being done through changes around the fringes of the student loan scheme. 
As has been mentioned earlier in this debate for instance the most recent of those changes is not allowing people over 55 years of age to borrow the living component of the student loan. I have had two people in my electorate office in recent times with concerns about the fact that they will not be able to retrain having gone out of the workforce in their 50s because they will not have access to that support. 
Those are the changes that have been made by this National Government around the student loan scheme but it cannot get to the interest-free part which is the bit it really wants to get to. So in clause 181 we have the replacement for that—the $40 fee. 
There is one good thing. It should be noted that under clause 181(2) if one is already paying the establishment fee—that is in the first year one sets up one’s loan—one will not have to pay the $40 fee. Well that is great. In the first year one gets away with just $60 but from the second year wherever one is it is effectively $100. It is effectively $100 when one adds the $60 and the $40. So borrowers are now being charged $100 for the management of their loan accounts. 
This is a new fee. I do not believe the Government has justified it sufficiently. I think that the evidence that came before the Finance and Expenditure Committee in fact shows that it is not necessary to introduce this new $40 fee under clause 181. 
I believe that it is a revenue grab. It does not make sense alongside the increased repayments that are expected to come in from this bill and it does not make sense alongside the savings that are meant to come in terms of efficiencies in other parts of the bill. 
DAVID SHEARER (Labour—Mt Albert) 
: 
 I will follow on from Grant Robertson and suggest why this extra money is being levied on students. As I was reading through the Student Loan Scheme Bill I realised that the implementation obviously depends on a very effective computer system—a computer system that is able to do all the things that we have been mentioning in the Chamber up until now. Well there have been some problems with the computer system and I would like the Minister in the chair the Minister of Revenue to comment on this. 
From my understanding $35 million was allocated by Cabinet to upgrade the computer system. We have spent as I understand it $21 million out of that $35 million on an Oracle-based system and that system now seems to not be working or not be adequate. I quote from an industry magazine  
Computerworld 
: the “deputy commissioner of business transformation says it became apparent during the design phase that extracting the loan history and migrating data from the old system to the new system was more complex and time-consuming than expected. … we have spent $21 million out of $35 million allocated by Cabinet”. 
Basically we have gone to the “Rolls-Royce” gold-plated computer system and it simply has not worked. I put a written question to Peter Dunne asking whether that was in fact the case. Mr Dunne replied that the department has gone back to the future inland revenue systems and technology (FIRST computer system) which is the old system of computing. He said: “Inland Revenue is delivering changes to Student Loans through FIRST rather than an Oracle-based system.” We spent $21 million on the Oracle system. That now seems not to have been money well spent; it has not delivered the outcomes that we wanted. We have gone back to the old FIRST computer system. I quote again from the  
Computerworld  
magazine: “Although this approach”—the Oracle-based system—“has been abandoned ‘the long-term plan is still to move eventually away from FIRST which is now more than 20 years old … Work done on FIRST in recent years along with planned modifications means we are confident it will perform …’ ” but will be eventually replaced. 
We have now spent on Oracle $21 million out of $35 million that has been allocated by Cabinet to upgrade the computer system so it can do all the things we have been talking about in this bill. We have spent that $21 million. We have now found that the Oracle system will not work so we have gone back to an older system the FIRST computer system. But we know that the FIRST computer system will be inadequate into the future and we will have to upgrade it. My question really is about what is going on here. It seems to me that $21 million of taxpayers’ money has been squandered on a new computer system yet again. We have had all sorts of problems with computer systems and $21 million—as I think you will appreciate Mr Chair—is a lot of money to waste or certainly to have not fulfilled the computing needs of the student loan system in relation to moving it into the 21st century. 
I would like the Minister to take a call on this and explain what exactly has happened to the $21 million what has happened to the Oracle system why we are back again on the FIRST computer system which we consider an old system and what the plan is for the future so that we can have some confidence that all the changes that we are supporting in this bill might in fact be allowed to go ahead. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I propose to take just a shortish call on the Student Loan Scheme Bill and follow on from some of the comments and questions raised by my colleague Grant Robertson in respect of clause 181 and the issue of the new administration fee—the annual administration fee—of $40 which as we have noted comes on top of the $60 establishment fee. So obviously there is a $100 cost to students or former students for their loans in an environment where the Government was absolutely determined it seemed to not be seen to be putting interest charges on student loans. 
The question I wanted to ask the Minister in the chair the Minister of Revenue is this. Clause 181(1) says that “If a borrower has a loan balance of $20 or more on the close of 31 March in a tax year—(a) an annual administration fee of $40 (or any other amount prescribed by regulations) must be charged by the Commissioner …”. I am seeking from the Minister some assurance. It has been known for fees like this to come in at that kind of level and then increase. Obviously we have the situation as mentioned where students have effectively a $100 cost for their student loans as a result of the establishment fee and now the annual administration fee. And of course we are well aware of changes in the Budget for students over 55 years that preclude them from student loans. So a cumulative cost is what I am concerned about and I would like the Minister’s assurance that that fee—as opposed as we are to it at $40—will not be increased by executive fiat. 
Hon PETER DUNNE (Minister of Revenue) 
: 
 There are two streams of argument that I will respond to. The first relates to the $40 fee. I need to correct Mr Burns immediately. We are not talking about a cumulative fee of $100. There is a one-off $60 charge for the establishment of a loan and an annual charge thereafter of $40 for the ongoing administration of the loan. The borrower will pay $60 in year 1—that is $60—and $40 in subsequent years. A borrower cannot get a cumulative cost of $100 in 1 year which is what the member claimed and there is no way one can twist the argument to present that. 
Let me come to the point that Mr Burns raised about the wording of clause 181(1)(a) of the Student Loan Scheme Bill. Does this mean that there is some hidden agenda to increase that charge? The short answer to that is no. We have simply set that figure in there as a reasonable administration cost bearing a relationship to the establishment cost of $60. If we were intending to have a higher figure we would have said so frankly. 
Let me now come to the question that Mr Shearer raised because I think it is important to put on record exactly what is happening with the computer system. This will be somewhat of an ongoing theme not just in this bill but also in other tax legislation over the next little while. The future inland revenue systems and technology (FIRST computer system) was instituted in 1991. It was seen as ground-breaking at that time. It has served us remarkably well in the last 20 years. But in that 20 years we have grafted on to it in no particular order student loans KiwiSaver child support Working for Families and one or two other initiatives as well. The consequence has been that a system that was set up for a very discrete purpose is now taking on a whole range of other activities and that to get access to someone’s data in respect of any one of those activities requires a translation through all of them. So it is complicated. 
During the term of the previous Government we began a project to refine the nature of our technology if you like. We rejected then—correctly in my view—the idea of a complete systems rebuild. The Canadians and the Australians are doing that. The experiences the member lamented in respect of national computer programs are being repeated in both those countries: they both have $1 billion - plus price tags now for the work that they are doing. So we decided that we would start with the student loan project because firstly it was discrete and secondly there was an off-the-shelf product available from Oracle that could be purchased and effectively implemented whilst the broader process of what the future might hold for the FIRST computer system was conducted. The thinking at that point was that we would do the student loan project. We would then move on to other discrete projects within the system and over a period of time migrate away from the FIRST computer system to the new system. 
Because of the complexity of the FIRST computer system which I described right at the beginning what has happened in the subsequent period is that it has become clear that that initial objective was not able to be achieved as simply as we might have first imagined. I can assure the Committee that no money has been wasted. In fact the transformation with regard to student loans will occur from 2013 onwards. The problem is simply this: when this bill came to the House with an implementation date of 1 April 2012 it was on the assumption that we would be able to move from the FIRST computer system by that time. I was faced with a decision earlier this year around March or April from memory as to whether we pushed the implementation of this entire bill out to 2013 which would be contrary to the assurances we had given or to see whether we could proceed to a certain extent within the FIRST computer system and then let a certain set of other changes in the bill take effect at a later date under the newer system. That is the option we have followed in the bill. 
We will be utilising the FIRST computer system for a number of the changes as we migrate over in the next 2 to 3 years then the new system will take effect. But we wanted to honour the commitment contained in the bill and in the discussion documents that preceded it about the need to give some clarity for the administration of student loans in the interim. This is not a project to be concerned about in the sense of whether it will all happen—it will—but the time frame is simply taking a little longer than we might first have imagined. That is a good thing in a way because a lot of the issues that are being indentified through that will serve us well when we come to look at things like PAYE GST and various other aspects of the system as well. I can assure the Committee that within the scope of the FIRST computer system we will be able to deliver what is in this bill by 2012 and the bulk of it will come as the system changes from 2013 and beyond. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I do not want this debate to end prematurely. The question I have was stimulated by the Minister in the chair the Minister of Revenue. Some of the memories— 
Hon Rick Barker 
: Stimulated by the Minister? 
Hon TREVOR MALLARD 
: No it brings back memories some of which are pleasant and some of which are unpleasant. They relate to the period in 2000 when there was a look at the possibility of integrating the Work and Income computer system and the Inland Revenue Department computer systems in order to make sure that people were getting entitlements but also to make sure that they were not ending up with the sorts of bills that people were ending up with. I know that Working for Families has made some progress in that regard and there are better ways for people to avoid those bills. 
I do not think the Minister was Minister of Revenue at the time—I do not think he was in Government at the time—but there was quite a lot of discussion then about the benefits of having a system that worked together across student loans Working for Families the Liable-parent Contribution Scheme PAYE and things in that area—but not so much GST. There was discussion about getting a system that was integrated and worked well together. I think it fell down probably on the State Sector Act and in fact on Christine Rankin standing on her rights as the chief executive of the Department of Work and Income to have a separate system. I think it is fairly well on the record that a major breakdown occurred in the relationship around that discussion but it was too late because Work and Income was required to get a new system and the systems diverged. 
I just ask the Minister—the Minister is doing good work in this area and we are debating the charge not the general process—whether he is looking at going further and having a system that is effectively a Government income-relationship computer system given the good work that he is doing with education and whether it can be spread to the area of a more major challenge. 
Hon Peter Dunne 
: In short yes. 
Hon TREVOR MALLARD 
: Good. 
A party vote was called for on the question  
That Part 5 be agreed to. 
Ayes 67 
New Zealand National 57; ACT New Zealand 5; Maori Party 4; United Future 1. 
Noes 53 
New Zealand Labour 42; Green Party 9; Progressive 1; Independent: Carter C. 
Part 5 agreed to. 
Schedule 1 agreed to.  
Schedule 2 agreed to.  
Schedule 3 agreed to.  
Schedule 4 agreed to.  
Schedule 5 agreed to.  
Schedule 6 agreed to.  
Schedule 6A agreed to.  
Schedule 7 agreed to.  
Schedule 8 agreed to.  
Schedule 9 agreed to.  
Clause 1 agreed to.  
Clause 2 agreed to.  
Bill reported without amendment. 
Report adopted. 
Third Reading 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Student Loan Scheme Bill be now read a third time 
. The measures contained in this bill are designed to make it easier for borrowers to manage their loans and to pay back what they owe which in turn will help the Government to better manage this substantial Crown asset. 
The first of these measures sets the framework for consolidated loan information to be provided electronically to borrowers by the Inland Revenue Department. Borrowers will be able to access information on their loan balance and manage their repayment responsibilities wherever they are and at any time. This includes borrowers who are currently studying so they will no longer have to contact two agencies for this information. In addition the majority of borrowers with income from salary and wages only will benefit from reduced compliance costs as a result of the removal of the current annual end-of-year assessment. However borrowers who have significantly overpaid their pay-period obligation will be able to apply for a refund. The result of these changes will be a simpler more effective way for borrowers to self-manage their loan responsibilities and a more efficient cost-effective framework for the Inland Revenue Department to manage its interactions with all borrowers in New Zealand and overseas. 
At the same time the bill recognises the importance of borrowers honouring their repayment obligations. To further encourage borrowers to take a responsible approach to their loan the bill simplifies the current penalty rules that apply when borrowers fail to make loan repayments when they should and strengthens the ability of the Commissioner of Inland Revenue to recall a loan in cases of serious non-compliance. 
These are the main features of the bill. I would like at this point to acknowledge those whose efforts have contributed towards the successful passage of this legislation so far. I thank my officials and the drafters who have worked on the detail of the bill and those who made submissions on the bill to help improve the practical application of the measures it contains. I thank the Finance and Expenditure Committee too for its consideration of the proposed reforms and its recommendations to give greater clarity to the legislation. 
As it now stands this bill will make it easier for borrowers to take responsibility for repaying their loans and will make it easier for the Inland Revenue Department to administer this important investment for the future. Consequently I have a huge amount of pleasure in once more commending this bill to the House. 
DAVID SHEARER (Labour—Mt Albert) 
: 
 As has been said before the Labour Party supports the Student Loan Scheme Bill. As we have said in both the second reading and the Committee stage this bill will assist in the collection of student loans. It streamlines the student loan system. It will mean that students are able to go online see their loan status pay online and keep in communication with the Inland Revenue Department much more effectively. 
Certainly the bill will improve the situation at the moment in relation to about $2 billion worth of loans held by students who have gone overseas. Although many of those people may not want to pay off their student loans many of them possibly would like to but have difficulty accessing the system. I suggest that the sum that this upgrade purports to save by 2014 could be significantly more than $22 million just from the fact that people will pay their loans back on time simply because it is easier to do. People who are working in Australia the UK or somewhere like that will be able to pay online. If they want to come back to New Zealand they may decide to pay off a bit more of their student loan because when they do come back to New Zealand they will have to do that. 
I remind members about the size of student loans in New Zealand. The nominal value of loan balances now is around $11 billion. About 587000 people have a student loan with the Inland Revenue Department for collection. The average amount borrowed is just under $7000 although as my colleagues have said we have heard of loans in excess of $15000 and $20000. Students who remain in New Zealand pay off their loans in about 4½ years once they are earning a salary and have reached the threshold of around $19000 which actually is not very much. Nevertheless they start automatically paying back that money at that time. 
For the Labour Party the issues around the implementation of this bill are certainly not its modernising the system and moving forward which are well accepted. A couple of issues though that have come up in the course of the debates particularly in the Committee stage are worthy of mention at this point. The first is the additional charges: the $60 one-off charge and then the $40-a-year administration charge. Given the fact that this system will save us money save New Zealand money I would argue that these charges are another imposition on students. Students are stretched at the moment. Coming through the House at the moment is the Education Amendment Bill (No 4) which limits levies but we know that levies in universities in particular will go up. We know that if the voluntary student membership bill goes through it will gut the students associations. Instead of a voluntary contribution to the students associations there will be a mandatory levy. It will be levied by the university because that is what has happened in every single case in both Australia and here. The students associations provide a plethora of different services that are valuable but they will not be able to do that. 
The other thing I want to point out with regard to student loans is that they apply to every New Zealander who wants to take out a student loan bar those aged 55 and over. So from here on in this legislation has absolutely no relevance to people aged 55 and over because they are not eligible for a student loan. I would like to say that the instrument that was brought in by the Budget this year is discriminatory against those aged 55 and over. They will not be able to access the same assistance and support when they go through university as everybody aged under 55. That is discriminatory. If we are talking about an education system that is meant to be serving everybody and if we are talking about an education system that will both upskill and provide people with in-job training so that they can take on and adapt to the changes that will happen in our workforce then that provision is a major step backwards. Although I believe that this legislation will certainly help those people with loans or people who will get loans in the future that luxury that right has been taken away from some members of our society who choose to go into tertiary education. They will not be assisted to do that. 
I would argue that 55 is a pretty young age in today’s world and in today’s workforce. We are looking at the retirement age being extended further and further out if we follow the trends of all other countries in the world. If that was to happen—and we know that people would like to work longer and longer as health improves—then those people who would like to retrain will simply not be able to do that if they require additional support and assistance. I come back to the point of this legislation which is smoothing the way upgrading our ability to get back student loans and assisting those who have student loans to repay their loans. That is a good thing. It certainly is not going to be the case for many. 
Lastly I want to touch on the point that the Minister of Revenue raised in the Committee stage regarding the computer system. There is a great deal of consternation out there that around $21 million out of the $35 million that was appropriated for upgrading the computer system has been spent on the Oracle system. I accept the Minister’s argument that it is a very complicated procedure to move so much information into one computer system but I should say that we have had follies of computer systems in the past. We have had a number of occasions to I guess warn us to keep a very very close eye on the spend for this particular project. We are now going back to the first system—the Oracle system as the Minister said will kick in a bit later—so that this legislation can take effect earlier which is in principle a good thing. I come back to the fact that computer systems and upgrading computers have been hugely traumatic and problematic in the past and I hope that does not happen with this computer system. Labour will be keeping a very close eye on it. 
In conclusion once again I would like to give the Labour Party’s support to this legislation. It improves the administration and hopefully the repayment of student loans. 
AMY ADAMS (National—Selwyn) 
: 
 I will take a call on the third reading of the Student Loan Scheme Bill but I do not want to traverse the ground covered in my contribution in the second reading debate when I went through in a nutshell the salient parts of the bill as I saw them. I will briefly touch on some of the blatant inaccuracies and misrepresentations from members opposite in this respect because I think they need to be addressed. The first of those is to do with the fees. Both Labour and the Green Party have expressed their concerns about those. They have expressed outrage and indignation about this one-off $60 establishment fee which is charged when the student loan is first taken out— 
Grant Robertson 
: It was 50. 
AMY ADAMS 
: —it was $50; that is right so it has gone up a whole $10 as a one-off fee—and about the $40 Inland Revenue Department administration fee. 
It is worth pointing out that the changes that this Government has made to the student loan system are about making the system sustainable into the future because the total debt is not in fact $11 billion as the last speaker David Shearer said. The student loan debt book currently sits at over $12 billion and within 3 years that will be well in excess of $14 billion. This is a huge item on the Government balance sheet and we have to ensure that it is sustainable as we go forward so the changes we have made have been very much about ensuring that. 
One part of that sustainability is being up front about the fact that there is a cost to run this system and that cost is around $17 million per year for the work done by the Ministry of Social Development which administers the StudyLink part which is covered by the $60 fee. So even previously there was a $50 set-up fee to cover those Ministry of Social Development costs of $17 million per annum. But the Inland Revenue Department has annual administration charges around the system of over $22 million a year so I think that having an administration fee of $40 per annum go towards that $22 million administration cost is absolutely justifiable and very sensible and as I say it goes to the sustainability of the student loan policy as we go forward. 
The other issue I want to touch on—and I touch on it only because Labour members have continually gone back to it albeit it is not in this bill—is the issue of borrowers aged over 55. A couple of points need to be made in order to set the record straight. Firstly those over 55 can still get student loans despite Mr Shearer’s repeated completely incorrect statements on that. They can get student loans for their tuition costs. 
Grant Robertson 
: They can’t get them for living costs. 
AMY ADAMS 
: Mr Shearer’s argument was that they could not access student loans whatsoever which is wrong. They can get student loans for their tuition costs. Do members know what is really interesting? Just a few days ago the media was reporting that the worst group for repaying student loans were the over-55-year-olds. The single worst group at making any repayments on their student loans were the over-55-year-olds. 
Let us be very clear that this bill does not in any way address the eligibility of over-55-year-olds. What it does is make the system sustainable as we go forward provide a contribution towards the administration costs of running the system and make the system easier for taxpayers to comply with and easier for student loan borrowers to comply with and that is to be commended. 
I encourage anyone listening to this debate to ignore the incorrect rhetoric coming from members opposite and focus on the fact that this bill is set up to make it easier for borrowers to comply and to make the scheme sustainable in terms of its administration costs. [ 
Interruption 
] Labour members can bleat and moan to their heart’s content but that is not what this bill is about and their contentions are simply wrong. With those few words I commend the bill to the House. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I will just pick up on some of the comments of the member opposite who has just resumed her seat Amy Adams about the over-55-year-olds and their capacity to learn and continue learning. It is essential if we want to encourage people to continue to learn have flexibility and pick up new careers that they should have access to training skills and higher education. Obviously we need only look at the number of career changes that people have in life—at 55 people may well be working for another 20 years with plenty of time to repay loans. I would like to see the evidence that those people aged over 55 were paying the least amount of their student loans because that would be absolutely out of line with everything that I know about that sector of the population who are generally regarded as being the most responsible people in terms of their debts and obligations to society. I would like to see evidence presented and we have not seen it. 
That matter is not at the heart of the Student Loan Scheme Bill. At its heart this bill is about encouraging the repayment of student loans. I support the notion that we must have a facility like the student loan scheme to allow people on to the staircase of higher learning and the reason for that is not just the higher incomes that it brings to them but also the higher productivity and prosperity it brings for us as a nation. I think we might be beginning to work out as a nation that we cannot simply make our way in this world with our hands; we need the skills from our heads and we need the highest possible educational outcomes and achievements from all in our society and that is why the student loan scheme has been an important mechanism. We acknowledge the costs that it represents and that is why Labour is supporting this bill. But we should not forget the principle involved which is that we want everybody in society to be able to go into tertiary education to upskill themselves so that they can contribute not just for themselves and their families but also for us as a nation and that is why we have a student loan scheme. 
On the costing of student loans we have had figures presented to us by the Inland Revenue Department and Treasury stating that it sits currently at about $11 billion - plus and is projected to go to $14 billion or $15 billion. Those are big costs. When we consider that the current education spend per annum is in the same order of around $11 billion - plus obviously the scale of the student loan debt is high. This bill is beginning to address some of those issues but I would also note some of the amounts involved. It was interesting I thought to see that the gain suggested in the order of $22 million over a total cost of $11 billion of the student loan portfolio is only about 0.5 percent and does not seem to be in quite the scale of things that might have been projected. 
This bill also recognises that we need technology to connect to students many of whom go overseas. I was very pleased to see that in his final speech to us as parliamentarians our outgoing Governor-General Sir Anand Satyanand used his iPad to read his speech to us today. I think that that is an acknowledgment. Sir Anand is probably somebody let us guess who may be in his 60s now. I do not want to be unkind or uncharitable but there is somebody who might well go on to yet another career despite the distinguished career he has already had. There he was using the technology of the 21st century and that is at the heart of this bill. We will see the Inland Revenue Department implement a system whereby we can go online check our balance make our payments and contribute back to the nation for the education that we have had in some part. That is why Labour is in support of this bill. 
I just note that the regulatory impact statement states that although most borrowers will benefit from the changes some will be disadvantaged. That is why Labour has picked up on the situation of some of those people during the course of this debate. It is the role of the Opposition to point out some of the holes and inadequacies in legislation. Yes a $40 administration fee per annum may not seem a lot but it does add up cumulatively over the time of a loan. We are talking about a normal loan period in the order of 5 years and obviously at first students are not very able to pay. Once they come into a job they are better off but it is still a fee that will cause some of them some disquiet. 
I was particularly pleased to see in the bill the move on the late-payment penalties because it really was a usurious rate when debtors were effectively being charged credit card interest rates at 19.5 percent per annum. If we want to encourage people we have to make it clear to them that they will be treated fairly and that was not fair. I think that basically it said to some people that they did not need to bother because it was too hard and the interest rates were too high. The interest rate has been pulled back to about 10.5 percent or about 8.6 percent if debtors go into instalment arrangements. That provides the correct sort of incentive and signal to former students that they need to take on their responsibilities and that the State will assist them with that not treat them as a credit card company might. 
As we have discussed we have $11 billion of debt in respect of the loan balances of the student loan scheme and nearly 600000 people owe money. We want to encourage more people to come into tertiary education not discourage them. The average amount of borrowing is only in the order of $7000. Obviously we have put all of the half a million - plus former students into a total which is why we are seeing the numbers involved and why the projections go to $15 billion by 2015. 
That is why Labour is supporting this bill’s passage through Parliament. We have some disquiet about some aspects of it. We have raised those concerns in the appropriate setting. We are particularly discouraged by the allied move in Budget 2011 to exclude over-55-year-olds from the potential to benefit from the changes made to this bill. We do not regard that as appropriate. That is a very very discriminatory signal to those in the 55-plus community who from the beginning of the year after next will not be eligible for the student loan scheme. That is a very negative signal. 
Aaron Gilmore 
: That’s not true. 
BRENDON BURNS 
: That is very clearly what will happen. The Minister’s announcements accompanying the Budget on 19 May were that from the beginning of the year after next—as of 1 January—students who are aged over 55 will not be eligible for living costs or course-related costs. 
Aaron Gilmore 
: Ah! 
BRENDON BURNS 
: The member opposite can tell me what other component of costs students face. That is exactly the point and it is at the heart of what we are saying. Those people are being disadvantaged and discouraged from trying to get themselves into another set of learning and acquire some extra skills. Therefore they will not have the opportunities that would then be in front of them to allow them to learn another career or another discipline and to move into another job. 
At the age of 55 people still have 15 or 20 years of working life ahead of them if they so wish. That is why Labour says that making students over 55 not eligible for the scheme is not an appropriate part of the Government’s moves on student loans. Those people should be eligible for loans and should be able to benefit from the changes made in this bill in terms of the greater flexibility that is provided for repaying loans—to be able to go online and repay them—and in the lowering of interest rates. Those are all positive changes which are welcomed and a tidy-up of the student loan debt profile will result even if it will be modest. 
We have considered the bill in great detail through the Finance and Expenditure Committee. In closing I acknowledge the work of the select committee under the previous chair Craig Foss and the incoming new chair Amy Adams. We have worked comprehensively as a select committee on this bill. I thank those officials from the Inland Revenue Department and other departments who have assisted us. It is a complex issue. I also acknowledge the work of my colleague Stuart Nash who is not able to speak on this bill today but who has put enormous work into this bill on behalf of the Labour Opposition. Thank you. 
KEVIN HAGUE (Green) 
: 
 My colleague Gareth Hughes would have liked to speak in the third reading of the Student Loan Scheme Bill but he is unable to. He has left me some notes in the form of writing on paper. 
Kia ora. It is good to be addressing student loan issues. However this bill although dealing with a few specific points ignores the elephant in the room which is the massive and growing student loan debt. The Green Party supports the general intent of this bill. However we will be voting against it because it increases the already huge student debt burden facing Kiwis. This bill increases and introduces additional student loan fees which will just add to the national student loan debt burden extend the time it takes to repay a loan and because it reduces the effectiveness of the voluntary repayment bonus take things further back. 
The national student debt is now in excess of $11 billion as we have heard and the loan burden facing hundreds of thousands of Kiwi students and graduates is having a negative effect on families society and the wider economy. The student loan scheme was established in 1992 and has been a failure. The current total debt as of 30 June 2010 is a staggering $11145000000 and is growing at $1 billion a year. 
For the more than 560000 New Zealanders who have a student loan this debate is not academic. The average individual debt is around $28800 which is close to the median New Zealand annual income and takes years to pay back. Meanwhile families are delayed homes are not invested in and graduates are struggling with the debt. 
We voted to support this bill’s referral to the Finance and Expenditure Committee for investigation because we acknowledge that there are common-sense parts to the bill that we support. However we have flagged our concerns regarding the new fees. We would like to repeat our thanks to submitters officials and members of the committee. 
There are some good aspects of the bill. This bill aims to make the student loan scheme simpler which will benefit students as well as graduates. It cuts down on the administration of loans. At the moment there are two bodies that share information—the Inland Revenue Department and StudyLink—and students and graduates have to go backwards and forwards between the two. So that change is an advantage of the bill. 
We also support greater electronic management of student loans. We think this is beneficial in terms of reducing administration costs for the Inland Revenue Department. But most important it will give students greater information and transparency around their loans and hopefully will encourage them to pay them back faster if they possibly can. 
It is incredible that it is not until this year 2011 that the New Zealand Government is transitioning to electronic management of loans. This change in particular makes it easier for overseas borrowers to access information and there are hundreds if not thousands of student loan refugees overseas—which creates an amazing skills deficit for our country—each with their own tale of how the student loan burden got out of hand for them. 
Those are the positives. On the other side of the ledger however is this: if greater electronic management and increased efficiencies are achieved as the Government intends then the Green Party cannot fathom why the Government would need to bring in new and increased administration fees. Surely if costs are reduced the Government should be reducing fees not increasing them. The increase to $60 for students drawing down a new loan and a new $40 charge for borrowers will add to the student debt burden likely increase repayment times and reduce the effectiveness of the voluntary repayment bonus. 
The Inland Revenue Department’s regulatory impact statement states that the proposed changes are occurring at the same time as the student loan computer redesign. Therefore there are no additional administrative costs. Why then charge new fees? Why then increase the fees if in fact costs are reducing? 
Many students and graduates who are struggling with debt high living costs and increasing fees are sceptical of these new charges. We heard in the select committee from student representatives that many students and graduates who are facing these additional fees will be cynical of this new tax as they see it. 
Although we acknowledge that this Government has not reintroduced interest on student loans in this term of Government—although National has not ruled it out should it be successful in achieving a second term—these new administrative fees are essentially interest by stealth. Interest-free student loans are hugely popular because they reduce the debt burden make repayment easier and faster and lastly are a fairer way of going about the business of tertiary education. Gareth Hughes has no doubt that National would reintroduce interest by lunchtime if it could but overwhelming public opposition means that it needs to look for stealthy solutions. 
These new fees will reduce the effectiveness of the voluntary repayment bonus. Those who make a voluntary repayment of $500 will receive a 10 percent repayment bonus of $50 but unfortunately this will just be eaten up by the administration fee. New fees—whether we call them a tax or interest by stealth—simply increase student loan debt perpetuating the unfair experiment that is crippling a generation with debt. 
The second part of the bill that the Green Party objects to is the pay-period change. We believe that the current annual assessment is fairer especially for those students who earn the bulk of their year’s income over the summer break and will be disadvantaged financially under this bill. Those who are say picking fruit or working in a freezing works or local cafe full time over summer will likely see 10 percent of their weekly income automatically deducted to repay their loan. Yet over the course of the year if they focus on studying during the academic year they will be disadvantaged. We are aware that there will be exemptions for this large body of students. However we expect not many will go through the rigmarole of applying for exemptions. 
Lastly this bill continues the F grade the Government is earning in this portfolio. From capped spending to discriminating against over-55-year-olds to capped enrolments to rising fees this Government is making it less accessible less affordable and in some cases downright impossible to be a student in New Zealand. Tertiary education is a smart investment. Australia—remember we are trying to catch up—is spending $5.3 billion extra over 6 years and setting ambitious targets setting a good model for New Zealand to follow. 
In conclusion we went into the Finance and Expenditure Committee with an open mind on this bill and we support electronic management of loans as a positive step. However we cannot support this bill in its current form—I guess its final form—as the administrative fees and pay-period changes primarily benefit the Inland Revenue Department at students’ expense. 
The Green Party will not vote to increase the student debt burden. The student loan portfolio is currently projected to grow to $14.5 billion by 2014-15. We are saddling an entire generation with crippling debt that could impact on all areas of their lives. It will only get worse unless we act now. New Zealand needs real solutions to student debt and this bill is not one of them. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I was expecting some of the members on the other side of the House who have been interjecting freely through the process to take a call on the third reading of the Student Loan Scheme Bill but clearly only the interjections are required. 
I will speak about three or four elements of the bill in this third reading. Labour is supporting the bill. It is supporting the glass half-full rather than the glass half-empty side of the debate we heard from the speaker who has just resumed his seat Kevin Hague. Some elements in this bill are positive. Moving from a paper-based system to an electronic system is overdue for the student loan scheme and I have no doubt that the changes being made here in terms of that system will assist borrowers. They will be able to interact with the Inland Revenue Department far better. They will know much more about the balance of their loan. We hope—we are assured—that compliance costs will be reduced as a result of this legislation. And the quality of information will increase. 
Many constituency MPs will have been approached over the years by borrowers concerned about aspects of how the loan scheme operates. Certainly I myself as a borrower experienced this and I have also had people come to see me about it when overpayments occur and when information is not flowing between the Inland Revenue Department and what is now called StudyLink. People under this process will actually have much more control over their own loan accounts and I think that is a very good thing. 
There are some practical steps in the bill that tidy up one or two elements relating to overpayments interest rates and so on. Those steps I believe are good things and that is why we are prepared to support this bill. There are also some changes relating to obligations on borrowers who are overseas and I support that. 
I have had my concerns over the years with the loan scheme. I support a lot of what the Green member said about the costs imposed on people who have undertaken tertiary education but once someone has borrowed from the scheme I believe they should meet their obligations. That means that when they are overseas payments should be made in accordance with the law we are amending today. So I support the changes relating to obligations within the law. 
I believe problems still exist in this bill which is about to become law in relation to the question of the pay-period assessment versus an annual assessment for repayment. I appreciate the changes that were made in the Finance and Expenditure Committee on this matter and I think they go some way toward mitigating the concerns. I am not sure that the last Green speaker completely covered off the changes that the select committee made. The select committee took on board the concerns that were raised in first reading speeches and by submitters about the impact of a pay-period assessment on someone’s earnings versus an annual assessment if that person was a student or was to continue to be a student. This provision is needed because a lot of students try to work very very hard over breaks so that they do not have to either borrow extra money while they are studying or undertake more part-time work during a study period. The changes made by the select committee acknowledge that and ensure that a wider group of students who are also borrowers will be exempt from those repayment changes. 
However that exemption is still available only on application. The student still has to get an exemption from the Commissioner of Inland Revenue. I urge the Government to work with students associations as long as they still exist to make sure that students and borrowers are aware of the fact that they can get this exemption. Some of them may not be aware of that fact. They will work very hard in part-time jobs in breaks and may not know that they are now eligible under this law to be exempt from making repayments. I think the select committee has done a good thing in making this change with regard to students in a holiday break who under the current rules would have to make repayments if they earned more than $367 per week in that holiday break. That now will not occur but only if an exemption is obtained on application. I urge the Government to ensure that students and borrowers are aware of that change. 
Although we supported that particular aspect of the change it is still true that part-time students and people with irregular incomes will now potentially be caught by the pay-period assessment. Members on the other side of the House enjoy talking about movies such as  
The Hobbit 
. It is true that people who work in that kind of industry get large amounts of money at a particular time but perhaps will not earn over the threshold for a whole year. They will be making payments now on the basis of a pay-period assessment. That presents a difficulty. But I congratulate the select committee on having listened to those submissions. That is why bills need to go to select committees so that issues like this can be dealt with. 
I still foresee some issues relating to moving from an annual assessment to a pay-period assessment. I appreciate the fact that for some people there will actually be benefits but a number of students who will still need to apply for an exemption and other borrowers who will not be able to apply for that exemption will be caught by this change. 
The other matter I will refer to has been referred to a number of times in the debate and it is the question of the new $40 administration fee which has been introduced under this bill. We on this side of the House are not convinced that there has been a justification for this fee. We have been told by the Minister of Revenue and also in the regulatory impact statement that the cost savings from the earlier part of this scheme are such that we should in fact potentially see a reduction in any administration costs relating to this scheme. We have been told that the new computer system will save money in the long term so therefore the introduction of the $40 fee seems to have no basis other than revenue generation. 
It is in fact as other colleagues have said in the debate the reintroduction by stealth of interest on student loans. We know that the National Government would rather have interest on student loans. There is no doubt about that. I am sure that if National is elected to a future term it will look at bringing that in. Politically they know they cannot do anything about it right now but in reality that is what they want to do. Steven Joyce has pushed and pushed his officials to find ways of limiting access to the student loan scheme because he cannot do the thing he really wants to do which is to put interest back on student loans. John Key said he would oppose interest-free loans with every bone in his body. That is where the National Government really stands on student loans and that is what we see in this bill with the bringing in of this administration fee. 
It is a $40 fee. Some members on the other side of the House said we should not worry about a fee that is only $40 per year. But that money still has to be paid back. Up until this bill passes today students would not have to pay that money. Although we are supporting this bill because of the positive things it does with regard to the management of the student loan scheme which we do think in the end—we hope—will reduce costs on borrowers with this clause the costs on borrowers increase. It is very disappointing to see the $40 fee in this legislation. We do believe it is interest by stealth. 
But overall this bill does positive things. When the select committee made the change around the question of pay-period assessment versus annual assessment for repayments it certainly swayed some of my Labour colleagues in favour of supporting this bill because overall it does some good. But it still has within it problems around that and particularly the problem with the fee. 
I will finish my contribution to this debate in the last minute or so remaining by talking about tertiary education which is the core of why we have a student loan scheme. I have heard in this debate members on the Government benches talk about how we should not be investing as much money in tertiary education as we do. Well the truth is that we need to. To me nothing is more important than education in order for people to achieve their potential. 
For New Zealand to achieve its potential we need more people in tertiary education more people researching and more people coming up with the ideas that will drive a productive economy. We will do that only if we invest in tertiary education and if we see it as a public good. It is a public good. We all benefit from a more qualified educated population. We benefit in terms of the services that we get we benefit in terms of the social inclusion for people who get into education and we benefit because of the great new ideas that those people have. We must invest in tertiary education for the good of our country and we cannot afford to have Governments that take money out of tertiary education because that will limit all of our futures. I believe that investment in tertiary education is one of the most important things that a Government can do. We must continue to invest in our future. 
DAVID BENNETT (National—Hamilton East) 
: 
 An interesting final point was made by the previous speaker Grant Robertson. He said that we cannot have Governments that take money out of tertiary education yet that is exactly what the previous Labour Government did—take money out of tertiary education. It shifted money from tertiary education into the student loan scheme and those tertiary institutions have been paying the price since because of those Labour policies. Labour members start waking up now but it is too little too late because Labour does not have a desire for tertiary education or students in tertiary education. 
The Student Loan Scheme Bill is good for students because it takes advantage of students being able to manage their accounts online and that is very important for students who are aware of and use those new technologies all the time. This bill gives them the opportunity to do so. 
It is an important bill as well in the sense that it is part of that reform of the student loan package a package which meant that there was a limit on the number of students in our institutions a change which was brought in by the previous Government. That has directly affected the ability of New Zealanders to get into tertiary education. 
Grant Robertson 
: Did National remove that cap? 
DAVID BENNETT 
: A cap was brought in by Labour. Members on that side of the House know very well that Labour brought in that cap and reduced the number of students who could potentially go into tertiary education through its student loan programme. So I think when we talk about this bill that it is also important that we put into perspective some of the comments made by the Opposition that are completely wrong and do not reflect the reality of the situation. 
This is good for students. It is a good bill. It is good for the tertiary sector. It is part of a range of initiatives that the Minister for Tertiary Education has made that have been very effective in building a stronger tertiary sector. We look forward to this bill progressing through the House. Thank you. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I think the mask is beginning to slip on the National side of the House. We are finally starting to see what National’s true long-term agenda for tertiary education will be. David Bennett said that National does not regard money spent on the student loan scheme as money spent on tertiary education. That is a load of rubbish. The amount of money spent on the student loan scheme through interest-free student loans has made a massive difference to over 600000 New Zealanders who have a student loan balance and that is not including those who have already paid them off. We on this side of the House believe that spending money to improve the student loan scheme to lower the cost of borrowing to our students and our graduates is money well spent because it is money that encourages people to take up the opportunities of tertiary education to upskill themselves and to get better jobs. We think it is money well spent and we think it is a great investment in the future of our country. 
I want to talk a little bit about the loan scheme itself. Of course it is worth remembering when we are debating this quite significant overhaul of the student loan scheme legislation where the origins of the original legislation started back in 1992 when National promised to abolish fees for tertiary education but in fact increased them and introduced the student loan scheme to allow people to pay for it while simultaneously abolishing living allowances for students. Between 1992 and 2001 the number of students getting a student allowance dropped from 86 percent to 36 percent because of National’s broken election promises back in the early 1990s. 
As a result what we are talking about today with the Student Loan Scheme Bill is over 600000 New Zealanders who will be affected by these changes to the student loan scheme. The nominal value of student loan balances as it stood at the end of 2009 was $11 billion and it is forecast to increase to $15 billion by 2015. That is a significant amount of money. But I want to talk about repayment of student loans which is covered in this bill. When the last Labour Government introduced interest-free student loans National—spearheaded by John Key who said he was going to fight the policy with every bone in his body—campaigned by arguing that no graduate would repay their loan and that the time for repayment would massively increase as a result of the interest-free student loan bribe as National called it. 
I notice that the median repayment time for those who left study in 2006—which was of course when interest-free student loans were introduced—and who have remained in New Zealand is now forecast to be 4.6 years. When we introduced interest-free student loans we were looking at a median repayment time of up around 9 years. So we have seen a significant reduction in the amount of time that it has taken people to repay their loans and a big chunk of that is because of the interest-free student loans policy. That is something we should definitely welcome. It is something we on this side of the House are very proud of. 
There was a lot of debate during the Committee stage about students who work during their summer holidays and the impact that these changes in this bill will have on them. I am very pleased to hear that provision has been made for students who do their summer holiday jobs and earn a reasonably significant amount of money within a short period of time and then use that money over the course of the term to pay for their studies and their cost of living. There are provisions to exempt them from mandatory student loan repayments. I think that is a very welcome thing. I am concerned as my colleague Grant Robertson said that this will rely on them making an application and I hope that the Government will make that process very easy for students and also make sure that the information is readily available to them. Working during the summer holidays or during the term break in the middle of the year is something we want to encourage students to do because when they do that they are earning money that will result in their borrowing less. The more we can encourage students to borrow less the smaller their loan balance at the end of their study will be and the faster they will be able to pay it off once they finish their tertiary study. So I think we want to incentivise them for working during their study break not penalise them. That is really important. 
We are talking here about 58 percent of full-time students undertaking full-time work during the summer break. And 64 percent of full-time students undertake regular part-time work during the term. That figure increases to 90 percent for casual work. That provision is very very important. It would be great if we could get to the point where a student does not need to go through a large series of hoops in order to get that exemption. 
When I spoke at the Committee stage I talked about some of the problems with the way the student loan scheme is administered at the moment and how difficult it can be for a graduate or even a current student to get accurate information about their student loan balance. It is absolutely fantastic that the Inland Revenue Department will be able to do something about that as a result of the changes in this bill. That is very important because at the moment the student loan scheme is being administered by two different parties. StudyLink is administering it for the current year of study and the Inland Revenue Department is administering the historical part if you like. Those balances once they are transferred from StudyLink to the Inland Revenue Department are actually easier to keep track of but when they are with StudyLink if someone is still studying they obviously have two agencies to deal with to work out what the true extent of the student loan is. This bill will make that significantly easier for students by providing real-time information through the Inland Revenue Department where people will be able to look their information up online. 
That is good news not just for current students who will know where their loan is tracking; it will be also be good news for graduates who are overseas for a period of time but want to keep up their repayments. One of the things we want to encourage people to do is to keep up their student loan repayments while they are overseas. It is not a bad thing for graduates to want to go overseas do their OE and get some work experience in a different country. We want to make it easy for them to keep up their loan repayments while they are doing that. If they do not get into default while they are away overseas they are more likely to come back. If someone gets into default on their student repayments while they are overseas that then becomes a disincentive for them to come back to New Zealand. Making it as easy as possible for them to make their student loan repayments to check their balances and to do all those sorts of thing from overseas is really important. Electronic means are the best way to do that. It is a really welcome step for people to be able to log in and check their student loan balance and repayments just as they check their bank balance. I am really pleased this bill provides for that to happen. 
I have some concerns that some of this may be paving the way for National to implement the reintroduction of interest following the next election. National members have not yet made a concrete commitment not to do that. Before the last election they said they would not do it in their first term of Government yet they have been very silent about whether interest would be reintroduced in the second term of a National Government. I hope they will be very clear with the students and graduates of New Zealand about that prior to the coming election. We know very clearly that Steven Joyce privately—and around the corridors of Parliament—has said he would like to reintroduce interest on student loans even if it were at a nominal interest rate. He has been saying that and it would not surprise me at all if in a second term of a National Government that would be one of the things we saw coming through. I am very concerned that this bill may well be paving the way for that. 
Having said that I say that most of the provisions in the bill are pretty good. We oppose parts of it; we oppose the increase of the administrative fee for setting up a student loan. We think that is unnecessary given the Inland Revenue Department probably ending up saving money out of this but on balance Labour will vote in favour of it. 
AARON GILMORE (National) 
: 
 I am going to take only a very short call here because a lot of things have been said about the Student Loan Scheme Bill already. What this bill does is simplify the procedures for all those students out there across the country so they can access the information on their loans and we think that is a good thing. This bill also puts in place mechanisms to recover from those people who do not perform under the student loan contract. That is a good thing. It also puts in place a mechanism where those student borrowers throughout New Zealand and overseas pay some of the costs of the administration of that scheme. We think that is a fair thing. Those $40 annual administration fees will recover a fraction of the $22 million in annual administration charges paid by the Inland Revenue Department. If that turns out to be over-recovery in the future—and the Opposition seems to think that fear exists—there is the ability in regulation to lower the fee in time so it can be cheaper. Also with the $60 establishment fee that will be paid towards the $17 million that the Ministry of Social Development incurs there is an ability to reduce that fee in time should that be too expensive. All in all this is a good bill. It helps put in place a more efficient student loan system. We commend the bill to the House. Thank you. 
MICHAEL WOODHOUSE (National) 
: 
 I will take just a quick call—in fact my only call today—on the Student Loan Scheme Bill. In the debate we have referred to interest-free student loans and indeed the Government has accepted that the electorate says that interest-free student loans are important. The Government commits to them. But it strikes me that the term “interest-free student loan” is something of a misnomer because of course the loan is not interest-free. It is just a question of who pays the interest. At this stage it happens to be New Zealand taxpayers. So while they have the burden of paying the interest on behalf of students I think it behoves the Government to ensure that the scheme is administered well and that the repayment levels are optimal. 
That leads nicely on to the second issue that is being discussed today. The problem right now is not whether the loans are interest-free but whether the loans are paid back. The fact is that at the moment about 45 percent of the loans are written off. Mr Hipkins makes clever use of statistics about the speed with which those who do pay their loans off pay them off which is true but the fact is that nearly half of them do not. Many of those people are overseas. So I applaud the improvements in the bill that will ensure that graduates and other borrowers have better mechanisms by which to pay. Like Mr Robertson I received calls from people overseas who said they would like to come back but the burden of the student loan had become so great that they were reluctant to do so. 
The third and final thing I will touch on is the basis of the administration fee which as I understand it was introduced under the Labour Government. Therefore it is not a question of the principle but of degree. Certainly the costs of administering the scheme have improved dramatically but an annual collection of $8 million to $9 million in fees represents only about 0.75 percent of the total loan base. So I cannot agree with Mr Robertson when he says this is interest by stealth. 
Overall I think this is an excellent bill and I commend it. 
A party vote was called for on the question  
That the Student Loan Scheme Bill be now read a third time. 
Ayes 110 
New Zealand National 57; New Zealand Labour 42; ACT New Zealand 5; Maori Party 4; Progressive 1; United Future 1. 
Noes 10 
Green Party 9; Independent: Carter C. 
Bill read a third time. 
Taxation (Tax Administration and Remedial Matters) Bill 
In Committee 
Part 1 Amendments to Income Tax Act 2007 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I stand as somebody who was not on the Finance and Expenditure Committee so I have a number of questions for the Minister in the chair the Minister of Revenue that perhaps can assist me to get a better understanding of the particular issues that are covered in Part 1 of the Taxation (Tax Administration and Remedial Matters) Bill. As I understand it some of the main provisions in Part 1 relate to foreign investment portfolio investment entity (PIE) rules. That is such a complex area of work—and as I understand it it was actually introduced by way of Supplementary Order Paper which was then referred to the Finance and Expenditure Committee after the bill had been referred—and the select committee as I understand it took on board the need for some of the changes to be made and felt it was appropriate to call for submissions on the Supplementary Order Paper and to report the bill back to the House with the provisions of the Supplementary Order Paper included within the bill. This does seem to me to be a sensible way of approaching significant changes to legislation after it has already been introduced. It is a very good mechanism to ensure the public do still have the ability to have a say on matters of significance even though they have been introduced after the legislation has been introduced. 
I guess the question that I would like to know the answer to personally is whether this was because Supplementary Order Paper 220 was not ready for inclusion in the main bill or whether it was something that came up subsequently to the bill being referred and therefore the bill was seen as a convenient vehicle upon which to attach these rule changes. If that was the case then I am pleased that submissions were able to be called on it because I think that approach is way more preferable to bringing a Supplementary Order Paper to the House in the Committee stage. If we had had this Supplementary Order Paper referred to the House at this stage there would probably be an uproar and many expressions of outrage at things being tabled at the last minute and in the dead of night while we were under urgency. Of course it will not get that treatment today because it has been through a good process and submissions were called on it. So I would appreciate an answer. 
I cannot pretend to be an expert on the PIE rules. In fact the one thing that I normally tell people and which I am particularly grateful for is that I have never managed to find myself on the Finance and Expenditure Committee for any period of time. 
Hon Craig Foss 
: We have high standards! 
Hon LIANNE DALZIEL 
: I understand that the new Minister who formerly chaired the Finance and Expenditure Committee—and who was probably chairing the Finance and Expenditure Committee for a considerable part of this legislation if not for all of the legislation—did a very fine job as chair of that committee. No doubt that is what has seen him promoted to the high ranks that he has already managed to achieve. But I am not an expert on the PIE rules and for the sake of the record of the House I would like the Minister to go through the different elements of the adjustments that have been made the purpose of them and how they are intended to be applied with the new legislation in place. 
It does seem to me that the select committee took considerable time and effort not just to accept the Supplementary Order Paper in its entirety and insert it in the legislation but also to go through all the different elements of the Supplementary Order Paper and make some changes to it on the way through. I did note for the record that when the select committee reported back from its consideration it referred to the types of PIE that now exist. It expressed some concern about “the way the PIE legislation is structured with some over-arching rules applying to all PIES.” Therefore “Modifications for specific types of PIE explain how the rules applying to them differ from the general rules. It can be unclear whether certain provisions apply to certain PIES and some provisions conflict. We believe that the diversity of PIEs has made the legislation complicated almost inaccessible and hard to understand.” 
Well I cannot say that I am excited to read that because it worries me greatly that we may have made it inaccessible. I know that people will be making recommendations to people and it is not your average person in the street who will be looking at these matters but if we can avoid complexity we should. 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I am happy to respond to the points the member Lianne Dalziel has raised. I must say it is very rare in a debate of this type to get a detailed cross-examination on the application of the portfolio investment entity (PIE) rules but as the member has bravely walked down that path I am happy to respond in kind. I should go through just a few points here and then talk about the state of the Taxation (Tax Administration and Remedial Matters) Bill as it has emerged from the Finance and Expenditure Committee. 
The amendments the member referred to introduce two new categories within the PIE regime: the foreign investment zero-rate PIE and the foreign investment variable-rate PIE. These aim to align the tax treatment of non-resident investors in a PIE with the tax treatment of direct investors. Resident investors in a foreign investment PIE will continue to be taxed as if they were in an ordinary PIE. These new rules will be optional. PIEs can continue to apply to existing rules where non-residents are taxed at a flat 28 percent on their income. Foreign investment zero-rate PIEs will generally be able to invest only offshore. De minimis levels of New Zealand - sourced income will be allowed—for example so such a PIE can finance its day-to-day operations with a New Zealand bank account. Non-resident investors in a foreign investment zero-rate PIE will be taxed at zero percent on all their PIE income. 
Foreign investment variable-rate PIEs can invest in both New Zealand and offshore assets. Non-resident investors in a foreign investment variable-rate PIE will face a variety of different tax rates depending on the type and the source of the income. Foreign investment variable-rate PIEs will have an option to withhold non-resident withholding tax from distributions made to investors out of unimputed dividends. This will be instead of the PIE paying PIE tax in the normal manner and by withholding the non-resident withholding tax non-resident investors should be able to claim a credit for the tax paid in their jurisdiction. 
The key changes the committee has made include that for foreign investment variable-rate PIEs non-resident investors should be taxed only on interest income from financial arrangements and that matches the treatment of direct investors. Foreign investment zero-rate PIEs should be able to purchase New Zealand - sourced derivatives such as foreign exchange hedges. This is justified as these arrangements could be seen as part and parcel of the PIE’s offshore investments. In addition a non-resident would normally not be taxed on any income earned under New Zealand - sourced derivatives because derivatives do not pay interest. An investment in land investment companies should be allowed. The modifications to the exemptions in the foreign investment fund rules that were to apply if a foreign investment fund invested in a foreign investment PIE will be removed. 
A provision has been inserted to allow a retail PIE to treat income from a wholesale PIE if the retail PIE earned the income directly. This will prevent income earned from foreign investments made by a wholesale PIE in New Zealand being reclassified as New Zealand - sourced income when it was allocated to the retail PIE for example. The modifications to the source rules will be extended so that income from a foreign investment PIE would not have a New Zealand source merely because a contract was made or performed in New Zealand provided that the contract related to the PIE’s overseas investments. 
I am very pleased the member raised those questions. I hope that the very clear and simple explanation I have given in response has clarified a number of her concerns. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I also must confess like my colleague Lianne Dalziel to not being a member of the Finance and Expenditure Committee which considered the Taxation (Tax Administration and Remedial Matters) Bill and also that this matters— 
Hon Lianne Dalziel 
: But you aspire to be a member. 
IAIN LEES-GALLOWAY 
: I do. I think somewhere deep inside we all aspire. In fact Michael Woodhouse made the transition from the Health Committee to the Finance and Expenditure Committee so maybe there is hope for all of us yet. 
Maybe it was all that talk of portfolio investment entities (PIEs)—I do not know—but I was inspired to get to my feet and make a contribution to this debate. I do not want to talk about PIEs; I thought I might talk about clause 6 which refers to use-of-money interest. Again not having followed this bill through the select committee process on just a first reading of it I have a couple of questions for the Minister in the chair the Minister of Revenue as well. They are probably easily answered by any member of the select committee actually. 
New section DB 3B which is to be inserted in the Income Tax Act 2007 by clause 6 states: “(1) A person is allowed a deduction for an amount of interest they are liable to pay under Part 7 of the Tax Administration Act 1994.” Part 7 put simply states: “A taxpayer is liable to pay interest on unpaid tax to the Commissioner in accordance with this Part.” In other words if we do not pay our tax on time a use-of-money interest is applied to those unpaid taxes and we are liable to pay that tax. This new section DB 3B(1) says that a person is allowed a deduction. It is not clear to me just from reading this at first glance what the criteria are for that deduction—what makes someone able to apply for that deduction—so I wondered whether the Minister would address that issue. 
In an earlier bill I was lamenting the fact that the Inland Revenue Department now owes me money. I wonder whether this works the other way where the Inland Revenue Department has to pay interest on the use of money it has if one ends up overpaying tax student loan fees or anything like that. 
Sue Moroney 
: So you could buy more pies. 
IAIN LEES-GALLOWAY 
: One could buy more pie with the interest that one earned. 
Hon Lianne Dalziel 
: They kept demanding my husband’s student allowance after he paid it all back. 
IAIN LEES-GALLOWAY 
: Well that is what happened to me as well. It is atrocious. It is a terrible situation and I hope that something is being done about that situation. 
As someone who is coming to this for the first time I ask the Minister what the criteria are for getting a deduction for interest that one is liable to pay if one has not paid all one’s taxes and use-of-money interest is being applied to it. I would appreciate the Minister answering that question. It looks like he is keen to get to his feet and give us an answer and that would be fantastic. 
The question was put that the following amendments in the name of the Hon Peter Dunne to the proposed amendments set out on Supplementary Order Paper 254 in his name to Part 1 be agreed to: 
to omit from clause 7DB “EZ 23B(7) (Insurance or compensation for depreciable property replaced because affected by Canterbury earthquakes)” and substitute “EZ 23B(8)(Property acquired after depreciable property affected by Canterbury earthquakes)”; 
to omit from section EE 44(2)(d) in clause 7DC “Insurance or compensation for depreciable property replaced because affected by Canterbury earthquakes” and substitute “Property acquired after depreciable property affected by Canterbury earthquakes”;  
to omit the heading above section EE 47(4) and section EE 47(4) in clause 7DE and substitute the following heading and subsection: 
“Irreparable damage or damage rendering building or grandparented structure useless 
“(4)The third event is— 
“(a)the irreparable damage of an item or property that is not a building or grandparented structure; or 
“(b)the damage of an item of property that is a building or grandparented structure or of the neighbourhood of the building or grandparented structure causing the building or grandparented structure to be— 
“(i)useless for the purpose of deriving income; and 
“(ii)demolished or abandoned for later demolition.”;  
to omit section EE 48(3)(a) in clause 7DF(5) and substitute the following paragraph: 
“(a)the building or grandparented structure has been rendered useless for the purpose of deriving income and demolished or abandoned for later demolition as a result of damage to the building or grandparented structure or of the neighbourhood of the building or grandparented structure; and”; and 
to omit section EE 23B in 12BB and substitute the following section: 
“EZ 23B Property acquired after depreciable property affected by Canterbury earthquakes 
“ 
When this section applies 
“(1)This section applies for a person and an income year (the  
current year 
) before the 2016-17 income year when the person— 
“(a)in or before the current year receives insurance or compensation for items of depreciable property (the  
affected property 
) each of which as a result of a Canterbury earthquake as that term is defined in section 4 of the Canterbury Earthquake Recovery Act 2011— 
“(i)if not a building or grandparented structure is irreparably damaged; or 
“(ii)if a building or grandparented structure is rendered useless for the purpose of deriving income and demolished or abandoned for later demolition because of damage to the building or grandparented structure or to the neighbourhood of the building or grandparented structure; and 
“(b)in the absence of this section would have in or before the current year from insurance or compensation for the items of affected property (the  
affected class 
) in 1 of the categories referred to in subsection (10)(b) total depreciation recovery income under section EE 48 (Effect of disposal or event) exceeding the total amount for the affected class of depreciation loss treated as a positive amount under section EE 48; and 
“(c)plans in the current year to acquire depreciable property (the  
replacement property 
) meeting the requirements of subsection (7); and 
“(d)gives written notice to the Commissioner under subsection (9)— 
“(i)specifying the affected property: 
“(ii)linking for the purposes of this section each item of acquired replacement property with an affected class. 
“ 
Depreciation recovery income and suspended recovery income 
“(2)The amount for the affected class of the excess referred to in subsection (1)(b) (the  
excess recovery 
) is not depreciation recovery income except to the extent of the amount that— 
“(a)remains after adjustment under subsection (3) or (6) (the  
suspended recovery income 
); and 
“(b)is attributed to an income year by subsection (7). 
“ 
Effect of acquiring item of replacement property if suspended recovery income from affected property not in pool 
“(3)If the person acquires an item of replacement property (the  
replacement item 
) and links the replacement item with affected property for which the person does not use the pool method the amount given by subsection (4)— 
“(a)is treated as not being included in the amount of the person’s expenditure on the replacement item for the purposes of determining— 
“(i)under section EE 16(4) (Amount resulting from standard calculation) the item value or cost for the replacement item if the person uses the diminishing value method or straight-line method for the replacement item; or 
“(ii)under section EE 22 (Cases affecting pool) the cost of the replacement item if the person uses the pool method for the replacement item; and 
“(b)is a reduction in the amount of the suspended recovery income for the affected property. 
“ 
Amount of reduction: expenditure on replacement item and suspended recovery income 
“(4)The amount of the reduction under subsection (3)(a) or (b) for a replacement item and affected property for which the person does not use the pool method is— 
“(a)zero if the cost of the affected property equals or is less than the person’s total expenditure in acquiring with or before the replacement item other replacement property linked with the affected property; or 
“(b)the amount calculated using the formula— 
limited replacement cost x excess 
affected cost. 
“ 
Definition of items in formula 
“(5)In the formula— 
“(a) 
limited replacement cost 
 is the lesser of the following: 
“(i)the amount by which the cost of the affected property exceeds the total expenditure in acquiring with or before the replacement item other replacement property linked with the affected property: 
“(ii)the amount of the expenditure on the replacement item: 
“(b) 
excess 
 is the excess recovery for the affected property: 
“(c) 
affected cost 
 is the total cost for the person of the affected property. 
“Effect of acquiring item of replacement property if suspended recovery income from affected property in pool 
“(6)If the person acquires an item of replacement property (the  
replacement item 
) and links the replacement item with affected property for which the person uses the pool method— 
“(a)the amount of the person’s expenditure on the replacement item is treated as being reduced by the amount equal to the lesser of the amount of expenditure on the replacement item and the amount of suspended recovery income for the affected property after the acquisition of other replacement property with or before the replacement item for the purposes of determining— 
“(i)the adjusted tax value of the replacement item if subparagraphs (ii) or (iii) do not apply; or 
“(ii)the cost of the replacement item for the straight-line method if that method is used to determine depreciation loss for the replacement item; and 
“(iii)the adjusted tax value of the pool of the replacement item if the person uses the pool method for the replacement item; and 
“(b)the amount of the suspended recovery income for the affected property is reduced by the amount of the treated reduction under paragraph (a). 
“ 
Requirements for replacement property 
“(7)An item of replacement property for a person must— 
“(a)be depreciable property that is not depreciable intangible property; and 
“(b)be acquired in or before the person’s 2015-16 income year; and 
“(c)be included in the same category under subsection (10)(b) as the affected class with which the person links the item if the affected class is described in subsection (10)(b)(i) or (ii); and 
“(d)be located in greater Christchurch as that term is defined in section 4 of the Canterbury Earthquake Recovery Act 2011 if the item is a building grandparented structure or commercial fit-out. 
“ 
Amount of depreciation recovery income 
“(8)The person has in an income year for affected property an amount of depreciation recovery income equal to the amount of suspended recovery income for the affected property— 
“(a)at the end of the income year if that year is the 2015-16 income year and neither of paragraphs (b) and (e) 
apply earlier; or 
“(b)when in the income year the person decides not to acquire more replacement property if neither of paragraphs (a) and (e) apply earlier; or 
“(c)when in the income year the person goes into liquidation or becomes bankrupt if neither of paragraphs (a) and (b) apply earlier. 
“ 
Notice of election for affected property 
“(9)A person choosing to rely on this section to suspend in a current year the recognition of suspended recovery income from the insurance or compensation for affected property must give written notice to the Commissioner— 
“(a)for the earliest income year (the  
estimate year 
) in which the amount of the insurance or compensation for the affected property can be reasonably estimated by the later of 31 January 2012 and the date on which the return of income is filed for the estimate year; and 
“(b)if the current year is after the estimate year— 
“(i)for each income year between the estimate year and the current year by the date on which the return of income is filed for that income year; and 
“(ii)for the current year by the date on which the return of income is filed for the current year. 
“ 
Contents of notice of election 
“(10)A notice under subsection (9) must— 
“(a)describe the items of affected property; and 
“(b)indicate in which of the following categories each item of affected property is included: 
“(i)a building or grandparented structure not referred to in subparagraph (iii): 
“(ii)commercial fit-out not referred to in subparagraph (iii): 
“(iii)depreciable property for which the person uses the pool method: 
“(iv)depreciable property not referred to in subparagraphs (i) to (iii); and 
“(c)give details of each item of replacement property acquired in the current year and the affected class to which the person is linking the item; and 
“(d)give the amount of the expenditure on the replacement item and the reduction under subsection (3) or (6) of that expenditure for the purposes of determining adjusted tax value or depreciation loss; and 
“(e)give the amount for the affected class of the suspended recovery income at the end of the current year. 
“ 
Disposal of replacement property: reduction in cost treated as depreciation loss 
“(11)For the purposes of section EE 48 the amount by which a person’s expenditure on a replacement item is treated as being reduced under subsection (3) or (6) is an amount of depreciation loss for the item for which the person has been allowed a deduction. 
“ 
Relationship to subpart EE 
“(12)This section overrides subpart EE (Depreciation). 
Defined in this Act: adjusted tax value amount assessable income building commercial building commercial fit-out depreciable intangible property depreciable property depreciation loss depreciation recovery income grandparented structure income year liquidation notice pool pool method return of income straight-line method. 
Amendments to the amendments agreed to. 
The question was put that the amendments as amended set out on Supplementary Order Paper 254 in the name of the Hon Peter Dunne to Part 1 and the amendments set out on Supplementary Order Paper 263 in his name to Part 1 be agreed to. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 110 
New Zealand National 57; New Zealand Labour 42; ACT New Zealand 5; Maori Party 4; Progressive 1; United Future 1. 
Noes 10 
Green Party 9; Independent: Carter C. 
Part 1 as amended agreed to. 
Part 2 Amendments to Tax Administration Act 1994 
The question was put that the amendments set out on Supplementary Order Papers 254 and 263 in the name of the Hon Peter Dunne 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 110 
New Zealand National 57; New Zealand Labour 42; ACT New Zealand 5; Maori Party 4; Progressive 1; United Future 1. 
Noes 10 
Green Party 9; Independent: Carter C. 
Part 2 as amended agreed to. 
Part 3 Remedial matters and abolition of gift duty 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I will raise exactly the same issue that I raised before but from a slightly different perspective. This issue was not done by way of Supplementary Order Paper but included in the provisions of the original bill—namely the issue of gift duty abolition being included in something called the Taxation (Tax Administration and Remedial Matters) Bill. I say that the Labour Party will be voting against this part and voting against the legislation as a whole because it contains this offensive provision. 
When we look at what a tax administration and remedial matters bill is for we see that it is not for a matter of significant policy such as the abolition of gift duty. That matter deserves to be part of a policy bill not something called a tax administration and remedial matters bill. I believe that it is a fundamental issue in terms of how these things are portrayed to the public when submissions— 
Hon Trevor Mallard 
: It’s misleading advertising. 
Hon LIANNE DALZIEL 
: It is misleading advertising. When we think of the submissions being called for—the select committee puts a notice in the paper and says it is calling for submissions on the Taxation (Tax Administration and Remedial Matters) Bill—do members think that anyone on earth would know that that bill would include a policy matter? Would anyone think that? When I first arrived in Parliament some 21 years ago this year— 
Hon Trevor Mallard 
: Oh! 
Hon LIANNE DALZIEL 
: I know; I was just a child at the time. When I came here all sorts of things used to be hidden behind names like this one. We had the Social Security Amendment Bill that contained benefit cuts. We had the Finance Amendment Bill (No 2)—or 3 4 5 or whatever—again hiding all of these things. The title did not disclose what the detail of the legislation was all about. Here we have the Taxation (Tax Administration and Remedial Matters) Bill which is getting rid of gift duty something that surely should be subject to quite a significant policy debate. I object to the use of a tax administration bill to deal with a matter of policy. 
Let us turn to the matter of policy. When we hear from the Government over and over again that we in this country should not be dealing with matters that we cannot afford when we are looking at changes to benefits and when we are looking at all sorts of things as far as the Government expenditure side goes why is the Government reducing our revenue on the other side of the ledger as part of this? 
Hon Member 
: $1 million! 
Hon LIANNE DALZIEL 
: It does not matter how much we are talking about. 
Aaron Gilmore 
: Saving $65 million a year. 
Hon LIANNE DALZIEL 
: I am sorry that figure is nothing to the National Party. It is nothing to the National Party that $65 million per year is up for grabs as far as this provision is concerned. 
We are actually talking about the Government saying it will do away with a form of revenue for the Government at a time when it is preaching hardship for every element of expenditure on the other side of the ledger. I think that is outrageous. I think it is important that as a country we deal with these issues and we do it on a principled basis. The principle here is that we know that the removal of this particular duty will open up a significant range of tax-avoidance opportunities. We know that will be the case. The Minister in the chair the Minister of Revenue may well shake his head but I expect him to take a call on this part and to respond to this particular issue in order to tell us why no tax-avoidance opportunities—I presume that is what he is saying—are opened up by the removal of gift duty. 
He has already been part of a Government decision to benefit—what percentage of income earners benefited from the tax cuts that we had last year? The top 10 percent of income earners. Now that same group of people is benefiting again from changes to our gift duty regime. Abolishing gift duty in the context of the massive unaffordable tax cuts given to the top income earners in New Zealand last year by this Government strikes me as really just looking after the interests of those people at the very top and not really caring about those who have to pay for an increased cost of living without having any commensurate decrease in their amount of taxation. 
I think gift duty is part of a progressive tax system. Its abolition will favour those people at the top end of the scale. I believe it is important that Government members stand to take a call on this issue to ensure that proper analysis of it is undertaken. 
I also understand that members of the Finance and Expenditure Committee were deeply concerned about the inexactitude of the regulatory impact analysis process. They felt that it failed to achieve the requirements of a robust process. I would like the Minister of Revenue to respond to that as well. 
Hon PETER DUNNE (Minister of Revenue) 
: 
 There are a number of things I should say by way of response. The first is to take up the member’s point about the timing of this legislation. My recollection is that the announcement that gift duty was to be abolished was made in June of last year June 2010. We said at the time that the legislation would be introduced via the next available legislative vehicle which happened to be this Taxation (Tax Administration and Remedial Matters) Bill. There is nothing unusual in policy changes being introduced in legislation of this type because these are in effect umbrella bills. The bill then went to the Finance and Expenditure Committee and submissions were called for on the provisions. The committee went through the bill and came back with a recommendation which we are now implementing many months later. 
Prior to the decision even being made a substantial review had been undertaken across the Government about whether we should simply just increase the threshold or abolish gift duty altogether. It became clear during that review that agencies like the Ministry of Economic Development Treasury the Ministry of Justice the Ministry of Health the New Zealand Police the Ministry of Social Development and the Housing New Zealand Corporation all said that with regard to potential abuses of the system which the member has referred to existing powers in existing legislation were more than adequate to deal with those concerns and that gift duty our second-oldest tax after stamp duty was therefore an anachronism and ought to be gone. 
But the story gets more compelling. Each year several hundred thousand gift duty returns are made to the Inland Revenue Department. Over 98 percent of those are nil returns. We spend about $500000— 
Hon Trevor Mallard 
: Nil tax or nil gifts? 
Hon PETER DUNNE 
: Nil in terms of the— 
Amy Adams 
: Nil tax paid. 
Hon Trevor Mallard 
: Nil tax not nil gifts? 
Hon PETER DUNNE 
: That is right. We spend about $500000 a year administering the gift duty system; we raise about a million dollars a year. So we have a tax that raises $500000 net a year but 98-plus percent of those who are affected by it are not actually caught by it. But here is the rub: any reasonable assessment shows that it is costing taxpayers not $500000 but $70 million a year to comply with the duty. That becomes somewhat of a no-brainer when the advice then becomes very strong that existing legislation in other areas is dealing with the mischief we are seeking to address in the first place. So the logic for retaining gift duty simply goes out the window at that point. The only people who are a little concerned about its departure I dare say are lawyers and accountants who for years have done very very well in terms of filing returns and preparing information to go to the Inland Revenue Department. It has been an easy source of income for them. Well not any longer. 
When estate duty was abolished in 1992 the Government of the day considered abolishing gift duty but decided not to at that point because it was a revenue earner. The reality is that it is not any more. We have significant provisions in other social legislation that take account of the capacity of people to manipulate the system so gift duty’s day has long since been and gone. What this legislation does—and I am very proud of the fact—is bury it from 1 October this year. There will be adequate provisions in other legislation and they will be enforced. That is what was intended to be the case all along. 
The strong argument that one could mount for the retention of gift duty was not all that strong. It was simply that if we take the duty away then other legislation will have to be enforced. That is really what it comes down to. Gift duty has been a convenient way out: we have not needed to worry about enforcing other legislation because we have had gift duty. That is back to front. Gift duty is costing taxpayers a lot of money it is raising very little for the Crown it is irrelevant it is time for it to go and that is what this legislation will do. 
In the time remaining to me I will pick up a point that Mr Lees-Galloway made in relation to an earlier part concerning use-of-money interest. He will find that the answers to his questions are actually contained in the provisions of this part regarding the way in which use-of-money interest applies and also the obligations for both the Crown and the taxpayer in that respect. 
RAYMOND HUO (Labour) 
: 
 With respect I think the Minister was wrong. 
Aaron Gilmore 
: Cutting. 
RAYMOND HUO 
: That member can take a call. The reason why I said the Minister was wrong is simply that estate duties were abolished in 1992 but gift duties remained in place not only for revenue but for a very good purpose. Gift duties remained in place to prevent people from giving away large assets in order to avoid paying creditors to obtain access to Government advantage or to avoid tax liabilities. 
I am inspired by the Minister’s press release published in November last year which I will read out: “Earlier this year I announced”—that is I the Minister not me—“that the Government’s intention to remove gift duty if concerns regarding creditor protection”— 
Simon Bridges 
: Who’s speaking? Is this Raymond or the Minister? 
RAYMOND HUO 
: —the member will listen please—“and social assistance targeting could be addressed.” said Mr Dunne. He went on to say: “Since my announcement there has been considerable work done by officials across government to assess the concerns. This work has revealed that the protection that gift duty offers in the areas of income tax creditors and social assistance has only ever been incidental and very limited.” That is a rather interesting position. 
I was not sitting on the Finance and Expenditure Committee for this particular bill but I had access to the submission from the New Zealand Institute of Chartered Accountants. I am sure the new chair of the select committee Amy Adams will be even more informed in this area. The submission from the New Zealand Institute of Chartered Accountants notes a number of tax-avoidance opportunities that may arise in the absence of gift duty and the institute established at least five such scenarios. The Law Society and a number of other submitters raised a further concern that the abolition of gift duty would create problems for the enforcement of claims under the Property (Relationships) Act 1976 and the Family Protection Act 1955. Of course those submissions are from the lawyers and accountants the Minister just described using very interesting language. 
Even Inland Revenue Department officials cautioned in the regulatory impact statement that tax avoidance could increase in the absence of the duty. I will quote: “it is not possible to precisely determine the extent to which gift duty alleviates issues such as income tax minimisation social assistance targeting and defeat of creditors.” On that note I wish that the Minister would take a call and enlighten us in that area. Thank you. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I am very pleased to take a call on the clauses in Part 3 of the Taxation (Tax Administration and Remedial Matters) Bill that cover remedial matters and the abolition of gift duty. I turn to the issues around the abolition of gift duty. I do not think the Minister is giving the fullest picture on these issues. The fact that gift duty raises only about a million or a million and a half dollars a year is not the only point for consideration. Actually gift duty exists to prevent tax avoidance and structuring. By scrapping gift duty we are opening a way to more tax avoidance and structuring. We have to remember—and this is at the heart of why Labour is opposing this part of the bill—that we have seen two rounds of tax cuts for top income earners. I think a chorus of voices is starting to be heard on ongoing tax reductions for those at the top end of town. We need only to read today’s  
Press 
—I know it is in there and it is probably in the  
Dominion Post  
as well—to see the commentary from Warren Buffett the wealthiest man in the world who has commented that he wants to pay more tax should pay more tax and is paying half the tax rate of his secretary which he thinks is wrong wrong wrong. When we abolish gift duty taxes we are furthering the ends of people like that. 
If members think this relates only to Warren Buffett they should take another look. If we look at last Sunday’s  
Herald on Sunday 
 we see that a column by Bernard Hickey noted that we have a situation in this country where a change has happened over the last 20 years. The top 1 percent of income earners are now taking more than double what they were taking in the mid-1980s. They are now taking nearly 14 percent. Fourteen percent of the national income in the hands of the top 1 percent of income earners is a doubling since the 1980s in this country. In America it is 20 percent so Warren Buffett is doing particularly well. Many other people in this country are benefiting from tax breaks like these being passed by this Government under the changes in the Taxation (Tax Administration and Remedial Matters) Bill. But it is just not appropriate—at this point most particularly in our economic and financial cycles when we have this country doing it tough—to send a signal to people at the top end of town that not only will they get two rounds of income tax cuts but also the Government will pass a bill that will effectively allow them to continue structuring things in a way that will not be subject to the scrutiny of the Inland Revenue Department. That is why Labour is opposing this bill. It is wrong wrong wrong to continue piling money into the accounts of people who as Bernard Hickey has observed are already getting 14 percent of the national income—14 percent is in the hands of 1 percent of the population which is a doubling since the 1980s. 
I challenge any member opposite to stand up in this Chamber and say that that is fair and that that is the kind of New Zealand they truly want to live in. When we get extremes of wealth on one hand we will then get the resulting extremes of poverty on the other. I have seen that kind of split in society. I lived briefly in South Africa in the 1980s. That is the kind of split that sees people with barbed wire fences around their homes in the leafier suburbs of town and sees people rioting on the streets because they just do not think they are getting a fair shake. Maybe we have seen some portent of that in Britain in the last couple of weeks too. 
We need to have an equitable society and gift duty may not be an income earner of any real recourse to the Inland Revenue Department but it is there for another reason: it is there to try to ensure that people pay their fair share of tax and that people do not structure and avoid tax through estates. That is the reason for it. In fact the analysis shows why it is important. When $70 million is being spent to avoid $1 million of tax what does that say? It says that there must be some considerable benefit to people for that amount of money to be spent trying to protect them from tax of that level. I say to this Parliament that we have a situation. When we get observers like Bernard Hickey from interestrate.co.nz saying that we have a situation in this country— 
The CHAIRPERSON (Eric Roy) 
: I have rung the bell; the member should sit down. Mr Robertson were you seeking the call? 
Grant Robertson 
: I was seeking the call. 
The CHAIRPERSON (Eric Roy) 
: I call Grant Robertson— 
Hon Trevor Mallard 
: Mr Burns didn’t have more than one call. 
The CHAIRPERSON (Eric Roy) 
: He did not seek the call. Are you raising a point of order Mr Mallard? 
Hon Trevor Mallard 
: No I am just chairing from the seat as you did Mr Chair. 
The CHAIRPERSON (Eric Roy) 
: Ha ha! 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 During the call that Brendon Burns has just taken Simon Bridges interjected from the other side of the Chamber that Labour was interested in “envy tax”. Well I have something to say to Mr Bridges. I am interested in a fair tax system where people pay their fair share—a fair tax system where people pay their fair share. We have heard a lot about the need to tighten our belts as a country as we deal with recession. We have heard a lot from members on the other side about the fact that these are tough times and there need to be cuts and we need to make sure that every dollar is spent wisely. Who bears the brunt of the need to tighten our belts? Who has to take the steps to deal with the recession? It is those on the lowest incomes. When do we see the people who benefited most in the financial boom times—the people who benefited most from the very things that actually led to the recession—paying their fair share? When do we see that from the Government? That is why on this side of the Chamber we are opposing the Taxation (Tax Administration and Remedial Matters) Bill. The abolition of gift duty is yet another step by this Government in saying that the people who have to pay for the effects of the recession are those on the lowest incomes while at the same time tax cuts—round after round of tax cuts—benefit mainly the highest-income earners. Now gift duty is being taken away. As other speakers have said it is not just about the revenue gathered; it is about the tax-avoidance measures. We now see yet again from this Government— 
Aaron Gilmore 
: Mr Robertson’s a tax expert! 
GRANT ROBERTSON 
: Aaron Gilmore says “tax expert”. I will tell members what I think I might be a bit of an expert on and that is fairness. That is actually giving people a fair go. 
Amy Adams 
: Fairness? Oh my God! 
GRANT ROBERTSON 
: Amy Adams decries the concept of fairness. Well if we do not have fairness in our society if we do not try to include people in our society and give them the chance to achieve their potential then we run the risk of people feeling excluded. We run the risk of London-style activities happening because people have no role in the future of their society if we do not include them. If we as a country keep letting the gap between rich and poor grow that is how social exclusion grows. That means people are not able to fulfil their potential. Bills like this that abolish gift duty and taxation packages from the National Government that favour those who have the most against those who have the least will lead to the gap between rich and poor growing. 
This measure adds to unfairness. It does not mean that people will pay their fair share in our taxation system. And I would say that that should be the basis of any taxation system. Regardless of the details where tax experts are required the fundamentals that parliamentarians get to decide on are whether a tax system is fair. This Government throughout its term has made our tax system more and more unfair. It has weighted all of the tax cuts in favour of those who earn the most; and those who earn the least—those who have actually struggled through the recessionary times—are the people who constantly have to make the sacrifices. The sacrifices are not being made by the people who have not paid tax for years and years. 
We have heard about Warren Buffett from Brendon Burns. We heard from Sam Morgan who said that he should be paying more tax. He said that he should be paying more tax—and he should be paying more tax. He acknowledges that he wants to do that. But Mr Gilmore and his colleagues on the National side are saying that those on the lowest incomes have to take the cuts in services and have the punitive measures put in place and those on the highest incomes continue to get tax cuts and no longer have to pay gift duty. Those are the people being favoured by this kind of provision and that is wrong in my view. This bill has been brought before Parliament as my colleague Lianne Dalziel said through what is called an administration and remedial matters bill but in actual fact the removal of gift duty sits alongside other fundamental policy issues that in my view have made our tax system more unfair and in turn will make our society more unfair. We can do so much better than this by having a tax system that actually taxes income in all its forms. I believe we must do that. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I do not think we often get bills that more clearly define the difference between the people who are ruling in the interests of the wealthy and high-income earners and the people who care about middle-income New Zealanders and about common sense. I throw back to the Minister in the chair the Minister of Revenue his comments that helped him do so well at a previous election and I point out to him that this bill the Taxation (Tax Administration and Remedial Matters) Bill is not about revenue in the end. I agree with him on that. It is about a brake on transferring wealth to avoid the revenue system in other ways. 
He knows well the thousands and thousands of cases of Kiwis who through use of trust arrangements gain Working for Families. He knows of the kids of the farmers all over the country who drive Ranger Rovers to university and then get full student allowances. They drive to university in Range Rovers owned by the family trust and then they claim allowances while poor kids and middle-income kids—people whose families are earning way below the average income—are not eligible for those allowances. The Minister knows that the brake on the transfer of assets and also income to trusts is gift duty. It is one of the brakes—I think administrative stuff and legal fees are one of them—but it is one of the very important brakes. It does not stop the process but it slows the process. 
It means that for very large assets it can take decades to transfer funds from an individual to a trust or through the forgiving provisions which I am sure the member is aware of. I know that a lot of members opposite are aware of the provisions that forgive and therefore gift. 
Hon Lianne Dalziel 
: They loan and then they gift. 
Simon Bridges 
: Hey I drive a Hyundai man! 
Hon TREVOR MALLARD 
: They loan and then they gift and Simon Bridges is proud of it. He says “I have ripped off the tax system! I make middle-income people pay tax while I avoid mine!”. That is what Simon Bridges says and he is proud of it. I think it is amazing that we have a young member who is meant to be principled but who is so proud that poor people pay tax so he can avoid it—poor people pay tax so he can avoid it. 
I want to know whether the people of Ohariu-Belmont in the Minister’s electorate are aware of that fact because most of them are wage earners and salary earners—the vast majority of them—and I want to know whether they are happy with him acting for the privileged in the way he is doing now. 
You know I agree with the vast majority of his argument on abolishing gift duty. There is not a lot of money in it—there is not a lot of money in it. There is some administration involved in administering it and there is a lot of money spent on lawyers and accountants—far far too much. I mean there is nothing wrong with the photocopier as far as many of these trusts are concerned in my opinion. But this change is designed to let people of privilege hide their wealth hide their income and rip off the State. I am sick of the biggest beneficiaries of the tax system being the rich. I am sick of the Prime Minister getting $1000 a week in tax cuts while the GST goes up on my beneficiaries. I am sick of an arrangement being made to void the tax liabilities of people who are the wealthiest. 
This Minister I believe actually deep down knows what he is doing is wrong. He used to have principles—he used to have principles. We discussed these matters in the past. What he is doing to suck up to his ministerial colleagues is taking a bill through that privileges the rich. 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I was reminded listening to the member Trevor Mallard particularly but also to one or two of his colleagues beforehand about a statement that Winston Churchill once made about I think Aneurin Bevan. He said that the honourable member should not develop more indignation than he can contain which I think was certainly true during the previous speech. 
Hon Trevor Mallard 
: Is that a challenge? 
Hon PETER DUNNE 
: The bar might be high; I do not think the member could get there. 
Let me come to some of the points he has made. I am sorry to disillusion him on a key premise of his argument but I am not in the least unhappy about the Taxation (Tax Administration and Remedial Matters) Bill being passed. I have promoted the abolition of gift duty during the time that his Government was in office and beforehand so I am delighted to see something that I have been committed to for a long time finally being achieved. 
I listened to the arguments that essentially say that this is fundamentally unfair because somehow it is taking away a block. We know it does not actually raise any money but it is a sort of symbolic thing that stops people from behaving in a way that we might regard as inappropriate. Well I have two comments to make on that argument. Firstly tax law is not about symbolism; tax law is about getting the revenue that the Government needs to perform its functions. Every member who has spoken in this debate so far acknowledges that we get no revenue effectively from gift duty but the argument somehow seems to be that it is a symbolic impact. 
The second point I will make is that if we look at the other mechanisms available—the social security legislation the legislation that the Ministry of Social Development administers regarding access to the various long-term health and social subsidies—we can see that provisions within those pieces of legislation can prevent exactly the type of concern that members opposite are professing this afternoon. Then also— 
Hon Trevor Mallard 
: The student allowance legislation? 
Hon PETER DUNNE 
: I will come to that in a minute. The member made reference to the ability of people to manipulate trusts. In fact one of the things this Government did last year was align the trust and top personal tax rates so that the logic of using a trust as an evasion or an avoidance mechanism was considerably diminished. 
The member talks about Working for Families and he talks about student allowances. We have made it very clear. We legislated in the wake of last year’s Budget for definition changes for the purposes of income affecting Working for Families. Work is under way it was announced earlier this year on student allowances—that is about to follow. I am trying to put before the member the fact that a comprehensive suite of measures is being put in place— 
Hon Trevor Mallard 
: The Minister just confirmed it. 
Hon PETER DUNNE 
: Confirmed what? 
Hon Trevor Mallard 
: Confirmed that you can drive the trust Range Rover and then get a student allowance. 
Hon PETER DUNNE 
: Absolute nonsense. No one cannot. A funny claim was made at one stage by the Labour Party in the Finance and Expenditure Committee that somehow one could get all one’s school fees exempted. We went and checked that and no one found any record to give any substance to that claim. I say to the member that the Range Rover claim comes into the same category. 
This issue is a simple one of administrative efficiency. We get no money from this tax we spend about half of what we actually get on administering it and there is a massive compliance cost on people for being part of it. It is a no-brainer when we have other measures in place to address the concerns that members opposite raise that we need not continue with a tax that was put in place in the 1880s—it has been around since 1885—in an entirely different environment from that which prevails today. Members opposite are arguing a bit of nostalgia politics. I would not call it envy politics. It is: “Let’s keep what we’ve always had because it has always been there.” Under that scenario we would never make any change whatsoever. 
This is a tax whose time has been and gone. This is a tax that most New Zealanders will be pleased to see the back end of. The demise of this tax was well and truly foreshadowed. It is now time to perform the last rites on it and this legislation does precisely that. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I want to follow on from the Minister of Revenue’s comments and also those of some of my colleagues. I now have a copy of the regulatory impact statement in front of me. I enjoy reading regulatory impact statements but this one is of particular interest to me because now I understand why the Finance and Expenditure Committee was concerned about it. I want to read a paragraph from it then reflect on another element of it because it has a detailed analysis of where this $60 million to $70 million has come from. “We recommend that gift duty be repealed on the basis of enhanced efficiency simplicity and administrative costs and the significant reduction of private sector compliance costs (although fiscal cost is also a relevant consideration). We believe that gift duty does not fulfil its current objectives and the risks of its repeal are low. However it is not possible to precisely determine the extent to which gift duty alleviates issues such as income tax minimisation social assistance targeting and defeat of creditors. Therefore it is important that affected government agencies monitor the effects of gift duty repeal on their areas and make any necessary operational changes.” 
What is also instructive—and I am so glad I was referred to this—is the Government agencies that Treasury and the Inland Revenue Department consulted on this measure. There were the obvious ones—the Ministry of Economic Development the Ministry of Justice the Ministry of Health the Ministry of Social Development and the Housing New Zealand Corporation because they are all relevant—but also the New Zealand Police. I think the New Zealand Police is in that mix because of the whole risk area around money-laundering. I think the Minister should give us a little bit more of a discussion point around what these different Government agencies have done or are planning to do in order to address issues such as income tax minimisation social assistance targeting fraud and defeat of creditors. I would have thought defeat of creditors would be a matter of significant substance for the Government to consider in these circumstances. 
I come to the question of how much this measure will save the private sector. Various Government members have chipped across the Chamber about how much it is costing the private sector to be exposed to the gift duty regime. I could not quite understand where the compliance costs of $70 million had come from but now I do understand. So I would like to take the time of the House to explain very carefully where the $70 million comes from. 
Under standard gifting programmes to family trusts a number of deeds are required that must be filed with the Inland Revenue Department in addition to gift statements. Initially a deed of sale is required when the asset is transferred to a trust. Then a deed of acknowledgment of debt is drawn up and annual deeds of forgiveness are required to reduce the outstanding debt. The average cost quoted by practitioners is $285 plus GST to draw up the annual deed of forgiveness and to file it along with the gift statement. If this cost is grossed up to reflect the 225000 gift statements filed each year it reveals more than $70 million in annual costs to the private sector excluding the initial costs of setting up the gifting programme the deed of sale and the deed of acknowledgment of debt. Well I find that extraordinary. I do not know whether others find that extraordinary as well. But what the Government is essentially accepting as the basis for its claim that this measure will save $70 million is the fact that the regime we have in place at the moment actually allows only $27000 per year to be transferred without any tax being paid and what the Government wants is for people to be able to transfer the lot instantly in 1 year with no tax implications whatsoever. That is exactly what will happen and that is exactly what the legislation was kept in place to ensure would not occur for a whole lot of other reasons. 
I recognise that the social assistance targeting does use a different set of criteria and often it is the conflict between the criteria that confuses people. They think they can gift up to $27000 a year or forgive $27000 a year of a loan but in fact the social security amount will be $5000 a year. Of course the department can go back year after year over 5 years to look at whether a person has deprived themselves of an asset. 
I remember when the surcharge was in place. A relatively new member of Parliament at the time who had come in at the same time as me one Michael Laws went around the country explaining to people that they could enter into a gifting programme in order to avoid paying the surcharge. He basically said that for 5 years a person had to gift up to $5000 a year but once they had got past those 5 years where the claw-back applied they could gift up to $27000 a year without any worry in terms of shifting that asset. So in actual fact there will be situations where the Government is saying that it will make it absolutely crystal clear that there is no limitation in terms of the transfer of the asset other than changes that may be made directly to the social security scheme as well. 
I have not gone into the question of the creditors because I am a little bit worried about where that might take us. When the Government of the day repealed the estate duty the gift duty it said was retained for an interim period but what I am really unclear about is what processes have been put in place in order to secure those three areas: first the social security regime; second the protection of creditors which is the one that particularly concerns me; and third the area of protection in relation to the question of the means-testing regimes that might apply and also to other areas of income tax. What I am unclear about is whether the Government has actually taken that additional step to provide for this coverage. 
I do not believe that it is unreasonable for the Opposition to want to see something a little bit more than the regulatory impact statement that has been prepared. What the Government has not said is why it thinks it is acceptable that entire assets can be transferred with no implications for taxation or any other purposes. Why is that the driver? It seems to me that having a regime in place that allows an asset to be transferred without tax implications at $27000 a year does stop people from potentially income splitting. It stops people from potentially transferring major assets over to the ownership of someone else in order to avoid something that they themselves find they are subject to. If it really is to protect themselves against creditors then that obviously is a major worry to all of the SMEs—the small and medium sized enterprises—from one end of the country to the other that find themselves at the end of queue after queue after queue trying to get money off people who have declared themselves without assets. They are unable to claim their asset off them because they have transferred it in one fell swoop rather than having to go through this gifting regime. I do not think the Minister has taken seriously enough the issues we have raised. I hope he will take another call actually work through each of those different areas and explain to us what steps the Government has asked each of those departments to put in place to make sure that this measure does not have the impact that I think the regulatory impact statement has alerted the House to. 
When the regulatory impact analysis was done there were five options put forward for the Government’s consideration. I want to know why this particular option was the preferred option. I turn particularly to the question of creditor protection. There is a view that creditors are given some protection by gift duty because defaulting debtors are unable to transfer assets out of their name without either becoming liable for gift duty or entering into a gifting programme. I guess that is one of the advantages of the system as it is at the moment. It is not so much the amount of tax that it collects; it is the fact that people construct their gifting programme over a longer period of time in order to avoid paying the tax. So in fact not paying the tax is part of what it is designed to achieve. The regulatory impact statement talked about the result of gifting programmes being that the person who is transferring an asset receives a corresponding debt asset by virtue of the interest-free on-demand loan that is exchanged with the recipient in satisfaction of a market value sale. The diminishing amount of the outstanding debt remains because it can be forgiven only at a rate of $27000 every 12 months in order to avoid gift duty. I am aware of some instances where the issue has arisen that the $27000 has been gifted within a 12-month period—because it is not a calendar year; it is a 12-month period. I know a constituent who entered into a gifting arrangement where they were on one side of the line instead of the other. It was in the next financial year but was within the 12-month period. But anyway they had managed to get themselves in a bit of bother over that. 
But the point was that a debt valued at $1 million would take an individual 38 years to completely forgive if one was avoiding gift duties—if that was the point of it. The unforgiven portion of a debt under a gifting programme can be demanded in order to satisfy creditor claims against the transferor. If gift duty is repealed gifting programmes will no longer be necessary because the value of allowable gifts would be unlimited. Therefore when a person transfers a large asset there will no longer be any portion of its value immediately available to be clawed back. I think this is a serious issue. It is probably one of the most serious issues and that is because obviously an official assignee looking at a bankrupt situation would be able to use this as some leverage. 
Sitting suspended from 6 p.m. to 7 p.m. 
Hon LIANNE DALZIEL 
: I was talking about creditor protection concerns and referencing the regulatory impact statement that accompanies this legislation. I had just got to the point where I was identifying how the officials who wrote that report had decided that that would not be a major problem. Essentially it was because people involved in gifting arrangements were not going bankrupt left right and centre and therefore it could not possibly be a problem. But my problem is that this gifting programme allows gifting of $27000 a year. People who do not care about the tax implications can simply gift an entire property and pay gift duty on it but people who want to avoid paying gift duty simply have to limit gifts to $27000 a year. Somebody who was coming up to bankruptcy would have the ability to gift away an entire asset and therefore take it outside the disposition provisions of the Property Law Act. That is an issue that is raised in the regulatory impact statement. It talks about the change of the wording in that Act from “intention to prejudice” to “intention to defraud” and the fact that those words have not been defined by the New Zealand courts. Given the lack of clarity this is something we will have to keep an eye on. 
The areas of potential risk for the Government are listed in quite some detail in the regulatory impact statement and I will come back to that in a later call but I will just talk about the Ministry of Social Development benefits the residential care subsidy the Working for Families tax credits student allowances State housing legal aid—and the Government has a legal aid bill before the House; it very narrowly passed its first reading last night—child support relationship property disputes enduring powers of attorney and trust law concerns— 
SU’A WILLIAM SIO (Labour—Mangere) 
: 
 I am a rugby player. I love playing rugby—rugby league. When I played in better times when I was a lot fitter and stronger I used to love selling the dummy pass. I was good at it. I was good at selling the dummy pass. As long as I had somebody to my side I could show the ball and flick it—pretend that I was flicking it—and I would suck in the other side and always get a score. I used to love that. But I hated it when somebody else did it to me. 
I am using that analogy because I suggest to this Committee that when it comes to the economy and taxation restructuring we have been sold many many dummy passes by this Government. I mean there was the tax switch where the top 10 percent of income earners received over 40 percent of the tax cuts. Somehow— 
Dr Rajen Prasad 
: Dummy pass. 
SU’A WILLIAM SIO 
: Yes—dummy pass again. We were told that those wealthy people would invest their money jobs would be created and somehow the rest of the nation would receive the benefits of the tax cuts that had gone to the rich. Well the reality is that we have high unemployment a high cost of living and families who are struggling. 
We can look at GST. Before the election in 2008 we were sold another dummy pass. We were told that GST would not be increased to 15 percent. Then it was increased to 15 percent and we were told that no one would be worse off. Well the reality is that the highest 10 percent of wage earners pay 7 percent of their after-tax income as a proportion in GST while the lowest 10 percent of earners pay an additional10 percent more than that in GST as a proportion of their after-tax income. 
With the Taxation (Tax Administration and Remedial Matters) Bill the proposal by the Government to abolish gift duty is another dummy pass that we have been told about. Supposedly the proposal is because gift duty generates only $1.5 million but the reality is that the Government is doing this because the duty imposes a high level of compliance costs on the private sector. That is the Government’s wording. We have been told another dummy pass: somehow again this is good for the private sector. 
But let us be quite clear. Why is the gift duty imposed? It is to prevent tax avoidance and structuring. So when we remove gift duty it opens up our economy to tax avoidance and structuring. When we listen to the New Zealand Institute of Chartered Accountants we hear that the institute outlines that a number of tax-avoidance opportunities will arise in the absence of gift duty. Those opportunities include the ability for people to split incomes with those on lower incomes the ability to transfer incomes to loss-making entities the ability to transfer assets in order to meet minimum thresholds for financial arrangement rules and foreign investment fund rules the ability for those with a tax liability to divest themselves of the means to pay and then to claim hardship and the ability to make charitable donations via others so that a higher tax rebate may be claimed. That is mind-boggling. We have been told that this legislation will be good yet you have— 
The CHAIRPERSON (H V Ross Robertson) 
: Order! 
SU’A WILLIAM SIO 
: Sorry. The New Zealand Institute of Chartered Accountants has outlined that tax-avoidance opportunities will arise as a result of the removal of gift duty. We have the regulatory impact statement by the Inland Revenue Department officials who say that “it is not possible to … determine the extent to which gift duty alleviates issues such as income tax minimisation”. In other words the removal of gift duty will give rise to tax avoidance. 
Not too long ago I asked a question of the Minister of Revenue: “What was the total amount of company tax if any written off by the IRD for each month since January 2009?”. I will tell members the answer I received. In January 2009 $9.8 million worth of company tax was written off. In March 2009 $30.7 million worth of company tax was written off. In May 2009 it was $8.9 million in June it was $38.8 million in July it was $12.2 million and so the list went on to June 2011 when it was $11.758 million. 
AMY ADAMS (National—Selwyn) 
: 
 I move  
That the question be now put 
. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I have to say that I am disappointed. I am disappointed that the Government is trying to shut down the debate on this Taxation (Tax Administration and Remedial Matters) Bill already. I am quite fascinated as well because this bill is tidying up the tax system and making it simpler and dealing with a number of remedial issues is something that we on this side of the Chamber would normally support. We do support the vast bulk of provisions in this bill but when we get to Part 3 “Remedial matters and abolition of gift duty” we see that it is just tacked on in there as if it is a remedial matter. It is actually a pretty big deal. 
I have to say that my impression of Parliament having been here 2½ years—going on toward 3 years now—is that we can tell a lot about a Government’s priorities by the legislation it chooses to push through under urgency. Here we are under urgency abolishing gift duty which is a tax cut by stealth for the wealthiest New Zealanders. It is a tax cut by stealth—[ 
Interruption 
] Members are getting very excited over there because those members on the other side of the Chamber are all about privilege and all about protecting their mates and making life easier for their mates. 
They talk about the fact that the people at the bottom of the heap unemployed people need to pick themselves up by their bootstraps. Apparently the kids of the wealthiest New Zealanders do not need to do that; they can expect a free lunch under this National Government. This is a National Government that introduced hereditary entitlement to school attendance and now through abolishing gift duty it wants to make life a heck of a lot easier for those at the top of the heap while it pulls out the ladder for those at the bottom. It is yet another example of National’s priorities being all about the people at the top of the heap and not about the people struggling to get by and struggling to make a living. It is all about making it more possible for people to avoid paying their fair share of tax which is what this Government is all about. 
In fact it is not me who is saying that; the Institute of Chartered Accountants said that about this legislation. It argued that the absence of gift duty creates the potential for people to split their income with people on lower incomes in order to avoid paying their fair share of tax. It is another example of National promoting those at the top of the heap by letting them not pay their fair share while those at the bottom of the heap continue to get whacked. Those people who are doing a hard day’s work and flogging their guts out to make this country a better place to provide for their families get whacked with higher tax under this National Government through increases in GST and the like while the Government is going to help those people at the top of the heap who want to give their money to their kids in order to avoid paying their fair share of tax. That is what it is going to do. 
The other thing is the ability to transfer income to loss-making entities. It is another example of National providing a loophole to allow those on the highest incomes and with the most assets to avoid paying their fair share of tax. It creates the ability to transfer assets in order to meet minimum thresholds for the financial arrangement rules and the foreign investment fund rules. It is another example of National doing its bit so that its wealthy mates can avoid paying their fair share of tax. It creates the ability for someone with a tax liability to divest themselves of the means to pay and then claim hardship. They can give everything away to their kids instantly and then say: “Oh my goodness me! I can’t afford to pay any more so you are just going to have to do whatever you do—bankrupt me even. That’s OK; I am not going to pay my fair share of tax. In fact I am not going to pay my fair share of anything.” That is what people can do if we abolish gift duty. They can give all their money away instantly in order to run away from their problems and to run away from their tax liabilities. That is what this National Government is all about—giving it out to the people who have the most assets and the most income and making life a bit easier for them while the people who are working hard who are scraping to get by and who are paying their fair share get clobbered with paying more under this National Government. 
This abolition of gift duty very clearly sets out what this National Government’s priorities are all about and it is not about the hard-working New Zealanders it is not about the people who are trying to pull themselves up by their bootstraps to make life better for themselves and better for their families; it is all about the people who have the most already—the top 10 percent of New Zealanders who have the lion’s share of the tax cuts under this National Government. That is who it really represents. That is who it is here for. Those are the people who support National and fund its election campaigns and they are the people whom this National Government is happy to work in the best interests of. It is not the people who are working hard who are doing their fair share and who are willing to pay their fair share of tax; they get to pay more through things like the increase in GST. I think that says an awful lot about this Government’s priorities and that is the reason— 
JO GOODHEW (Junior Whip—National) 
: 
 I move  
That the question be now put 
. 
STUART NASH (Labour) 
: 
 As someone who sat on the Finance and Expenditure Committee that reviewed this Taxation (Tax Administration and Remedial Matters) Bill I say that there is a lot of good stuff in here. Of that there is no doubt; there is a lot of good stuff in here. As I think I said in my first reading speech on this bill it is a real shame that the abolition of gift duty provision sort of snuck into the end of the bill. As my colleague Mr Hipkins has said a remedial matters bill is really not the place to insert this sort of legislation. 
What we have in front of us is a bill that runs to about 128 pages so it is quite a substantial bill. As mentioned there is a lot of good legislation in there but about one-fifth of a page is filled by clause 110 “Estate and Gift Duties Act 1968” on the abolition of gift duty. The clause is about 10 lines long and begins “(1) No gift duty is payable under the Estate and Gift Duties Act 1968 in relation to a gift made on or after 1 October 2011.” With those two lines a tax is removed that has been in place for a very very long time. 
I am not saying—and Labour made this clear at the Finance and Expenditure Committee—that we are necessarily against the abolition of gift duty. But we have said that the analysis has not been undertaken to prove that this is the right thing to do. I acknowledge that gift duty is collecting only about $2 million a year. I also acknowledge that it is costing the Inland Revenue Department over $70 million a year. So on the surface there appears to be a little bit of discrepancy around that. But a lot of submitters came to the Finance and Expenditure Committee to say “Hold on a second. This has not undertaken a rigorous analysis to check that the unintended consequences of removing gift duty will not be dire for the country.” 
There are a whole lot of unintended consequences of removing gift duty. Let me list just a couple. The first one is the hiding of matrimonial property. When we quizzed the Inland Revenue Department about that in the select committee its officials said: “Well it’s been looked at by another agency and we think it should be fine. But what we will do is take a look at it a couple of years down the track just to make sure that it is working.” Well that is simply not good enough. It is simply not good enough. 
There is the ability to avoid creditors but I suggest that when this bill goes through tonight when it is signed off there will be an absolute rush to lawyers and accountants by everyone who has a trust and who has not gifted all their assets across to that trust. That is what they will do. I know there are legal precedents that allow creditor courts to look back into gifting and into those trusts to see whether there is any sort of ill purpose there. But I suspect that every single person in business at the moment who has not completed their gifting programme will do so in the knowledge that if everything is working well at the moment but turns to custard in 2 years’ time they will be fine. 
The thing that concerns me about the removal of gift duty in Part 3 is that a hell of a lot of legislation and precedents will be set which will be decided through the courts. They will be decided through the courts because the law is not strong enough and there are too many holes. We have already talked about that. In my first reading speech I talked about the ability to avoid paying tax through continual gifting and through gifting from one entity to another. One person I had an email from outlined how easy it would be to launder money. 
I suspect that the vast majority of people who are going to take advantage of this legislation are good law-abiding New Zealand citizens. I suspect that the vast majority of them are going to undertake a gifting programme because they can. But there will be elements—and the Minister of Revenue knows this—of the business society who will take advantage of this legislation and who are just waiting for it to come through to say: “Now is my opportunity.” They will grab that opportunity with both hands and there will be tax avoidance as part of that. Even the Trustees Association said that it believed that a significant number of trusts had not met legal requirements. 
JAMI-LEE ROSS (National—Botany) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 66 
New Zealand National 57; ACT New Zealand 5; Maori Party 3; United Future 1. 
Noes 53 
New Zealand Labour 42; Green Party 9; Progressive 1; Independent: Carter C. 
Motion agreed to. 
The result corrected after originally being announced as Ayes 66 Noes 54. 
The question was put that the amendments set out on Supplementary Order Paper 254 in the name of the Hon Peter Dunne to Part 3 be agreed to. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 3 as amended be agreed to. 
Ayes 66 
New Zealand National 57; ACT New Zealand 5; Maori Party 3; United Future 1. 
Noes 53 
New Zealand Labour 42; Green Party 9; Progressive 1; Independent: Carter C. 
Part 3 as amended agreed to. 
The result corrected after originally being announced as Ayes 66 Noes 54. 
Schedule agreed to.  
Clause 1 agreed to.  
Clause 2 Commencement 
The question was put that the following amendment in the name of the Hon Peter Dunne to the proposed amendments set out on Supplementary Order Paper 254 in his name to clause 2 be agreed to: 
to omit subclause (7BB) and substitute the following subclause: 
(7BB) Sections 3BB 4D 7DB 7DC 7DD 7DE 7DF 12BB and 79BB are treated as coming into force on 4 September 2010. 
A party vote was called for on the question  
That the amendment to the amendments be agreed to. 
Ayes 66 
New Zealand National 57; ACT New Zealand 5; Maori Party 3; United Future 1. 
Noes 53 
New Zealand Labour 42; Green Party 9; Progressive 1; Independent: Carter C. 
Amendment to the amendments agreed to. 
The result corrected after originally being announced as Ayes 66 Noes 54. 
The question was put that the amendments as amended set out on Supplementary Order Paper 254 in the name of the Hon Peter Dunne to clause 2 be agreed to. 
CATHERINE DELAHUNTY (Green) 
: 
 I raise a point of order Mr Chairperson. I have just been informed that we are not casting their vote so I am not voting. 
The CHAIRPERSON (H V Ross Robertson) 
: Can the member be clear: is that for the Mana party or the Green Party? 
CATHERINE DELAHUNTY 
: The Mana party. 
The CHAIRPERSON (H V Ross Robertson) 
: We have had a number of votes for the Mana party. Are all the other votes in order? 
CATHERINE DELAHUNTY 
: No they are not. Could you just delete those votes. I have just been informed we are not voting for Mana at this time. 
The CHAIRPERSON (H V Ross Robertson) 
: So all those votes that were given for Mana previously are to be deleted? 
CATHERINE DELAHUNTY 
: Thank you yes. 
The CHAIRPERSON (H V Ross Robertson) 
: The member has to seek leave for that to happen. 
CATHERINE DELAHUNTY 
: I seek leave for the votes posted for the Mana Party to be removed. We are not voting on its behalf at this time. 
The CHAIRPERSON (H V Ross Robertson) 
: Is there any objection to that course of action being taken? There is none. 
A party vote was called for on the question  
That the amendments as amended be agreed to. 
Ayes 66 
New Zealand National 57; ACT New Zealand 5; Maori Party 3; United Future 1. 
Noes 53 
New Zealand Labour 42; Green Party 9; Progressive 1; Independent: Carter C. 
Amendments as amended agreed to. 
The CHAIRPERSON (H V Ross Robertson) 
: The question now is that clause 2 as amended stand part. 
Hon Lianne Dalziel 
: Can I take a call on clause 2? 
The CHAIRPERSON (H V Ross Robertson) 
: Technically when the vote was called for clauses 1 and 2— 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I raise a point of order Mr Chairperson. I just make a query as this is a matter for the Committee. You have put amendments to clause 2 have you not? So my only query is whether we have actually commenced voting on clause 2. 
The CHAIRPERSON (H V Ross Robertson) 
: We actually did vote on the Minister’s amendments as amended to clause 2 set out on Supplementary Order Paper 254 so because we have already voted on the amendments it means we are unfortunately unable to go back to clause 2. We have already voted on the amendments. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I raise a point of order Mr Chairperson. I felt that you had sought the assistance of the Committee to deal with what is a difficult situation. I listened very carefully to the Chair and clause 2 was not called. If clauses 1 and 2 had both been called I would have taken the call then. In fact I leaned over to the junior Opposition whip and I asked when clause 2 would be called. I really felt that your asking the Committee whether anyone objected to my taking a brief call on clause 2 under these circumstances would be useful. I do not think there is any point in recalling the Speaker back for this if we can resolve it as a Committee. 
The CHAIRPERSON (H V Ross Robertson) 
: I accept what the member says and I am prepared to ask the Committee to let the member have a call. Is there any objection to that course of action being taken? There is none. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I shall be mercifully brief as a result of the indulgence of the Committee. I wanted to take a call on clause 2 of the Taxation (Tax Administration and Remedial Matters) Bill because it is of course the commencement clause. There are several commencement dates. They traverse all the different elements of this particular bill. 
The reason why I wanted to raise this clause in the Committee of the whole House is there is a significant discussion in the regulatory impact statement about the trust law concerns that arise from this change to the law. This is the issue that I think is particularly relevant to the commencement dates that have been chosen. “The Law Commission is currently undertaking a review of trust law in New Zealand and is expected to release an issues paper shortly. Officials have met with the Law Commission to discuss concerns and will continue to follow the Commission’s progress. The review will broadly consider the various uses of trusts where legal ownership of property is transferred to a trust but control and enjoyment of that property is retained. New forms of regulation such as a central trust register and the compulsory filing of annual trust accounts are among the ideas that have been raised for reform. Such reforms would help deal with information concerns that may arise as a result of the repeal of gift duty. The Law Commission’s work is ongoing and may continue for some time.” 
The point I wanted to make is that given that work is being undertaken to address a number of the concerns we have raised about the exposure the Government allows by abolishing the gift duty for it to do so prior to the completion of this work and the work of a number of departments is I think more than unfortunate. 
The CHAIRPERSON (H V Ross Robertson) 
: Thank you for that and thank you for the Committee’s indulgence. 
A party vote was called for on the question  
That clause 2 as amended be agreed to. 
Ayes 66 
New Zealand National 57; ACT New Zealand 5; Maori Party 3; United Future 1. 
Noes 53 
New Zealand Labour 42; Green Party 9; Progressive 1; Independent: Carter C. 
Clause 2 as amended agreed to. 
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Taxation (Tax Administration and Remedial Matters) Bill be now read a third time 
. The bill before us is about simplifying the tax system so that it works more efficiently and operates in a way that reduces compliance costs for New Zealanders thereby providing an environment that supports growth. These are obviously matters of particular interest at a time of global economic uncertainty and it is pleasing that a large number of the measures in the bill were welcomed by members on all sides of the Chamber during the Committee stage. 
One prominent feature of this bill is the proposed abolition from 1 October of this year of gift duty. It is fair to say that that measure did not receive a universal welcome from all members of the Committee and it was probably the cause of the most vigorous debate on this legislation during that stage. In my view however it is right that gift duty which has long since ceased to fulfil its function and instead imposes unjustifiable compliance costs should be relegated to history. It has been around since 1885 and has been largely ineffective in recent years in that it raises barely more than the revenue it costs to operate the system while imposing significant compliance costs on taxpayers. Concerns about the matter can easily be addressed by existing social and other legislation administered by other Government agencies. The review that preceded the decision to abolish gift duty was initially a review of the threshold at which it applied and it became obvious during that review process that there was little point in adjusting the threshold and that the tax was so ineffectual that we should remove it altogether and so it has come to be. 
Although much of the attention during the Committee stage focused on the abolition of gift duty it is worth reminding members that there are a number of other important aspects of this legislation. One such significant proposal will help make our Public Service more efficient. Changes to the secrecy and information-sharing provisions in the tax administration rules will bring the Public Service more into line with today’s customer service expectations and help improve efficiency across the Public Service. The present secrecy rules are too restrictive and do not for instance allow a non-English speaker or someone who has hearing difficulties to have a relative or a friend helping them even if they have the taxpayer’s permission. Clearly a dose of common sense is required. 
The information-sharing amendments in this bill will result in improvements in service provision and accuracy efficiency—by eliminating duplication of effort—and the detection and prevention of fraud. These changes will result in a more efficient Public Service providing services that are more tailored to the customer’s needs. 
The bill also includes a number of proposed changes to the rules on the tax disputes process which complement major changes made by the Inland Revenue Department to the way in which it currently administers the tax disputes process. Our tax system relies on voluntary compliance and it is therefore appropriate that disputes which inevitably arise are resolved quickly and efficiently for both parties. 
The bill also includes a number of matters relating to the recent Canterbury earthquakes. The most significant of these is the introduction of roll-over relief for depreciation recovery income. This will apply to cases where an asset is replaced and the insurance or compensation would otherwise have given rise to such income. The timing of income from the proceeds of business interruption insurance is also being changed with effect from 4 September 2010. The bill also proposes to relieve interest charged on overdue tax for some overseas workers in New Zealand who came here to assist following the earthquakes. These workers have unexpected tax to pay as a result of their stays in New Zealand being longer than anticipated. The Government wants to encourage productive investment in Canterbury and these measures will help to achieve that. Officials are still considering further earthquake-related tax issues and they will be brought to the attention of the House as and when it is appropriate. 
In addition this bill reduces tax for non-residents investing in New Zealand through New Zealand portfolio investment entities. There was some rather technical discussion in the early part of the Committee stage about these particular provisions. I should point out that this is an important set of reforms which is designed to assist New Zealand to potentially become a hub for the investment of international funds. By improving efficiency and removing undue compliance costs this bill helps create an environment that supports growth while maintaining the integrity of our tax system. 
It is significant legislation and substantial effort has been put into it by officials and drafters to get it to this point. I also acknowledge the Finance and Expenditure Committee for its thorough consideration of the bill for its good work and for the recommendations that it has brought forward which have been adopted. I am very pleased to commend the Taxation (Tax Administration and Remedial Matters) Bill to the House. 
STUART NASH (Labour) 
: 
 As the Minister of Revenue said there is some very good legislation in the Taxation (Tax Administration and Remedial Matters) Bill. The Finance and Expenditure Committee went through it with a fine-tooth comb and on nearly every single point we came to agreement and consensus and we agreed that this is fantastic legislation. This bill as it stands reaches to about 130 pages and on about 129 ½ of these pages we were in full agreement but there were two lines in this bill that we did not agree on and those were lines at the very end of this bill in clause 110 of 110 clauses. Those two lines read: “No gift duty is payable under the Estate and Gift Duties Act 1968 in relation to a gift made on or after 1 October 2011.” 
That is the shame of this bill. Labour will not be supporting this bill because of those two lines. We believe that the abolition of gift duty is not a good step for New Zealand or the New Zealand tax system. As the Minister mentioned gift duty has been around since 1885. This measure was part of the Estate and Gift Duties Act. Estate duty was abolished about 30 years ago but gift duty was left intact for a very good reason and that is because legislators understood that gift duties stopped avoidance behaviour which we are very very concerned about. 
As we know in the last few Budgets under Labour and National the Inland Revenue Department has been given significant amounts of money to chase those who avoid tax. I think in excess of $100 million has been provided to chase those who are avoiding tax. As officials of the Inland Revenue Department will know this bill will in fact make it easier for certain sections of our society to avoid tax and that $100 million will have to be spread a lot wider as the department seeks to find a lot of avoidance activity that will take place. 
Let me give members an example. There are 325 fraud cases being looked at by the Inland Revenue Department at the moment and four of those cases total $420 million—just four of them. We have received advice that in fact if the House abolishes gift duty there will be a lot more of this money-go-round as it will make it incredibly easy. In fact it will drop any barrier to the movement of money between legal entities trusts companies and whatever. This just adds to the overall complexity that the Inland Revenue Department faces in terms of chasing those who defraud the tax system or who engage in avoidance behaviour. 
I would like—and I very rarely do this—to read out a good chunk of Labour’s minority report on this bill. It is not very long but it is very important. We said: “New Zealand Labour … believe the analysis upon which the gift duty abolition proposal is based is fundamentally flawed because it does not adequately take into account the full range of potential tax avoidance opportunities.” We grilled the Inland Revenue Department on this issue. In my short brief experience in this House and in the Finance and Expenditure Committee Inland Revenue Department officials are very very good at what they do. They answer questions brilliantly but I got the very strong impression that they were operating under orders saying: “This is what the Minister wants and this is what this Government wants; therefore do it. Ram it through.” It was probably one of the very few times when I was not convinced that the Inland Revenue Department was happy with the legislation going through. 
As mentioned there are 130 pages in the legislation and 129 pages were actually very good. We all agreed about it. It makes the tax system more efficient as the Minister outlined. The Minister himself outlined some of the measures we all agreed on—they are great but the abolition of gift duty is not one of those. We also said: “no sensitivity analysis has been provided. No options analysis has been provided. The policy process would not meet the standards expected under a thorough Regulatory Impact Statement.” This bill gets rid of a tax that has been there for well over 100 years. We expected a lot more. We said we were “concerned that the analysis does not address any of the social equity concerns raised by a number of submitters and Labour members on the committee. [We] believe in the first instance that any legislation proposing the abolition of gift duty should [at least] be delayed until the Law Commission’s review of trust law is complete.” 
We made this clear; we asked the officials why they could not hold off. We asked them to just hold off and then if the Law Commission came out with a ruling a strong view or a strong recommendation on trust law they could bring it back to the Finance and Expenditure Committee and we would consider it. We would consider it; we understand the compliance costs related to administering this tax. But they would not hear of that. They would not hear of that because the Minister Peter Dunne made a deal with National and National accepted that deal as part of his support. It will be bad law. 
David Bennett 
: Give it up Stuart. 
STUART NASH 
: It has resulted in bad inequitable law and Mr Bennett knows that. I bet that Mr Bennett on 2 October or maybe midnight of 1 October or midnight on 31 September will be going straight to his tax accountant to say: “Anything I have not gifted into any of my trusts move them across now.” He may have to stand in line because I suspect there is a whole lot of people lining up at the moment as was said to me by a trust lawyer in Napier. A trust lawyer in Napier who makes a lot of money out of this sort of stuff said to me that he has major concerns about this provision. He has major concerns about this—about the equity. An accountant said to me that this is not good law—this is not good law. In fact the only person who believes that this is good law is Peter Dunne. I do not know whether John Key’s Government was hoodwinked or what happened. 
Hon Tau Henare 
: Why are you worried? 
STUART NASH 
: I am worried because this legislation will screw a hell of a lot of New Zealanders. Like a lot of tax legislation put through by that member’s party it is not good for 90 percent of New Zealanders. His party is being consistent this is consistent tax legislation because it favours the wealthy few at the risk of the great many. New Zealand Labour members believe in a fair tax regime that promotes social and fiscal— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I advise the House that politics as we all know is the art of the possible. The possible we will explore today is good order. There are 402 Standing Orders in this place. They grant us good grace and good order and an opportunity for all members to make a commanding contribution. 
STUART NASH 
: The New Zealand Institute of Chartered Accountants submitted that although it welcomed the abolition of gift duty in its view there are “a number of tax avoidance opportunities that may arise in the absence of gift duty”. The institute went on to list five. Part of the reason why not much money was collected under gift duty is that there is ignorance of the law. Let me give members one example. I have a friend who is a wealthy individual and we were talking about how hard it is for young people to buy houses. He said he helped both of his children to buy houses; he gave them $100000 each. I said: “You gave them $100000 each?” and he said “I gave them $100000 each.” I asked whether he paid gift duty on that and he said no he did not pay any gift duty on that. I asked whether he knew that any gift over $27500 attracted gift duty. He said: “Oh shivers. No I didn’t know that.” But ignorance is no defence—ignorance is no defence. 
What we should have done in this House is wait until the Law Commission’s report came out done a thorough study on the impacts of the abolition of gift duty and then made an informed decision. This is a rushed decision which the Inland Revenue Department knows will have significant impact upon its ability to chase those who engage in avoidance and fraudulent behaviour. This is not good legislation. Labour will not back it. We think this is rushed and we think this is legislation at its very worst. The abolition of gift duty should not go ahead. Thank you very much. 
AMY ADAMS (National—Selwyn) 
: 
 I will take just a brief call tonight on the Taxation (Tax Administration and Remedial Matters) Bill third reading. Before I touch on gift duty which is obviously a pretty contentious issue in this debate I will reflect on some of the other things this bill does because people listening to the debate this afternoon could be forgiven for thinking that that was pretty much all that was in the bill. 
I acknowledge the comments of the previous speaker Stuart Nash who made the point that there are a lot of good tax changes in this bill and I think they deserve to be put on record although I know that the Minister of Revenue referred to them of course. One of the key changes we looked at was the information-sharing powers that the Inland Revenue Department holds and the restrictions on its ability to do that. The Finance and Expenditure Committee certainly came to the view that the law was overly restrictive the way it was. We have come up with what I think is a good framework going forward to enable sensible sharing of information between the department and other Government agencies. As a member of the Finance and Expenditure Committee I certainly look forward to reviewing how that change operates in the years to come if I am lucky enough to stay on that committee. 
The bill improves the tax disputes process tidies up tax pooling rules and deals with some overtaxation of non-resident investors in portfolio investment entities ensuring effectively that people are taxed in broadly the same manner that they would be taxed if they invested directly in those domestic assets. The Minister also mentioned tonight in his contribution the further Supplementary Order Papers we have seen that tidy up some other tax issues relating to insurance payouts and the rebuild in Canterbury. Of course this House is always very supportive of any aid in that direction. 
Just coming back to gift duty very briefly I touch on the fact that although it has been well traversed that this is a tax that raises very little in revenue terms—$1 million gross; half a million dollars or less net and something like 98 percent of all compliance that goes through the department in relation to this results in no tax payable—it is not unfair to say that there are issues that have to be looked at in relation to how people can divest themselves of assets and ensure that that is not done in an inappropriate way and that it is not done to defeat creditors. But I think the point that has been missed in the debate so far is that this is tax legislation and tax law is not the place to ensure that the legislation is correct around asset transfers and the protection of creditors. Those provisions do exist and the contentions from Labour members that suggest that now it will be all on for man and beast and everyone can pass assets off to anyone they like and avoid anything with impunity are frankly wrong. There are significant powers already in the insolvency legislation and in wider legislation to ensure that gifts that are made solely with the purpose of defeating a creditor or solely with the purpose of entitling oneself to more Government assistance are able to be set aside. 
If the ongoing monitoring of the position post the abolition of gift duty suggests that more work is needed then certainly we will be very happy to look at that. But as a matter of tax law this tax is defunct it is obsolete and all it does is create an industry of compliance with tax lawyers and accountants. It serves no net purpose to the Government’s fiscal books and its time has come. I think the Minister was absolutely right when he said that there is no rational reason for keeping it as a tax law any more. 
Can I also touch on the fact that under existing structures assets can be divested instantaneously. A debt back is created and then that debt back goes through a process of forgiveness over a period of years at $27000 a year per person or $54000 a year per couple. The asset itself goes on day one with or without gift duty. If there is concern about protection of specific assets under current laws that asset—with gift duty without any penalty or payment—can be divested immediately with all capital gained from that date. The only asset that remains as I say is a financial one which at day one is reduced usually by $54000 across a couple and that amount reduces in time. 
To suggest that the picture will change significantly as one might have thought from listening to this debate I think is misleading. I think this is the right step as a matter of tax reform. We will continue to monitor it to see how it evolves but my guess is that the change will not be anything like as significant in terms of asset divestment and avoidance as has been suggested in this debate. The biggest change that we will see is the people of New Zealand no longer having to pay out $70 million to lawyers and accountants to do something that has no public good. For that reason I am very happy to commend the bill. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 There are a number of features of the Taxation (Tax Administration and Remedial Matters) Bill that fully meet the intent of something that is described as a tax administration and remedial matters bill. What Amy Adams talked about was not one of them. The abolition of gift duty does not fit within the ordinary definition of tax administration and remedial matters. That has been the Opposition’s No. 1 objection to the use of this particular vehicle for the abolition of gift duty. It is a policy matter of some substance and deserves to be dealt with by a bill that actually addresses policy issues rather than it simply being seen as a matter of tax administration. But there is a reason why this Government has chosen it as a matter of tax administration and I will come to that shortly. 
As members of this House will know I am a great fan of something known as a regulatory impact statement. I sometimes feel like I am the only person who reads them but on this occasion I know that is not the case because every Labour member on the Finance and Expenditure Committee read the regulatory impact statement and they were unimpressed. They were so unimpressed that they actually challenged the content of the regulatory impact statement in their report back to the House. I think that is a significant issue and something this House should take very seriously. If we cannot rely on the regulatory impact statement to provide us with the basis for quality decision-making then heaven help us because actually the people of New Zealand put us here to do something a little bit more than a once-over-lightly and the regulatory impact statement is supposed to offer slightly better than the options offered in this case. 
Let us look at the options but first I should make this point to the House because I think members just do not get what the regulatory impact statement is for. It is supposed to identify the mischief that is to be remedied by the particular proposal that the Government has adopted. It then should identify a range of options that the Government could adopt choosing the least regulatory intervention all the way through to a major regulatory intervention. All of those options would be put on the table and then there would be a cost-benefit analysis a risk-opportunity analysis—all of that work would be done and that is where the regulatory impact comes in. There would also be consultation with major players. Well the consultation on this particular one has been rather an eye-opener for me as well. 
Let us look at the options that the regulatory impact statement put on the table. The first option was to narrow the scope of gift duty. It looked at the people whom the previous speaker was talking about—the family trusts the individuals and the closely held companies. It then looked at the concerns around income tax minimisation social assistance targeting and defeating creditors which largely relate to gifts between those individuals and therefore looked at limiting the rules around gift duty to those particular individuals. 
The second option was to raise the threshold at which gift duty applies noting as the regulatory impact statement did that the current threshold of $27000 per annum for the gifting programme had been fixed in 1984 and had not been revised since then. There was a view that it had not kept up to date with inflation. The regulatory impact statement identified that if the threshold had been adjusted it would be $78291 but it said that that would “dilute gift duty’s protective effect against these forms of targeted gifting by speeding up the rate at which assets may be transferred.” But actually getting rid of gift duty does not just speed it up; it completes the process in one fell hit. So I do not know why that was a good argument but I am sure that somebody in the bowels of whatever department wrote the paper will understand why that was the case. 
Option three was to remove the need to file gift statements for non-liable gifts. I found this absolutely fascinating because we have heard a lot of people saying that about 200000 gift statements have to be filed each year. Well that is quite interesting because the regulatory impact statement states that “The most significant part of compliance costs is not completion of gift statements—rather it is the annual drawing up of deeds of forgiveness which require engagement with a legal practitioner.” That is it. So all of this talk we have heard about the huge cost to the Government of managing the compliance cost in relation to the completion of gift statements does not stack up against the Government’s own regulatory impact analysis. 
Option four is to move to electronic systems. Well I was gobsmacked to find out that in fact they cannot be filed by electronic means at the moment. I do not understand why. It is to do with the original deed having to be filed along with the gift duty statement—which is then photocopied and returned by post. I am sure we could do better than that. I do not know why it was ruled out. The regulatory impact statement says “The financial outlay required to upgrade systems is expected to cost within the range of $1-7 million.” Within the range of $1 million to $7 million? One would think Treasury could come up with something slightly better. It sounds like the good old days when Labour was in Government and we got quotes from the Ministry of Social Development as to how much it would cost to upgrade SWIFT for a minor technical adjustment to a benefit. It was always in the millions and millions of dollars. But $1 million to $7 million to make it possible for the Inland Revenue Department to have a document scanned as an original document and signed off by somebody who would give it the status that it required? I cannot believe it. This document says a lot. 
The last option of course—they have left us only one option the one they wanted right from the start—is to repeal gift duty. The thing I find fascinating is something the previous speaker drew attention to. She said we are saving the private sector $70 million. Is that not wonderful? We are saving people $70 million by getting rid of gift duty. Well do members know how they came up with that figure? It was on the basis that the average cost quoted by practitioners for drawing up an annual deed of forgiveness is $285 plus GST. So what she meant to say is we are saving 225000 people $285 plus GST each so that they can have the benefit of not paying tax on what they are gifting to somebody else in order to divest themselves of their assets. That is what this is about. The Government does not like hearing this but this is about its priority. It is prioritising the same people it prioritised in the tax cuts. It said that 10 percent of New Zealanders would get the bulk of the benefit of the tax cuts and that is exactly what it is doing with this measure. 
That is what draws me to paragraph 57 in the regulatory impact statement: “The number one concern related to the repeal of gift duty from an income tax perspective has until very recently been the ability of individuals to reduce their taxable income by transferring their income-generating assets to a trust. High-earning individuals could transfer assets such as shares or interest-bearing savings to a trust so that the associated income accrues to the trustee. This would allow the income to be taxed at the trustee tax rate instead of at the top marginal personal tax rate.” Now listen to this: “Up until 1 October 2010 this would offer a tax saving of 5%. However alignment of the trustee and top personal tax rate from 1 October 2010 will remove this tax advantage.” But that is the whole point. The Government reduced the top tax rate for its mates and now it is giving them the total benefit by removing the gift duty as well. Those members are saying that it makes no odds because of a change they have made to the tax system favouring the highest-income earners in this country over and above those who struggle to make ends meet every single week because of the price of milk because of the price of fuel and because of the price of their groceries which just go up and up and up. 
This debate says a lot about this Government’s priorities and we know exactly where this will take us as we enter election time because the people of New Zealand will know perfectly well where that party’s priorities lie and it certainly is not with average New Zealand with every New Zealander who sees themselves disadvantaged once more by this Government. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I rise to speak on the Taxation (Tax Administration and Remedial Matters) Bill. Tax is the price we pay to live in a decent society. Tax is how we afford public hospitals so that when people get sick and have heart attacks they have a public health system that will look after them. That is why we pay our taxes. We pay our taxes so that we have a decent education system so that our kids—and all kids wherever they are from in our country—can access decent education. That is why it is important that we all pay our taxes and that we all pay them honestly and fairly. That is why the symbols around tax are very very important. The Minister of Revenue earlier dismissed this. He said that this is merely a battle about symbols. Actually it is not just a battle about symbols. But even if it was a battle about symbols symbols in tax matter. The reason they matter is that if everyone thinks that everyone else is avoiding their tax then they think it is OK to avoid paying their tax too. But if everyone thinks that pretty much everyone else is paying their fair share then it is very likely that they will pay their fair share as well. That is what is important about the symbols around our tax system. 
Unfortunately since the new-right revolution of the 1980s and the embrace of the “greed is good” culture we have now had the development of widespread tax avoidance and a culture of widespread tax avoidance in New Zealand. We find it from the very top all the way through but particularly amongst higher-income earners. The reason why I say that we find tax avoidance at the very top is that the banks were caught avoiding paying around $2 billion of tax. The High Court found that the banks had been illegally and unlawfully avoiding paying tax and then eventually the banks were forced to repay around $2 billion in tax that they owed to the rest of us because they had been unlawfully avoiding it. None of those people were prosecuted. We have created the problem whereby tax avoidance has become widespread. There was a case recently where someone was caught avoiding paying a very large amount of tax and the punishment was simply home detention. The banks themselves did not receive any punishment whatsoever. No bank executives were put in jail or anything. 
We have a problem with tax avoidance in our country and we have a problem with the culture around tax avoidance. That is why the gift duty issue matters so much. Aside from the content of it it is also about the symbolism of it and about whether everyone is paying their tax. Gift duty acts as a buttress to the tax system. That is one of its purposes. One of the key ways to avoid paying tax that has emerged in New Zealand is through the use of trusts. Income-generating assets have been moved into trusts so that they are taxed at the trustee rate rather than taxed at the marginal tax rate. Gift duty has effectively acted as a dam against large amounts of assets being transferred into trusts. It means that the asset flow going into trusts has been slowed down and that assets can be gifted into trusts at $27000 per year rather than being gifted all at once. The gift duty rules although not appearing to do a huge amount in terms of generating tax have been acting as a large dam preventing an even greater amount of assets from flowing directly into trusts and being lost from view once and for all. 
This has been of major benefit to the tax system. It has generated huge amounts of information about what is going on in terms of assets and attempts to hide income-generating assets and other assets in trusts and that has been very useful. That is why from the beginning of this debate from the first reading the Green Party has opposed this bill. It has opposed it because of the abolition of gift duty. We are pleased that Labour has seen the light. We wish only that National had seen the light and understands the significance of what it is doing. I suspect unfortunately that maybe National does realise what it is doing or maybe it does not. But one of the effects of this bill will be that the dam will be removed. The dam that is currently operating to hold back large amounts of assets and to control their flow into trusts will be removed. A huge flow of assets will go into trusts and from there those assets will be lost from sight to most of us including the Inland Revenue Department. 
One of the arguments that the Government puts up as to why this no longer matters is the equalisation of income tax rates and the trustee rate. The only thing is that these rates will not stay the same for ever. The current Government has equalised these rates but there is no guarantee that a future Government might not think that New Zealand having a tax system that is wildly out of skew with the tax system of most other Western countries and having a very low top marginal tax rate—and I remind the House that in the UK it is 50 percent—is how it should stay. New Zealand will not have a very low top marginal tax rate for ever. It has not been the case in the past and I am sure that in the future we will have a higher marginal tax rate than we have today. At that point once again a gap will open up between the trustee rate and the top marginal tax rate. It is for this reason that wealthy individuals in New Zealand will be cheering with joy when this Parliament passes this bill because they will be free to move all of their income-generating assets into trusts in the full knowledge that were a future Government to increase the top marginal tax rate again their assets will be safe. Their assets will be safe from their fair share of tax in New Zealand. 
In the regulatory impact statement the Inland Revenue Department unfortunately did not talk about this option because talking about future policy changes with a change in Government was not one of the options the department was given the responsibility to talk about. But the reality is that it is a very real possibility in New Zealand that in the future we will have a higher top marginal tax rate than the trustee rate. So this bill will give a lot of people who have very large assets the opportunity to hide them away in trusts so that they do not get caught in the future. It is a very sad day because it fundamentally undermines fairness in our tax system. Once we undermine fairness in the tax system everybody thinks it is OK to avoid paying their taxes. They see the banks avoid paying $2 billion in taxes but nobody gets punished and nobody goes to court. If someone illegally stole $2 billion from the Reserve Bank would it be the case that no one would be prosecuted or get caught? Instead the banks’ executives and their advisers—and PricewaterhouseCoopers was in on this—unlawfully avoided paying their tax and nobody went to court. Nobody personally—none of the directors or the executives—ended up in court. They all got away with it. All they had to do was pay back some of the money. 
The problem with laws like this is that they undermine the integrity of the tax system by reinforcing the idea that the tax system has one rule for the wealthy—as we are seeing tonight with a special rule for the wealthy so that they can hide their assets in trusts—and one rule for wage and salary earners. Wage and salary earners have to pay their taxes; it is very hard to avoid them. That is why we have opposed this bill from the beginning. We believe that the tax system needs to be fair and it needs to appear to be fair. Although there are many good aspects about this bill—and I think there is probably cross-party support for the large majority of this bill—it is fundamentally undermining some of the essential fairness elements of the tax system with these changes around gift duty. 
I say to the Minister that symbols do matter. This bill is about more than symbols but symbols do matter. The Government is saying today that just as all its other tax changes have one single direction which is to move money towards the wealthy this bill we are debating tonight has exactly the same direction to it. When we look at each of the changes whether it is the change to the top tax rate to GST or to gift duty we see that each of them might be a relatively small amount—though the tax changes were not small and 40 percent of it went to the top decile—but when we put them all together they all have the same direction of movement which is to move wealth towards those at the top end. 
I tell members that if we keep adding to inequality in our country through the tax system through the wages system and through every other mechanism then we will end up with a society that we do not wish to live in. If members wonder why people might not be comfortable with what is going on in Aotearoa New Zealand then they should look at inequality and look at what bills like this are doing to inequality. They are adding to inequality which will only make it more expensive further down the track with regard to health education justice the courts the police and crime because inequality produces more costs on all of those things. Thank you. 
Hon JOHN BOSCAWEN (Leader—ACT) 
: 
 It is a pleasure to stand and take a call on the Taxation (Tax Administration and Remedial Matters) Bill. As we heard from Mr Nash earlier most of the parts of this bill are not contentious. They are accepted by most parties in the House and by both sides of the House. Mr Nash used his speaking opportunity to focus on the abolition of gift duty. We have just heard an argument from Mr Norman that the abolition of gift duty is wrong. He said that one of the reasons we have gift duty is to restrict the transfer of assets into trusts away from an individual taxpayer and that it is done for the purpose of reducing one’s personal income tax. But interestingly he acknowledged that simply setting the top marginal tax rate which is currently 33c at the same rate as the rate for trusts negated the benefit of shifting assets into trusts. He tried to argue that the setting of those two rates at the same level would be a temporary measure until such time as a future Labour Government increased the top marginal tax rate. 
I suggest to Mr Norman that he is absolutely wrong. He talked about the reality as being that at some stage in the future that top tax rate will rise. My advice to the people of New Zealand is not to support any political party that would want to do that because as we have heard when we have a difference between those two rates it leads to tax planning and tax avoidance. If we actually wanted to grow the economy reduce tax avoidance and improve the incentives to work hard and save we would do exactly the opposite. We would be lowering tax rates—we would actually lower the tax rates. If there is one thing that the ACT Party stands for it is reducing wasteful Government expenditure and lowering taxes and letting the people of New Zealand retain more of the income they earn. 
It is interesting that Mr Norman talked about a top tax rate of 50 percent in the United Kingdom. It was only last week that Mr Norman was complaining about the social problems in the United Kingdom. We know that the United Kingdom is broke. We know that most of the major developed countries in Europe are broke. Why are they broke? Because they have huge amounts of wasteful Government expenditure they have high marginal tax rates and they provide a disincentive for people to work to invest and to get on. I suggest that Mr Norman look at countries in Asia—the countries in Asia that are growing—and look at the countries that are actually growing during this worldwide recession. What do we see in Asia? We see low rates of tax. I suggest that if the Green Party had the interests of this country at heart it would be looking at how we reduce rates of tax reduce wasteful Government expenditure and provide an incentive for people to work hard and to keep more of what they earn. 
Mr Norman talked about the inequality. He talked about the so-called rich and the wage and salary earners. If Mr Norman was really concerned about wage and salary earners he would be looking at how we could reduce waste and reduce the top marginal tax rate. If we had a top marginal tax rate of no more than 20c in the dollar we would actually have the right incentives. 
The ACT Party will be supporting this bill and we encourage New Zealanders to give further thought to how we can reduce wasteful Government expenditure and lower tax rates. Thank you. 
DAVID BENNETT (National—Hamilton East) 
: 
 I will just follow on from the last speaker John Boscawen who I think made some very good points about the nature of the Taxation (Tax Administration and Remedial Matters) Bill and what it means for New Zealand’s economic performance. This bill is good for the New Zealand economy. It is good for New Zealand taxpayers it is good for the total tax take that New Zealand will get and it is good for making New Zealand businesses more competitive on the world stage. It is sad that Labour and the Green Party especially have to come and say no to good law in this House just because they want to keep a façade going in the public eye of their attack on those who are successful those who have something or those who have worked hard to make something of their lives and for this country. It is really sad that they cannot support good law that is simple that has all the bases ticked and that is in the best interests of New Zealand as a country going forward. They cannot support it because their ideology will not allow them to. That is very sad for New Zealand. The public out there sees through Labour and the Green Party and it realises that those parties do not actually have the best interests of New Zealanders at heart. They have only their own self-interest and what they can do during election campaigns. They try to divide and conquer a country by putting one person against another. They tell people to look over the fence be afraid of other people have fear of them and try to take what they have earned just so Labour can be in control and try to govern. Those tactics do not work any more. The world has moved on. The New Zealand public has moved on. It is time that Labour got out there and supported things that are in the best interests of New Zealand because there is no way that we can support an industry that costs $70 million in compliance costs. Why would one put $70 million worth of compliance costs on New Zealand businesses and individuals for no real benefit other than one’s political motives? It is a very sad day when Labour has to put politics above the people of New Zealand. Thank you. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Deputy Speaker. Kia ora tatou katoa. In talking to the Taxation (Tax Administration and Remedial Matters) Bill I think one of the components of candidate training that should be part of compulsory learning for all wannabe politicians should be to gain an understanding of the long list of acronyms that are sometimes bandied about in Parliament and in this Chamber. In this bill for example the SOP introduces new measures associated with RWT on trusts and beneficiaries QC and LAQC transition measures and ESCT in the context of employer superannuation contribution tax. I think members get the general gist by just reeling off some of those acronyms. Well today’s new word is PIEs—P-I-E-s. They are not the mince and cheese pies that Todd McClay associates himself with but are amendments relating to the treatment of non-resident investment in portfolio investment entities à la PIEs. 
Even the category “non-resident” is bizarre in a sense: it defines what people are not rather than what they are. It is like “non-Maori” which interprets a person’s identity as not being Maori but does not actually tell us anything about the unique identity of those non-Maori—of Irish American or French whakapapa. 
Currently if a foreign person invests directly in a foreign investment he or she pays no New Zealand tax. By making it more attractive for a foreign person to invest in managed funds it will support the managed funds industry in Aotearoa with the idea that it will lead to more jobs in providing back-office services for managed funds. Another benefit for other New Zealanders is that if we have a greater pool of funds under management we will get economies of scale. This makes it more attractive to foreign investors which ultimately makes it cheaper for investors in Aotearoa as well and for example some of these fund managers include AMP and AXA New Zealand. It is a case of what will be good for the foreign investor will ultimately be good for Aotearoa New Zealand as a whole. 
The Maori Party supports an economy of investment which leads to greater productivity and enhances well-being so in this sense we are pleased to support the Taxation (Tax Administration and Remedial Matters) Bill. I have to say pretty quickly that the Maori Party considers it necessary to carefully scrutinise and manage all foreign investments by non-residents in Aotearoa. That is about protecting and preserving what is ours—within our hands and within our land. It should go without saying that we support the majority of the amendments that concern further responses to the Canterbury earthquake and the affected taxpayers in the 2010 and 2011 tax returns. 
The major provisions allow for the roll-over of depreciation recovered to go into replacement assets. For example suppose a building had a historical cost of $3 million had been depreciated for tax purposes to $1 million and was insured for replacement at $5 million. If this building was destroyed by the Canterbury earthquake the owner would be up for a tax bill of about $600000 on the depreciation recovered of $2 million even though he or she would have no money with which to pay this tax. Such tax returns would represent a windfall gain for the Government from the earthquakes which in anyone’s books is pretty crazy. Basically the effect of the amendment means that people affected by the earthquake will not have to pay tax on depreciation as one would usually. I understand there are also write-off rules. It is proposed that the write-off rules for buildings be extended from those buildings written off by an event say an earthquake to include buildings that have been destroyed as a consequence of an event. 
The Maori Party supports the effective recovery of Christchurch and as such we support any changes to tax law that will help to facilitate this as a part of manaakitanga. We also wish to lift the economy of Aotearoa and support whanau. The Maori Party is happy to support this bill at its third reading. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 It has been interesting to listen to the speeches of a couple of the preceding speakers in this debate on the third reading of the Taxation (Tax Administration and Remedial Matters) Bill and to note comments from Mr Bennett about how this bill serves the best interests of New Zealand. I say to that member opposite that this bill serves the best interests of a tiny percentage of New Zealanders. 
Mr Boscawen from the ACT Party said that we needed to look to Asia where they have low tax rates. Well I say to that member opposite that we sat next to each other at the State luncheon for our retiring Governor-General today and I am happy to pay my taxes to help pay for that lunch. There are no free lunches. If we want to live in a responsible and decent society then paying our taxes is the price we pay for things like that and for a multitude of other things besides. If Mr Boscawen wants to swap the life that we have to go to work in a Chinese sweatshop pay low tax rates and earn $200 a month to produce Adidas T-shirts with All Blacks slogans on them then I say good luck to him—go to Shanghai or wherever. 
If we want to take that thinking to its ultimate analogy we need look no further than at what happened in the United States Congress but a couple of weeks ago where the Tea Party rump of the Republican Party forced a vote that said: “We will not support any tax increases on the billionaires of the United States but Mr President and those in Congress we want you to cut Medicare education spending and pensions.” What does that mean? It means that America has been through a financial downgrade as a result of that decision. That is where countries get to when they get into the mantra that says they should cut the taxes to the wealthy and impose the costs on the rest of society. 
We need only look at the comments in the paper only today from Warren Buffett America’s wealthiest man who said that he wants to pay more taxes and that he should pay more taxes. Or we can look at the commentary from Bernard Hickey last weekend. He said that we need a thriving middle class in New Zealand not a situation that has seen the wealthiest 1 percent increase their share of the wealth from 7 percent to around 14 percent in the last 20 years. That is the sort of direction we are heading in with this bill which does away with gift duty for the very wealthiest in our community. 
Part of the explanation for this bill was that gift duty raised only about $1 million a year and cost half that amount to administer. I say again to the Minister of Revenue that that is disingenuous because this policy was about stopping more avoidance and structuring. The very fact so much money is spent by people on gifting arrangements suggests that people are doing very well out of it. That is what the policy is about. That is why it is there. That is the reason it should stay in place. 
I commend my colleague Lianne Dalziel for her reading of the regulatory impact statement particularly paragraph 57 where the department noted that in fact until October last year there was a greater benefit from gift duty because the tax rates were a little higher. Of course removing that top tax rate has removed the tax advantage so ipso facto we should do away with gift duty. What a lovely logical sequence that is—to set up it for the fall. 
I will also point out to the House what the regulatory impact statement said in respect of some of the impacts—and Lianne Dalziel is right; members of the Labour Party do read the regulatory impact statements on bills like this one. The authors of the regulatory impact statement consulted all of the Government departments relevant to the repeal of gift duty. One of the commentaries came from the Ministry of Social Development which stated that if the change were to happen there could be some ramifications for some of the issues with residential care subsidies—that is if gift duty is repealed people will be able to transfer all their assets into a trust instantly. At the moment people have to stage it. They have do it by transferring $27000 a year. The ministry also notes that it has a provision where it can look at how people might make lump-sum payments. But here we are with the Ministry of Social Development needing to review its administration of financial means assessment if gift duty is repealed. So it is heralded in front of us that the Inland Revenue Department will save $400000 and what a great saving that is but there is one Government department stating that its cost structures are likely to rise as a result. 
The Ministry of Social Development went on to state that staff training would therefore be required around the operational impacts of the changes. There would also need to be complete land-title searches for properties where applicants had lived for a significant amount of time to determine whether the property has been gifted by the applicant. The ministry has noted that this will lead to increased operational costs so there we are. We are saying that we will save some money at the Inland Revenue Department but we are looking at the potential for extra costs at the Ministry of Social Development. And that was without any real analysis of what this change might mean in terms of what the State has to administer in respect of residential care where we have a carefully managed regime to ensure that people pay a fair component of the cost of residential care. Obviously these changes could impact upon that regime. 
The Ministry of Social Development also commented about entitlements to Working for Families tax credits an issue very dear to the Minister who introduced this bill and to the Government which wants to crack down we are told on those who might be rorting Working for Families tax credits where it is not appropriate. The ministry said that there is the potential for applicants to transfer income-earning assets out of their names in order to remove income associated with the asset from their taxable income. Again that is a consequence of this bill. It underlines the very premise that Labour has been talking about—this gift duty is there not for what it brings in but for what it prevents from happening in respect of further rorting of the tax base. 
There was further commentary from the Housing New Zealand Corporation. It was not seen as a big issue by the corporation because most of the people in State housing are not likely to be the beneficiaries of gifting arrangements but none the less there was seen to be some risk around that issue. The corporation said that it would be on the alert for those kinds of outcomes. Child support is another area in which it is believed that the State will have to keep a watchful eye because of the fact that gift duty arrangements will be removed by this bill. 
There are a number of consequences of this legislation and Labour has said explicitly that it is not an appropriate measure to be introducing. We need an equitable tax base most especially at this time. We need arrangements that underscore and underline that everybody pays their fair share. Gift duty has been an arrangement that simply said to people that it is there to try to ensure they do pay their fair share. It has not been a great revenue collector. It was actually pointed to after a former National Government removed estate duty in 1992 as part of a need for an ongoing protective mechanism one that was weakened with last year’s move on top tax rates. 
In summary Labour is saying very clearly that there are good elements to this bill—sensible progressive amendments to tax law that have come through the Finance and Expenditure Committee and that Labour has supported. But when it comes to gift duty we say that it is an important protective mechanism of the tax base that it deserves to stay in place and that it is there to ensure that equity prevails in the tax system. We need to ensure that equity is preserved not only to balance the amount of tax that people pay to ensure that the top end of town pays its share and that tax is paid not just by the lower end of town but also to provide a signal to people that we are all part of one community and one society. When we get signals being sent consistently—consistently— 
Chester Borrows 
: You should remember that. 
BRENDON BURNS 
: The member opposite who just intervened was asking just a few minutes ago: “Well those on the bottom end get assistance so why not the top end?”. The point is the equity of the arrangements. We must have a broad agreement that we are an equitable society. 
All of the international research is saying that New Zealand is in fact a much less equitable society than it was even 10 or 20 years ago. That puts at peril our very socio-economic base. When we chip away at it time and time again with tax measures like this we are putting at risk I think society itself. If people do not feel that they are getting a fair shake at things then there will be consequences from that. We are seeing this change come through at a time when we have seen in other countries some of the consequences where inequity has come to the point where people have taken to the streets. I think we actually have to acknowledge that those risks are there for New Zealand and every time we chip away at our tax base with measures like this—rewarding the top end of town when there is no real case for it—we put ourselves at risk. 
AARON GILMORE (National) 
: 
 It is a pleasure to stand and talk about some of the misinformation we have heard tonight on the Taxation (Tax Administration and Remedial Matters) Bill and respond to some of the comments. We have heard about Labour’s conspiracy theory its fear its hate and its envy. Its whole focus in a 127-page bill was on one page and that was the page with the provisions about gift duty. 
You see gift duty does not work for anybody but Labour is worried about it because it has the fear and envy that some people out there are ripping off the system. Well we have heard tonight that gift duty collects $400000 net in tax each year and we have heard some great conspiracy theories from the other side of the Chamber that the $70 million in compliance costs that is being paid to tax lawyers and accountants up and down the country each year may not be real. There are some fears about that. Well let us assume the cost was half of that or one-tenth of that. In any of those situations reducing costs to consumers is what this Government is all about and increasing efficiency for consumers is what this Government is about. 
Opposition members over there do not care about that. They care about creating some ideas of fear and conspiracy—whether in respect of money-laundering or anything else like that—and they seem to think that the existing legislative framework will not work. I think that is a bit of a worry. Those members are success haters and successful people do not like the Labour Party. I find that very strange indeed. 
Most of the stuff in this 127-page bill we are finishing off tonight is about portfolio investment entities (PIEs). We have land PIEs wholesale PIEs retail PIEs overseas foreign investment PIEs variable-rate PIEs and multi-rate PIEs. I have to say that we have not heard much about those tonight but we have heard a lot about one page in the 127-page bill: the issue around gift duty. Maybe Labour members ate lots of pies during the dinner break and that is why they are focused on one particular page. 
This bill is good for New Zealand. It reduces costs to mums and dads up and down the country. They will save $70 million in fees for just one page in this legislation. They will have the ability through the changes in the PIE rates here through their KiwiSaver accounts to save significant money through investments. But the prior member pointed out and believed that this bill had no benefits for mums and dads. Well I can tell Mr Burns that lots of mums and dads invest in PIEs and they will benefit significantly out of the tax changes in this bill despite the comments of that member. 
Finally the nature of the fear and envy that exists tells us a lot about what goes through the minds of the Labour members. They are worried about one paragraph in a 127-page bill. They are not worried about growth and reducing costs to taxpayers up and down the country; they are worried about one paragraph in a 127-page bill. That paragraph would probably put out of work a whole bunch of tax accountants and lawyers up and down the country. They make on average about $500000 a year and this bill will reduce compliance costs by $70 million a year. Those people could be gainfully employed doing something productive and enterprising in New Zealand and that is what we want to see—not them running around trying to cheat the taxpayers in relation to tax codes. 
All the fear and envy that those members have put forward is covered by other legislation and we heard from the Minister of Revenue earlier tonight that that is taken into account. So for the people listening out there who have heard those members the people who are worrying about the transfer of assets I say that it has all been taken into account—from money-laundering through to relationship property and everything in between. It is a shame and a misfortune that some of the comments from the Opposition tonight have been putting fear in the good people of New Zealand. I think that is a shame. 
This is a good bill. It will reduce the cost to New Zealand and it is another step in the right direction for a Government that is looking at reducing costs to mums and dads out there. 
RAYMOND HUO (Labour) 
: 
 I say to the National member Aaron Gilmore who has just resumed his seat that Labour believes in a fair tax regime that promotes social and fiscal equity. Gift duty is part of a progressive tax system that does not favour or disadvantage any member of society. In reply to Aaron Gilmore’s misinformed speech let us look at the title of this bill which is the Taxation (Tax Administration and Remedial Matters) Bill. Unfortunately I did not have the chance to take a call in the Committee stage on this particular clause because my learned colleagues Lianne Dalziel and Iain Lees-Galloway got the calls before me. With respect the title is rather misleading. It is wrong to use a bill that is supposedly for administration and remedial matters to push through the abolition of a tax. Legislation such as this should be reserved for technical changes and ought to be uncontroversial. 
As I said in my second reading speech in July apart from the provisions relating to gift duty Labour supports the contents of this bill and in the normal course of events would vote for it. However due to those concerns we have to vote against the entire bill. 
In the Committee stage Lianne Dalziel asked a very good question about portfolio investment entities (PIEs) and the Minister of Revenue gave a very good answer. I also had a question for the Minister but again I did not have an opportunity to ask it. The question was about the application dates. The rule applicable to category 2 PIEs is proposed to apply from the start of the 2012-13 income year but those applicable to category 1 PIEs are to apply from the date of Royal assent. The application date for category 1 PIE rules has been brought forward in response to submissions and according to the regulatory impact statement it will allow some funds to launch prior to April 2012. No explanation was given as to why a similar starting date is not proposed for the category 2 PIE rules. 
Much has been said about clause 110 namely the abolition of gift duty. So far all explanations and rationale shall I add from the Minister and the National MPs are focused on one single issue—that is gift duty imposes a high level of compliance costs on the private sector and no longer raises any significant revenue. I also said in the Committee stage that Minister Dunne got it wrong when he said that estate duties were abolished in 1992 but gift duties remained in place for revenue purposes. That statement actually begs the question. The Minister confirmed in his previous speeches that revenue from gift duty was about $1 million per annum but the cost to the Inland Revenue Department to administer it was about half a million dollars. On the other hand the Minister said the compliance costs on the private sector amounted to $70 million a year plus the law was too old and so on so it must go. I say to the Minister that gift duty was originally implemented to prevent people from circumventing the estate duty. Estate duty was abolished in 1992 but gift duty remained in place to prevent people from giving away large assets in order to avoid paying creditors obtaining access to Government benefits or avoiding tax liability. 
It has been argued that the abolition of gift duty will allow people to more easily hide assets in trusts to avoid creditors and tax and use this opportunity to obtain access to rest home subsidies for example. This was one of the major concerns in reviewing whether gift duty should be abolished. A number of lawyers and accountants made good quality submissions and to be fair they made submissions in good faith— 
Hon Maurice Williamson 
: No self-interest eh. 
RAYMOND HUO 
: It was not because they might lose the opportunity to earn fees as implied by the Minister of Revenue and the Minister who is interjecting. The submission from the New Zealand Institute of Chartered Accountants pointed out a number of tax-avoidance opportunities that may arise in the absence of gift duty including the ability to split income with people on lower incomes transferring income to loss-making entities and transferring assets in order to meet minimum thresholds under financial arrangement rules and foreign investment fund rules etc. Even the Inland Revenue Department officials cautioned in the regulatory impact statement that tax avoidance could increase in the absence of the duty. 
The Law Society and a number of other submitters raised a further concern that the abolition of gift duty would create problems for the enforcement of claims under a number of pieces of legislation such as the Property (Relationships) Act and the Family Protection Act. 
Labour believes that the analysis upon which the gift duty abolition proposal is based is fundamentally flawed because it does not adequately take into account the full range of potential tax-avoidance opportunities. We are also concerned that the analysis does not address any of the social equity issues. The Government also ignored advice from New Zealand Trustee Services that called for any changes to gift duty to be delayed until the Law Commission’s review of trust law has been completed. The Law Commission as I said in my second reading speech in July has embarked upon an in-depth review of trust law in New Zealand. The first issues paper was released in November 2010 and this year the Law Commission will release its fourth and final part of its review of trust law. I find it a bit odd that the Government has ignored the fact that a review of our trust law is under way and has still decided to go ahead and abolish gift duty which has existed for 125 years. 
The abolition of gift duty will have far-reaching consequences. The bill as introduced by Minister Dunne is relatively simple but the change will have ramifications in other areas of the law as I addressed earlier—for instance relationships and property creditor protection and insolvency. 
As I said at the very beginning of my contribution Labour believes in a fair tax regime that promotes social and fiscal equity. Gift duty is part of a progressive tax system that does not favour or disadvantage any member of society. Thank you. 
Dr RAJEN PRASAD (Labour) 
: 
 I also am pleased to take a call on the Taxation (Tax Administration and Remedial Matters) Bill. It has been interesting listening today to the Committee stage and the third reading of this bill. I want to reflect on some of the comments that have been made. I was interested in Trevor Mallard’s comments late in the afternoon when he said that there are some provisions that come before the House that reflect the essential differences we have with members opposite and this is certainly one of them. When we begin to look at fairness and equity then we can see why we strongly oppose some of the provisions in this bill. Mr Gilmore argued that we have spent all of our time talking about what is effectively the last substantial clause in the bill—much of our time has been spent on that. He seemed to be saying that no matter the size of a bill if there is an important clause in it that we do not agree with we must still pass the bill. That was the kind of shallow thinking that Aaron Gilmore had and he was advising this side of the House to take that view. 
We heard also from Mr Bennett. I wonder whether he had read the bill fully or what point he was trying to make. He really did believe that this side of the House does not have the best interests of the community at heart. He actually believes that. That is the kind of amazing contribution that we heard on this bill. 
Then we had a contribution from the ACT Party. The ACT member began to make a non-existent link between taxation in Britain the unrest in the Middle East and the development of the Asia-Pacific region. His argument went something along the lines that Britain’s troubles are caused by high taxation and the differences that creates. Then he referred to the Middle East and talked about the unrest there. He talked about the kind of society there and blamed it on the kinds of things we are debating here. Then he came amazingly to the two Asian giants I guess he was referring to that are producing amazing growth rates at the moment. That member should reflect on the fact that those two countries put together probably have a billion people in poverty. [ 
Interruption 
] The member has been to those countries and that is a fact. But when members on this side of the House talk in the New Zealand context about fairness and equity then those things become important. 
My colleague Su’a William Sio talked about a hospital pass—that the nature of this bill was a hospital pass. There is quite a lot of truth in that comment about what this legislation does and how the last clause of this bill has introduced a major change which is fundamental in a bill of this kind. Debates on remedial matters bills of this kind—and this point has also been made—generally are non-controversial and generally there is broad agreement across the House. But this was not a bill like that. A major controversial element has been introduced in the bill. Minister Dunne tried to make light of that but we cannot make light of that when it is a serious provision that needs to be debated fully. It is quite sad really when this side of the House supports all of the other provisions in the bill—everything but one clause. Tax secrecy the privacy framework tax pooling and changes to donee status: we support all of those things but what we have been reduced to doing is to debate this particular provision. 
It is interesting to follow the argument from the other side. The Government justifies the abolition of gift duty because of these elements: gift duty raises only $1.5 million a year costs half that amount to administer and has a $70 million compliance cost. The Government says that therefore it does not work; therefore it has to go. But that is being deliberately disingenuous because gift duty exists to prevent tax avoidance and structuring. That is what it is there for. Scrapping gift duty opens the way to tax avoidance and structuring. If we take those characteristics the measure has been quite successful. It was never about how much tax was going to be taken or how much it would cost to administer. It was an important pillar to avoid tax avoidance and structuring. 
That point was made very strongly by the New Zealand Institute of Chartered Accountants. I know that Minister Williamson believes that of course it would say that because of self-interest. Well I give the institute quite a bit more credit than the Minister does. The Minister himself supports that group in terms of the quality of its submissions before select committees so I take its submission seriously. The institute identifies major tax-avoidance opportunities that this provision will give. The House has heard them all but the final statement is still worth repeating: “ability to split incomes with people on lower incomes”. That is very interesting because Minister Dunne is interested in income splitting although his National colleagues are not. Maybe this is a back-door way of bringing in income splitting or maybe there is a lovely Freudian kind of explanation for why the Minister supports it. But “ability to transfer income to loss-making entities”—everyone has talked about that but it still is a problem. Simply taking it away in this way does not solve those problems. The “ability to transfer assets in order to meet minimum thresholds for the financial arrangement rules and the foreign investment fund rules” and “ability for someone with a tax liability to divest themselves of the means to pay and then to claim hardship”—those kinds of points have been well made. 
I liken the measure to putting a fence at the top of a hill of unstable ground so that people will not play there and fall in so that that fence does its work. But because nobody has fallen over and died we think we should take that fence away. That is what I liken this provision in this bill to and that is why we cannot support it. 
Other important contributions were made. I was fascinated by Lianne Dalziel’s passionate interrogation—and she spent about four or five calls on this—concerning the regulatory impact statement. It told us a lot about those whose job it is to tell this House what those impacts are. She went through it in some detail and made an important contribution. But there is a question in my mind now. I know that Aaron Gilmore does not accept this but the $70 million that is projected is probably a figment of somebody’s imagination. It is a very rough way of doing it but it has become a driving force for this Government in bringing this clause into this bill at this time. Therefore it stretches credibility—certainly mine—and it is in the regulatory impact statement. 
In the end one has to wonder why the Government is doing it. Is the Government now simply taking another step in advantaging those who are well off and making sure they get another tax break? They have had several already and this is another one that will make that ability available to them. I thought Stuart Nash was very astute in saying that one of the perverse effects of this could be seen in those who will now transfer huge sums of their resources into trusts etc. It will heighten avoidance behaviour—behaviour of a type we have not seen. 
It is a rushed decision and for all of those kinds of reasons despite the fact that we support every other clause in this bill this has been the pivotal clause for us. The Government is not prepared to wait for the report on all of this to be ready so that a more considered decision can be made. I wish it would listen to what Warren Buffett said yesterday: “Do charge me tax fairly.” Members on that side might need to think about that. Thank you. 
A party vote was called for on the question  
That the Taxation (Tax Administration and Remedial Matters) Bill be now read a third time. 
Ayes 66 
New Zealand National 57; ACT New Zealand 5; Maori Party 3; United Future 1. 
Noes 53 
New Zealand Labour 42; Green Party 9; Progressive 1; Independent: Carter C. 
Bill read a third time. 
Duties of Statutory Officers (Census and Other Remedial Provisions) Bill 
First Reading 
Hon MAURICE WILLIAMSON (Minister of Statistics) 
: 
 I move  
That the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill be now read a first time. 
 This bill is a very straightforward and I think practical response to two matters requiring quite urgent attention. Part 1 of the bill amends the Statistics Act to give effect to the decision to defer the Census of Population and Dwellings from this year to 2013. As the House will know the census was supposed to have occurred in March of this year but after the devastating earthquake on 22 February in Christchurch for a number of reasons it was decided to defer the census. One reason was that it would be very unfair to the people of Christchurch while going through the recovery process to force them into doing all of the work. Secondly there were huge dislocations of people so the numbers would have been very distorted. But more important the very hard one for us was that the actual office that did most of the census processing was based inside the red zone in Christchurch and was very very badly damaged. 
Part 2 changes the Statutes Drafting and Compilation Act of 1920—an Act that I am sure every member of this House reads on a regular basis to keep themselves— 
Hon Trevor Mallard 
: It’s actually a bit serious this. 
Hon MAURICE WILLIAMSON 
: Yes. Yes I understand that. Part 2 changes the Statutes Drafting and Compilation Act 1920 to enable the Chief Parliamentary Counsel to delegate his or her functions responsibilities duties and powers. Both of these matters need to be attended to in a timely fashion. 
Part 1 of the bill amends the Statistics Act 1975. Section 23(1) of the Statistics Act 1975 currently requires a census to be undertaken “in the year 1976 and in every fifth year thereafter.” The amendment contained in the bill to omit the year “1976” and substitute “2013” removes the requirement that a census be undertaken this year and it puts everything back on to a new time frame. The bill needs to be enacted and enforced before the end of the year if the Government Statistician is not to be in breach of the statutory obligation to have undertaken a census in this year of 2011. 
The bill also obviates the need for the current proclamation process whereby the Governor-General appoints the day and timing of the census. The amendment enables the Government Statistician to appoint the day and timing of the census by notice in the  
Gazette 
 as soon as practicable after the legislation comes into force. This streamlined process is for the 2013 census only and is made in the light of public announcements already issued about the next census. It will allow notification of the actual day to be given in a more timely manner than the proclamation process allows. 
Some members may raise questions about the nature and frequency of future censuses—or censi I guess. Is it censuses? I think it is censuses. I think it is actually. We will have to get a definition later—censuses or censi? I have asked the same question: in this modern day of information technology and information processing is a 5-year cycle the right way to stay? It is a question I have asked; we do not know the answer. So I make it clear to members that this bill does nothing to preclude further considerations of how often and how we might undertake a census after 2013. This bill is just for 2013 and to get us back on to a 5-year track. Statistics New Zealand is currently completing its stage 2 business case Tomorrow’s Official Population and Social Statistics to provide Cabinet with a range of longer-term options and they will be considered. 
Part 2 of this bill amends the Statutes Drafting and Compilation Act 1920. The proposal to modernise the delegation powers of the Chief Parliamentary Counsel is in line with the recommendations of the Law Commission and it is consistent with the general position of chief executives under the State Sector Act 1988. Members will note that the amendment is achieved by inserting three new sections after section 8A of the Statutes Drafting and Compilation Act 1920: new section 8B “Delegation of functions responsibilities duties or powers”; new section 8C “Absence or incapacity of Chief Parliamentary Counsel or vacancy”; and new section 8D “Revocation of delegations”. 
This bill meets two well-established needs. Legislation is needed to change the requirement to hold a census in 2011 to 2013. The Chief Parliamentary Counsel needs an express power of delegation to enable the Parliamentary Counsel Office to be effectively managed during the period of his secondment in the United Kingdom. It is appropriate that this bill be considered under urgency and through all stages. I recommend this bill to the House. 
RAYMOND HUO (Labour) 
: 
 I must congratulate Minister Williamson on his success in introducing the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill under urgency. If it passes without going through a select committee—and I guess that is what urgency is all about—it will be the 21st bill so far to have gone through Parliament under urgency with no select committee deliberation under this National-ACT Government. In that regard my congratulations should be read in inverted commas. Labour would have supported this bill. We called upon National to agree to allow the bill to go to a select committee so that it could receive public input. It is unfortunate and it is regrettable that the National-ACT Government refused to do so. We have no other option but to oppose this bill. National is continuing a habit of rushing laws through all stages under urgency. Rushed law is often poorly considered and has unintended consequences. 
It is also interesting to note that National MPs have developed a habit of taking short calls. It is fitting for me as Labour’s spokesperson on statistics to report some statistics. In my observation on average National MPs take only a 3-minute call for a 10-minute speech and a 1½-minute call for a 5-minute speech. No wonder they are so passionate about ramming through legislation under urgency. On the one hand the National Government is moving at a glacial pace in finding a plan to grow our economy but conversely it is moving very fast on and is very fond of rushing through bills under urgency. No wonder its partner the ACT Party is such a climate change - denier because it is equally slow and moves at a glacial pace when attending to issues concerning our economy but in a similar vein it moves rather swiftly in rushing through legislation under urgency. 
I reiterate however that Labour agrees with the policy objectives of this bill but we cannot support the way that the Government is seeking to rush important constitutional changes through Parliament without giving the public a chance to have its say. Those who have read my media statement and the subsequent Red Alert blog on 25 February 2011 would appreciate that I supported Government Statistician Geoff Bascand’s decision not to hold the 8 March census. I supported the decision of Statistics New Zealand as we as a nation turned our efforts to help the people of Christchurch through their darkest hour. I also sent my best wishes to census staff based in Christchurch at that very traumatic time. 
One commentator whose name is conveniently “Unpleasantly Odouriferous” made a very interesting point: “I can understand the decision—but I am intrigued about the mechanism. The Statistics Act seems pretty clear about holding a census every five years and 2011 is the fifth year … so it’s a legal requirement. I know the Government is now looking at legislation to permit this post-poning of the Census—but cancelling the thing by Executive fiat and without that legislative authority seems to sail close to the Muldoon case. … I am not litigating the actual decision—just wondering about the constitutional niceties.” I agree. I am also not litigating the actual decision but I was left wondering about the constitutional aspects. 
There are other aspects however which I wish to touch upon at the first reading of this bill. Firstly there is an increasing demand for statistical information from iwi as more Treaty settlements are agreed. Statistics New Zealand is working with iwi to identify the types of statistics that will be most useful for the collective management of transferred assets. I wish that the relevant stakeholders such as iwi and those parties involved in the settlements can have their say and the bill’s referral to a select committee rather than ramming it through under urgency is the most appropriate way to achieve that. 
Secondly and this is more relevant to the Minister responsible for this bill the Minister of Statistics there are some operational issues with regard to Statistics New Zealand and rushing the bill through under urgency without properly addressing these issues would leave the stones unturned. That is not fair for Statistics New Zealand. In the Minister’s response to the standard estimates questionnaire he notes: “The statistical system has lacked coordination coherence and prioritisation.” There is $17.685 million sought in 2011-12 for the coordination of Government statistical activities. Statistics New Zealand is responsible for leading the official statistics system. The Minister’s statement will lead to more questions such as: in what way does the official statistics system lack coordination coherence and prioritisation; what will be the key challenges for the official statistics system in 2011 and 2012; and will Statistics New Zealand be ready for the 2013 census? 
Thirdly I understand that the information technology used by Statistics New Zealand is ageing and needs to be upgraded. When will the information technology systems be upgraded? What will be the total cost of the upgrade? What kind of impact will there be on the 2013 census? 
Fourthly there is some debate as to whether we should hold a census every 10 years or every 5 years. Without a select committee deliberation we will not have the opportunity to have these issues addressed. As the Minister just confirmed this bill will not be good enough to address those issues. 
From the regulatory impact statement by Statistics New Zealand we know that to defer the March 2011 census to March 2013 and hold 5-yearly censuses thereafter would incur a cost estimated at $54.5 million plus the $18 million not spent on the 2011 census. So with constitutional contractual operational and financial aspects in mind there are solid reasons for this bill to be referred to a parliamentary select committee. For those reasons Labour opposes this bill. 
JOHN HAYES (National—Wairarapa) 
: 
 I am absolutely dumbstruck and dumbfounded— 
Hon Trevor Mallard 
: Just dumb. 
JOHN HAYES 
: —or maybe just dumb probably like the last speaker—because it is just astonishing. We had an earthquake in Christchurch and we have a legal obligation to conduct a census every 5 years and that last speaker Raymond Huo said that Labour would not support the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. It is absolutely astonishing. That member is an accountant and he is locked up in the figure of $17.685 million of whatever. That is irrelevant. The core issue is this. It is very simple. We made a decision to postpone the census following the 22 February earthquake in Canterbury. The census collects vital information. We cannot do it at the moment because of the problems in Canterbury. That is why this legislation is before the House. This evening I have been using—and I just show my colleagues—a diagram I have discussed with the Prime Minister based on the 2010 statistics. They show how people from Masterton and provincial New Zealand are moving into our cities and we have a waist in the demographic of missing 20 to 50-year-olds in our workforce in the Wairarapa. This is very important information and this is why we need to have a census. As I said because of the legal obligation we must pass this legislation through the House tonight. Thank you. 
I seek leave to table this original piece of work on the floor of the Chamber. 
The ASSISTANT SPEAKER (Eric Roy) 
: What is the origin of that document? 
JOHN HAYES 
: Me based on Statistics New Zealand data. 
The ASSISTANT SPEAKER (Eric Roy) 
: It is not a public document. It is a piece of information produced by the member. Leave is sought for that purpose. Is there anyone opposed to that course of action? There is. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I think my colleague Raymond Huo summarised our position on the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill relatively well. Given decent time decent briefings and proper process I think we would have been supportive of the legislation. Even the member for the Wairarapa Mr Hayes summarised the situation pretty well. There was an earthquake and we all know that there could not be a census in Christchurch this year. I think “munted” is the description of the centre of Christchurch. The office was stuffed and we could not hold a census for part of the country. Therefore it had to be deferred. I would have thought that Maurice Williamson if he was a good active Minister of Statistics would not go past the first week in March when he had advice to that effect. The decision to do it we are told was made in May and I think the announcements were made around that time. 
Hon Maurice Williamson 
: The census was actually being held in March. We cancelled it back in February. 
Hon TREVOR MALLARD 
: OK it was cancelled. But the decision to take this process was made in May I understand. The question I have for the Minister is a relatively simple one because this bill is not complex. I think it is fair to say that when we get to the Committee stage there will be some holding of the Minister to account for what might be described as sloppy drafting. But we will work our way through that and that is one of the reasons of course why bills should go to select committees. The Minister is aware that I offered a process whereby the bill went to a select committee for the period of the adjournment and then went through its stages without much debate at all and quicker than we will do it today and tomorrow. There was an offer to do that because it meant that we could have had the statistician in and we could have had parliamentary counsel— 
John Hayes 
: Trevor you’re just playing games. 
Hon TREVOR MALLARD 
: Not at all. I have been around this place for a while and I have respect for the institution. There has to be a very good reason for a bill not to go to a select committee. The fact that the member was late getting himself organised in this way is not a good enough excuse. 
Hon Maurice Williamson 
: We had to get an appropriation through the finance Minister and that took some months. 
Hon TREVOR MALLARD 
: Well the member is now pleading a lack of influence. The member is now pleading the fact that the Minister of Finance will not listen to him. 
Hon Rick Barker 
: The Minister is saying it’s difficult to soar like an eagle when he is surrounded by turkeys. 
Hon TREVOR MALLARD 
: I want to be a little bit fair to that Minister. If I was putting together a National Cabinet I would stick him in it because he has had experience and he knows practical stuff. If he was in there he would have been able to sort out the Minister of Finance and the bill would have been able to proceed. It could have been referred to a select committee for 2 weeks we could have had 2 or 3 hours of hearings and people could have been satisfied. The drafting could have been made slightly more fashionable than it is and we could have heard from the people who are interested in it. That would not have been hard. And as I said it would have taken less time than pushing it through this way under urgency. In fact we probably could have had one speech from either side in the first reading. It could have been off to the select committee by now if the Minister had decided to take that approach. 
I had one specific question which the Minister has answered privately that I would like to get on to the record as part of the exercise and that was to seek an assurance that section 77 of the Electoral Act is not offended by this bill. There is a requirement in there for 5-yearly censuses—and the word is “censuses”; I have looked it up. 
Hon Maurice Williamson 
: It’s Latin-based. 
Hon TREVOR MALLARD 
: Yes. It is Latin not Greek and it means an assessment. The first thing it used to be was a traffic count. It was used to count the traffic. That was the first census. Then it was used for taxation in Roman times—[ 
Interruption 
]—and no like the member I cannot remember. I had to do some research in the  
Collins English Dictionary 
 in order to find that out. 
There is another question that I think is important and I am obliged to my colleague Charles Chauvel for highlighting the issue to me. Why when we have a Statutes Amendment Bill that has been through the select committee—and I think we also have the Legislation Bill somewhere in the process—are we amending— 
Charles Chauvel 
: Both back from committee. 
Hon TREVOR MALLARD 
: They are both back from the select committee waiting for their second readings. Why are we taking a process to put through under urgency an amendment to the Statues Drafting and Compilation Act? I want to seek an assurance from the Minister that this is not legislation in order to make arrangements for a particular individual. I think it is very important that the House gets an assurance that this is a general piece of legislation and that we are not faced with the immediate situation of someone who wants to do another job for a period of time and come back. 
If that is the case that would be an outrageous abuse of Parliament because in the briefings we were given there was no such reference. There was no such reference at all. In the past chief executives have gone overseas to do other jobs—sometimes they are very important jobs—and have come back. They do not necessarily come back to the same job—they took their chances when they returned to the country. I think it is important to get that assurance and I think the time taken on the legislation will depend on the Minister being able to give that assurance during the select committee process. 
Hon Rick Barker 
: Will we have that assurance under a polygraph test? 
Hon TREVOR MALLARD 
: No. Frankly if that Minister gave his word then I would take it. Of course inside this House we are obliged to. Behind the chair there would be one or two of his colleagues whom I would not be quite as trusting of including the Minister who has responsibility for parliamentary counsel. But within this House— 
Hon Maurice Williamson 
: Never you! 
Hon TREVOR MALLARD 
: Never me either. I think there is never a danger of my being Attorney-General. I think there is a certain amount of shuddering to my right at the very prospect of that. 
I compliment my colleague Raymond Huo who is leading the Labour debate on this issue for his work both on this legislation and generally as the Opposition spokesperson on statistics. I think it is fair to say that it is not normally a position that has a lot of profile but the member has made a lot of it. He has looked at a lot of the statements that have come out. He has inquired into the positions and workings of Statistics New Zealand and he has developed an understanding of statistics the way it works and the importance of the Government Statistician. I think the last person who had that level of understanding—I do not want to be too rude to Darren Hughes—was Michael Cullen. As well as being the Deputy Prime Minister and the Minister of Finance he was at least early in his career the Minister of Statistics. He thought it was an important role and he wanted to guard the independence of it. 
Chris Hipkins 
: I’m going to tell Clayton you said that. 
Hon TREVOR MALLARD 
: Oh was Clayton the Minister as well? I will plead guilty to my friend and colleague Chris Hipkins for that one passing me by. It did not quite— 
Hon Pete Hodgson 
: I was too Trevor. I was Minister of Statistics. 
Hon TREVOR MALLARD 
: Oh dear! I do not care about that member; he will not be voting for the next Cabinet in November so I do not really care! But I say to Clayton that I am very sorry. The point I want to make is that Dr Cullen regarded the independence of the Government Statistician as vitally important. Frankly on occasions we used to get quite grumpy with him. There were some arrangements that we thought could have been much better from a taxpayer’s point of view. We thought we could have got better-quality information but over a period of time we had some statisticians who just would not be told. 
NIKKI KAYE (National—Auckland Central) 
: 
 I am delighted to speak on the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. This bill is supposed to be non-controversial. However I am absolutely shocked that Labour is opposing it. 
We understand why this legislation has to be before the House. The census was postponed as a result of the Canterbury earthquakes. The earthquakes were devastating to our country. Over 180 people lost their lives thousands of people lost their houses and some people lost their limbs. This bill is about restoring our ability to hold that national census. Actually it is about restoring the heart of our democracy in this country. We know that many people have shifted between electorates and I am shocked that Labour does not support this legislation that will enable us to determine how many people are living in electorates. That cuts to the core of our parliamentary democracy. 
I commend this bill to the House because it is about restoring what happened as a result of Canterbury and ensuring parliamentary democracy reigns. I am shocked that Labour does not support this bill. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Assistant Speaker Roy. Kia ora ano tatou katoa. This is just a short call from the Maori Party to say that we support the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. There are some requirements that we need to meet and the Maori Party is fully behind that. 
One of the concerns we had was around the possibility of the move of the Maori Option which has some links to the timing of the census. We were in discussions with the Minister of Statistics and he has assured us pretty much that that will not be affected. Therefore our concerns have been laid to rest. 
From that background I think it is fair to say that we are supportive of this bill all the way through every stage to make sure that that particular concern can be addressed and also that we meet the obligations required of us. Kia ora tatou. 
CHARLES CHAUVEL (Labour) 
: 
 I would like to begin by repeating something that my colleague Trevor Mallard said which was to pay tribute to the careful contribution that was made in this debate by my colleague Raymond Huo. This is not usually a portfolio area or a spokespersonship that is seen as fascinating or high profile but it is very important. I certainly enjoyed that careful contribution to the debate. 
I want to say a few things about the two parts of the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. The first is the proposal to defer the census by 2 years. Members on this side of the House accept immediately that given the situation in Canterbury it is very likely that it is sensible to defer the census. We heard from the Minister of Statistics in his contribution that there was a problem because one of the chief offices of the Government Statistician is located in Christchurch. As Mr Mallard said we are obligated to accept the Minister’s word on that. But it would have been useful for members on this side of the House and for the public to be able to have confidence in the administration of the Government and in particular given the pretty extraordinary proposal to defer a census to have had a short period where this matter could have gone to a select committee. 
It would have needed only 2 weeks—the next adjournment. It could have come back to Parliament in a couple of weeks and we would have had the assurance of process that the Standing Orders suggest ought to be the standard that this Parliament works to. We all know that we do not have an Upper House; we have just this Chamber. The only scrutiny that this legislation will receive and the only scrutiny that the Minister’s assurances to us will receive is in the Committee stage which we are about to embark upon because thanks to this bill being included in the urgency motion it will be put through all its stages in this sitting of Parliament. So there will be no opportunity to test whether it is necessary to have a deferral of the census for 2 years no opportunity to test the assurance of the Minister that the location in Christchurch of one of the chief offices is a problem and no opportunity to test the concern raised by Raymond Huo that there is real redundancy in the technology being deployed by the Government Statistician for census purposes. All those important issues will simply remain in the ether and that is just not satisfactory. 
I am also concerned about the ramifications of deferring a census. For a long time the census has been held on a 5-yearly basis so we have a body of material a body of data that is able to be compared 5-year block against 5-year block. I do not know because I am not a statistician what the effect of suddenly introducing a new time period into the process will be. Again it would have been useful for members of Parliament and for the public to be able to hear from experts—from at least the Government Statistician but also from others with an interest and expertise in this sort of area—on what we are doing to the nation’s data mine by agreeing to this proposal. 
I am also concerned about some of the language that is deployed by the draftsperson in the bill. I will use the Committee stage to ask the Minister a little bit more about this but I signal the concern now because I can see he is paying close attention to the debate and it would be useful to hear more from him in the Committee stage. The drafters talk about obviating the need for the proclamation process and that is a useful reminder about the constitutional position of the Government Statistician. Under the State Sector Act he has a degree of independence as far as his appointment is concerned and there is good reason for that just as there is good reason for a proclamation process as to the date of the census. It puts beyond the ordinary reach of a Public Service chief executive and of Ministers to whom the chief executive reports the question of when the census date should occur. 
Hon Maurice Williamson 
: This change is only for this 1 year. 
CHARLES CHAUVEL 
: The Minister says as he said in his speech that this change is only for 1 year. We have all seen in this House how precedents can be made through drafting like this. The proclamation process is done away with because there is said to be an emergency on one occasion. Then guess what? When the Minister has his way and defers the census from every 5 years to every 10 years as he is on record saying he wants to do when we get such legislation in the future lo and behold will it be a surprise to anybody if the proclamation process which is a careful check and balance that has been thought out over years suddenly disappears? Well again we will never know because there is not the opportunity to hear from for example the Legislation Advisory Committee on that sort of question. We would have that opportunity no doubt if the Minister had acceded to Mr Mallard’s very modest request that there be a 2-week submission period so that the public and experts could tell us a little bit about the true ramifications of this proposal. 
The second part of the legislation is of equal concern. Happily we will not be able to have grandstanding from members about Labour not caring about Canterbury on this question at least as we have had from them so far on the first question. It is true that the Statutes Drafting and Compilation Act 1920 is unusual. It does not contain any of the provisions we would expect to see in modern legislation relating to the administration of a Government department. We know this because the Regulations Review Committee considered the Legislation Bill pretty extensively. I see the hard-working deputy chair Tim Macindoe on the other side of the House; I hope he will take many calls in this debate because I know he will have a great contribution to make on the question. We had the Attorney-General in we had past Chief Parliamentary Counsel in and we had the current Chief Parliamentary Counsel address us on the problems that that office currently faces because of the antiquated provisions in the Act. We have reported back to the House a revised Legislation Bill that would fix many of those problems. 
So why has one part of that Legislation Bill been plucked out and put into urgency and why are we being asked to pass it tonight? I want to know whether the Minister actually knows the answer to that question. Are we doing something here as Mr Mallard asked him that is to the peculiar benefit of an individual? What is the urgency for this piece of the Legislation Bill being taken out of its context and passed through all its stages in Parliament? Is the Chief Parliamentary Counsel for example still in the country or is there already a delegated arrangement de facto in place which we are effectively being asked to validate without a true and accurate picture of the position—which again we would have if this legislation were sent to a brief select committee process? 
What ought to be a relatively straightforward process by virtue of the Minister’s refusal to agree to a truncated select committee process becomes more complicated and unfortunately more controversial. Unless we can get some answers during the Committee stage to the sorts of issues I have raised then the Opposition will remain disquieted by this legislation. 
KANWALJIT SINGH BAKSHI (National) 
: 
 I thank Mr Assistant Speaker Roy for the opportunity to participate in the first reading of the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. This bill allows legislation to be changed in order to hold the 2011 census in 2013. The census of 2011 was postponed following the 22 February earthquake in Canterbury. 
This bill also includes amendments to modernise the delegation powers of the Chief Parliamentary Counsel to enable the delegation of his or her functions responsibilities duties and powers. I commend this bill to the House. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 That is all very interesting but it is no defence of why the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill is being heard under urgency. We have not heard from the member who has just resumed his seat Kanwaljit Singh Bakshi the member on the opposite benches before that or any National member any defence as to why this bill should be passed under urgency. I have spent a bit of time as Minister of Statistics and the key feature of the issue of statistics is that it be treated with a certain arm’s-length approach by politicians. Process around statistics matters. The independence of statistics is important. 
Hon Trevor Mallard 
: The member got captured. 
Hon PETE HODGSON 
: It may be that I was captured by the Government Statistician of the day. It is absolutely true that when one is a Minister of Statistics other Ministers want the Minister of Statistics to beat up a little on the Government Statistician and when one is a member of the executive other than as the Minister of Statistics one joins the other 19 in trying to beat up on the Minister of Statistics in order to try to usurp the independence of the Government Statistician. 
This however does not work and it is important that it does not work. It may be that there are some processes relating to release timing and the use of adjectives when improvement or reasonableness could prevail a little more from time to time—I am sure that people would argue that. But the underlying fact is that a Government that has an independent set of statistics is a believable Government. Conversely a Government that has a constrained or politicised set of statistics is not believable. We can all list nations on both sides of that. 
Tim Macindoe 
: How is this politicising? 
Hon PETE HODGSON 
: There is an intervention of some sort from a humanoid opposite. A vaguely humanoid personage wishes to make an intervention. Let us hear from him. 
Tim Macindoe 
: I want to know how this is politicising it. 
Hon PETE HODGSON 
: It is politicised by screwing around with the numbers—screwing around with the numbers—I say to the member opposite. That is what “politicised” means. 
When China says that its CPI is this that its population census has changed by that or that its GDP has altered by the other some people are unkind enough to say that that may be wrong because the statistics in the view of some commentators are not sufficiently independent in the People’s Republic of China. They do not say that about New Zealand however. The statistics in New Zealand even if they are subject to ongoing correction—and they are—are regarded as being free of political influence. Why does this matter in this debate? Because it is important—I think; we think—to have legislation like this referred to a select committee in order that the Government Statistician and people who work for that department can be taken into the select committee and their advice on the legislation can be received. 
We assume that this is what the Government Statistician wants. We assume that the Minister of Statistics is merely allowing a sensible decision to be given legal effect. That is what we assume. But the independence of statistics is sufficiently important that we ought to test it openly and a select committee process is how that happens. This select committee process is being denied the Government Statistician is being denied the New Zealand public and is being denied this House. Do members think the Opposition should roll over and let that happen? I do not think so. 
There will be opposition to this legislation only on the basis of process. It seems sensible to delay a census by 2 years or perhaps 1 year or 3 years; I am not sure. It seems sensible to do that because of the earthquake. If it is sensible it is certainly the case that we need to do it by statutory amendment. It cannot be done otherwise. We accept that. We can read black-letter law like anyone else. But it is not OK— 
Sandra Goudie 
: They can read! They can’t add. 
Hon PETE HODGSON 
: It is not OK I say to the “Orange Roughy” for an earthquake that is 6 months old next week to be the cause of something that only now comes to the House. It is not OK. It is 5 months since we were told that we would have to delay the census—5 months. What has the Minister of Statistics been doing? Is this a big piece of legislation? It is not. Is it difficult legislation? It is not. Does it involve some expense? Yes a little. Did he have trouble getting money from the Minister of Finance? Apparently— 
Hon Maurice Williamson 
: A little? It’s $94 million. 
Hon PETE HODGSON 
: It is $94 million. OK now we are going to quibble. So because it is so costly—here is the logic now. The logic as offered by way of interjection goes like this: there is a delay the delay is caused by the cost and the delay is absolutely unavoidable because of the cost. On the other hand delaying the census itself is unavoidable because we cannot make any sense out of a census when we have a bombed-out second city of the nation. Therefore the one conclusion we can draw is that the Minister of Statistics failed to properly make that argument to the Minister of Finance and took 5 months to fail—5 months to achieve no progress on this. All he needed to do was say: “Bill what about the idea that you’ve got no choice? What about that Bill? Has there been a rattle down in Christchurch? Verily there has. Do we need to delay the census? Verily we do. Will it cost money? It does; it does. Therefore cough. There ain’t no option.” That is the end of the debate. 
The Minister of Finance may have asked for the cost to be brought down a bit. I would have if I were the Minister of Finance. But you see can I just say to the Minister of Statistics that he does not need 5 months to bring his costs down; he needs 5 weeks or 5 days. It is not a major exercise. There has been diddly-squat going on here. The Minister of Statistics has been sitting on his hands. The Government Statistician has perhaps been sitting on his hands. Everything has happened too late. It has been brought to the House in a bit of a hurry. Everyone is in a bit of a blind panic about it. We have been asked to roll over and our answer is no thank you. 
If the Government wants to govern badly it should wear it. If the Government wants to govern slackly it is the Government’s problem. If the Government wants to govern without the disinfectant of daylight then it is on the Government’s head but the Government should not invite the Opposition to roll over and say that it does not matter because it does. It does matter if the Government wants to play fast and loose with the processes of the House. It does matter if the Government wants to cut public viewpoint out of this legislation. It does matter if there will be no hearings in front of the media. It does matter that we are debating this bill at this hour of the night under urgency. It matters. It is not OK. We are not putting up with it. 
Is there any part of that that the Government does not understand? Let us see. I will pause. There is silence from members on the Government benches. They have now understood that the Opposition’s job is to make sure that process is followed properly. That is what we are paid to do. One of the many jobs of Her Majesty’s loyal Opposition is to ensure that good process is followed and that urgency is used when urgency must be used—not when it is convenient to use it; not when it is a cover-up for slackness in earlier months; not when it is due to dilatory behaviour by officials by the Minister by the Cabinet committee in question or by whomever; and not when there has been a bit of debate over $94 million. Not for any of those reasons; we do not roll over for any of those reasons. If there is a good reason for urgency we will be very happy to support it but this legislation is not such a reason. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I am delighted to get up and talk to the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. I commend the Minister of Statistics for making the sensible decision to postpone the census following the 22 February earthquake in Canterbury. This census could not have been successfully completed given the national state of emergency in Christchurch and the probable impact on census results. Of course there has also been significant impact on census staff and extensive damage to Statistics New Zealand buildings in Christchurch as well as upheaval for the people of Christchurch. 
I note the example of the hypothetical family of Cherie Richard Cherise and Darien who have had to relocate from their home and who have no idea when they may go back into their home. That would affect a census whenever it was held and I commend the Minister for his excellent response to this crisis. 
Hon JOHN BOSCAWEN (Leader—ACT) 
: 
 The ACT Party will be supporting the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. 
A party vote was called for on the question  
That the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill be now read a first time. 
Ayes 76 
New Zealand National 57; Green Party 9; ACT New Zealand 5; Maori Party 3; United Future 1; Independent: Carter C. 
Noes 43 
New Zealand Labour 42; Progressive 1. 
Bill read a first time. 
Second Reading 
Hon MAURICE WILLIAMSON (Minister of Statistics) 
: 
 I move  
That the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill be now read a second time 
. This bill makes legally necessary and urgently required changes to two different Acts the Statistics Act 1975 and the Statutes Drafting and Compilation Act 1920. 
The changes to the Statistics Act arise from decisions taken to defer the taking of the census following the Canterbury earthquake in February this year and subsequent decisions to conduct a census in 2013. Can I just say to members on the other side of the House that they are welcome to have a few slings and arrows and take a few shots at me but at the time of the deferral of the census the first question asked was whether we needed to do one at all or whether we should just have a 10-year break and bring the next one on as planned for 2016. That type of deferral has happened twice in the history of this country. It happened in 1931 because of the Napier—actually it did not happen because of the Napier earthquake even though that was during that year; it happened because of the Great Depression. The Government of the day decided not to hold a census and there was a 10-year break. The deferral happened again in 1945 during the Second World War; the Government decided to defer it. 
So one of the options that we had to consider—it went to a Cabinet committee and Ministers put a lot of thought into it—was whether we should just can the census for 2011 and pick it back up again in 2016 as was planned and as is in the programme. But of course a number of things flow from the census. I know that the Maori Party is very concerned about the Maori electoral option which is driven off a census being taken. I know that the Minister of Health is very concerned about population-based funding for all of the different district health boards. If we get those numbers wrong over a 10-year period it might be that he indeed is overfunding certain parts of the country and underfunding others. So population-based funding is affected. I know that there are members here in the House who say to me that they really hope they can get some new boundaries for the next election. Holding this census in 2013 will mean that the new boundaries can still be drawn up in time for the 2014 general election. 
The deferral is achieved by amending the current formulation in the Statistics Act 1975 for a census to be undertaken. I find it bizarre that this was ever put into an Act in this way. Section 23(1) states: “in the year 1976 and in every fifth year thereafter.” This legislation— 
Hon Lianne Dalziel 
: Who was the Government that did that? 
Hon MAURICE WILLIAMSON 
: Well it just does not sit well with modern drafting practices that the exact year is locked in stone. The Act could have said that a census was to be taken every 5 years and maybe provision could have been made for a Great Depression - type situation a war or indeed the Canterbury earthquake. But the Act did not so we are amending it and substituting “2013” for “1976”. The fact is that it does not change anything from that point on. We go on to a 5-year cycle from 2013. The amendment does not preclude the continuing analysis of options for the frequency and sequencing of the census but it does lock in place a census for 2013 and if no changes are made further out into the future another census will take place 5 years from there. 
The bill also obviates the need for the current proclamation process—that is just for the 2013 census; I need to remind Charles Chauvel about that—by enabling the Government Statistician not the Minister of Statistics or anyone else to appoint the day and notify it in the  
Gazette 
 as soon as practicable after the bill comes into force. I heard someone—it might have been Pete Hodgson—say that it could have been a 1-year delay. Well frankly a huge mechanism needs to be geared up for it. Until this decision was taken if we were looking at taking a census in March 2012 the Government Statistician advises that we simply would not have been able to get the infrastructure the personnel who have to be hired and so on in place. We would not get it done in the time frame and be able to guarantee a smooth census. That is why we have moved it to 2013. 
The Government Statistician puts that in the  
Gazette 
. The rationale for this latter provision is to facilitate the timely announcement of a census and provide certainty in the planning process—and believe me certainty is vital for Statistics New Zealand when it is going about ramping up its budgets quite an amount for that census year and bringing in a lot of staff and personnel who come in only for that short period like all the enumerators and then go again at the end of it. 
The changes to the Statutes Drafting and Compilation Act 1920 are a little bit different. I am not an expert on this and it is not even part of the statistics portfolio. It deals with an urgent issue of providing for the Chief Parliamentary Counsel to be able to delegate his or her functions responsibilities duties and powers. In November 2009 the Cabinet legislation committee noted the recommendation of the Law Commission—and I am a big fan of always going with what the Law Commission recommends—in its report  
Review of the Statutes Drafting and Compilation Act 1920 
. I am sure all members know that the Law Commission reviewed that Act. The report recommended “That the legislation should confer on the Chief Parliamentary Counsel express power to delegate his or her functions.” It currently does not. 
The inclusion of the Chief Parliamentary Counsel’s delegation powers in the bill allows the House the opportunity to deal with the matter expeditiously. This is important because it enables the Parliamentary Counsel Office to be effectively managed while the Chief Parliamentary Counsel is on secondment in the United Kingdom from the end of August of this year. 
The Duties of Statutory Officers (Census and other Remedial Provisions) Bill deals with both of these urgent matters in a straightforward and in my view practical way. It alters the statutory duties of the Government Statistician by requiring him to conduct the Census in 2013— 
Hon Trevor Mallard 
: The truth has been flushed out. 
Hon MAURICE WILLIAMSON 
: I cannot have been flushed out; these are the speech notes that I was given by the Attorney-General I say to Mr Mallard. I got them last week so it is a bit hard for him to claim that he flushed me out. The Government Statistician is required to conduct the census in 2013 instead of 2011 and the bill confers the power on the Chief Parliamentary Counsel to delegate his or her powers functions and duties. I commend the bill to the House. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I am delighted to have the opportunity to participate in the debate on the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. I know that most of my colleagues will be utterly gobsmacked when the first thing I will refer to is the regulatory impact statement that accompanies this bill. I want to refer to that because the Minister for Regulatory Reform made an undertaking to this House that whenever bills were passed through all their stages under urgency due to the Government’s decision to remove the regulatory impact statements from the bills themselves the Government would make sure that the statements were tabled in the House. I personally went to the Bills Office to get some copies of this bill’s regulatory impact statement and placed them on the Table of the House. The regulatory impact statement was not on the Table for the first reading of this bill. 
I was deeply disappointed but I now know why. There is a reason why the Government decided to cover up the regulatory impact statement and keep it from the House’s consideration. It is because of the date it was signed. Perhaps members would like to know the date that Vince Galvin a Deputy Government Statistician signed the agency disclosure statement for the regulatory impact statement which of course would have gone to the Minister of Statistics. Would anyone like to know the date? 
Hon Trevor Mallard 
: Yes. 
Hon LIANNE DALZIEL 
: Do members think it was last week? 
Hon Members 
: No. 
Hon LIANNE DALZIEL 
: Week before? 
Hon Members 
: No. 
Hon LIANNE DALZIEL 
: Maybe a couple of weeks ago? Three weeks? Four five? 
Hon Member 
: Put us out of our misery. 
Hon LIANNE DALZIEL 
: OK. How about 6 April 2011? Now of course we have the real reason that we are here under urgency. We have to deal with this urgently because the Government did nothing for month after month after month. We went from April to August and the Government did nothing. Now we are debating the bill under urgency and there is no opportunity for this bill to go to a select committee to be considered by anyone—the Legislation Advisory Committee or anyone. I just heard the Minister say how much he respects and values everything the Law Commission recommends yet he will not allow this bill to go to a select committee even for a week or two to allow such esteemed bodies to make a contribution to our lawmaking. 
Hon Rick Barker 
: Maybe it was stuck on Maurice’s fax machine. 
Hon LIANNE DALZIEL 
: It might have been stuck on the Minister’s fax machine but I am absolutely astounded that he would talk about the urgency of this particular legislation when the regulatory impact statement was signed off on 6 April 2011. 
Unlike some of the other contributors to this debate I am a Canterbury member. I was in Christchurch on the day of the September earthquake which is about to have its first anniversary. I was in Christchurch in my electorate office on 22 February when the second earthquake struck. I have been in Christchurch for most of the very large aftershocks—the Boxing Day aftershock and of course the one on 13 June. I certainly have experienced along with my constituents the devastation that those have caused. I know that the Statistics New Zealand office has suffered as well. I know that it is the centre of New Zealand statistics and that therefore obviously the census had to be deferred. 
But the point I am making is that I am quite tired of Canterbury of Christchurch being used as an excuse—the earthquakes being used as an excuse—for the Government to walk away from its obligations to meet process. This is a process issue and if people do not understand why it is important that proper process is observed even in situations like this and that these challenges are met within the context of what this Parliament is designed to achieve then I wonder why Government members feel they are playing the role they were elected to perform. 
I feel quite strongly about this because a lot of what is happening in Christchurch at the moment does not evidence best practice internationally in terms of recovery from disaster. Part of what the Government has not managed to achieve is the sense of engagement with the affected communities that would make the recovery so much more accessible as it were and that would enable people to own their own recovery. I think that is absolutely fundamental. 
I have just received via the Facebook page of the Bexley Residents Association a copy of the  
CERA: R 
esidential Red Zone Offers—Summary of Sale Process—draft for discussion 
 marked “Confidential not Government policy”. I have just downloaded this from Facebook. This means that the Government through its Government department the Canterbury Earthquake Recovery Authority is consulting agencies outside this Parliament without even consulting members of Parliament or indeed a select committee which would have the ability to look over the fine print and detail of such an offer. 
I have to acknowledge the conflict of interest that I share. 
Sandra Goudie 
: What’s this got to do with the census? 
Hon LIANNE DALZIEL 
: I will be receiving one of these residential red zone offers and I know that that member would like me to stop talking about things that really matter to people in Christchurch but I am saying that the relevance to this bill is that this Government seems to think that consultation with people affected by legislation does not matter. I am reflecting on the fact that this bill does not enable anyone to have any contribution to the discussion about whether this census ought to be deferred for 10 years or for 2 years—which is the Government’s decision that it has taken of its own volition without any reference to a select committee. Here is the Government putting out a discussion document for whomever—who I do not know— 
Residential Red Zone Offers—Summary of Sale Process 
. 
I think that is outrageous but it does show exactly what this Government is doing over and over and over again. Every time we deal with the Canterbury earthquakes we find ourselves in this situation: the Government does not consult with affected parties. We have got this again: Canterbury—Christchurch—is being used as an excuse for a change to the census legislation. But actually it is not the change to the census legislation that I object to. It is the lack of capacity for people to contribute to the discussion about what the decision might be that really frustrates me and all of the people who elected me to represent them. 
I find it incredibly frustrating to listen to members of the Government say that we have had an earthquake in Christchurch. Well I was there; I know exactly what that earthquake experience was like and I have also been there for my constituents who have literally cried in my arms and who have been through every emotion one could possibly imagine. I say to Government members that it really does matter that people feel utterly engaged in the process of decision making when it comes to their recovery. I find it extraordinary that the Government does not think that this is important. 
I might have agreed with the Government about the need for more urgency and maybe for the remaining stages of this bill to go through under urgency but when I read that the regulatory impact statement for this bill was written on 6 April this year I know that the Government has had time to do this properly. I know that it has had time to put this bill through the process. 
I know that the Minister of Statistics sort of put to one side the idea that we would put off the census until 2016 and I do not necessarily know whether I agree with that. But when I hear that it was just at the pleading of Aaron Gilmore that it be brought into effect in 2013 so that he could have the chance of having the Christchurch East constituency disappear then it really does not bode well for wondering why the Government chose that particular option. 
But I really just made that last comment flippantly. The serious comment I will make is that every single decision that will be made in relation to the recovery of Christchurch post that terrible terrible day of 22 February must involve every single one of those affected parties so that they feel utterly engaged in the process of decision making. This bill like the discussion paper that has gone out on the residential red zone offers was not even advised to this Parliament and was not advised to any of the local MPs. That just shows that this Government is not listening to people and is not willing to engage with them. I think that is a shame and it is a good reason to vote against this bill. 
NIKKI KAYE (National—Auckland Central) 
: 
 I am very pleased to speak on the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. I am very pleased that this bill has widespread support except for Labour. It is interesting to note that both Chris Carter and the Greens support this bill. I also think it is interesting that one of the lines I took from Mr Hodgson’s speech was that there has been diddly-squat going on here. This bill is about ensuring that we are able to hold a national census. That is non-controversial. Members opposite have raised the fact that this is being done under urgency. I will raise a couple of points about that. Ms Dalziel raised the issue of the fact that the regulatory impact statement was produced in April. In April what was decided was to defer but there has been a whole lot of work between April and now to make the decision to have the census in 2013. That is why there have been those couple of months. 
But let us just remember again what the point of this legislation is. There is a technical part about the Parliamentary Counsel Office and there is a part that enables members of Parliament to have representation in their electorate. We know that as a result of the devastating earthquakes in Canterbury people have shifted around the country. I know that in my electorate in particular we have had quite a large number of people come in over the last several years. I believe that if we cannot hold that census it means that we cannot do our jobs properly because we do not know how many people we are representing. Secondly and also very importantly it is very difficult for many local government authorities to do their job because they do not know the number of people living in their electorates. Many businesses and community organisations also rely on census data. 
I am very pleased to support this very crucial legislation and commend it to the House. I believe it is fairly non-controversial. I am shocked that Labour is not supporting this legislation. I think there are some very good reasons to support it. If legislation supporting a census is not something that can be taken under urgency as a result of our largest natural disaster in this country then I do not know what would be more worthy. I am very pleased to support this legislation and I commend it to the House. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I apologise; I meant to do this after my contribution to the debate. I seek leave to table the draft document for discussion marked “Confidential not Government policy”— 
CERA: Residential Red Zone Offers—Summary of Sale Process 
. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Is there any objection to that course of action being taken? 
Chris Tremain 
: Can I seek clarification about this document? 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Clarification? 
Chris Tremain 
: Is this document previously available in the public domain? So it has not been presented by the Canterbury Earthquake Recovery Authority in the public domain. 
Hon LIANNE DALZIEL 
: No I downloaded it from a Facebook page. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Is there any objection to that course of action? There is. 
RAYMOND HUO (Labour) 
: 
 Ni hao; thank you Mr Assistant Speaker. The National member who just resumed her seat Nikki Kaye should not be shocked because I listed a number of reasons but largely in respect of constitutional concerns as to why Labour has no other option but to oppose the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. As the Hon Lianne Dalziel has just said it is about process. It is about the core values our Parliament operates under and members opposite simply cannot claim the high moral ground in shutting down the democratic process. Having said that it is fitting for me to touch upon some aspects of this bill at its second reading. 
Part 1 enables the census to take place in March 2013. The bill amends section 23 of the Statistics Act 1975 by replacing the date “1976” with “2013”. This was the preferred option recommended by Statistics New Zealand. Another option was to go to 10-yearly censuses as in the US and other OECD countries starting in 2013 but this option was rejected by the Government. Part 2 amends the Statutes Drafting and Compilation Act 1920 to allow the Chief Parliamentary Counsel to delegate his or her functions responsibilities and duties and powers. Part 2 therefore creates delegation powers similar to those in section 13 of the Clerk of the House of Representatives Act 1988. 
Given that the Minister of Statistics believes that this bill is so important that it has to be rushed through under urgency it is very important for us to look at other aspects. Some developed countries including the Netherlands have given up on censuses. The logic for this is that censuses are expensive are not comprehensive and are slower to produce data whereas surveys for instance can produce data that is just as useful at a lower cost and in a much tighter time frame. Therefore as my colleagues Trevor Mallard and Charles Chauvel said earlier the select committee process was warranted. 
There are some further points of interest I wish to share with members and the general public who are watching the high-rating Parliament TV. I must thank our wonderful Parliamentary Library and in particular Lee Taylor who provided us with such valuable and thoughtful advice. The first census in New Zealand was carried out in 1851 and it was not until 100 years later—that is in 1951—that Maori were given the same census questionnaires as the rest of the population. Then in 1996 the option of completing the form in Maori or English was introduced. There have been only three occasions when the census was not held as scheduled. In 1931 the census was abandoned because of the Depression in 1941 it was postponed because of the Second World War and again in this year it was postponed because of the impact of the 22 February Christchurch earthquake. 
There are some debates in terms of the length of the census period. Among OECD countries there are six countries including New Zealand and Australia that hold a census every 5 years. There are 10 countries that hold a census every 10 years so there are valid reasons for us to consider our statutory arrangements. France is an exception. It holds a partial census each year and the results are published as an average over 5 years. Of course there pros and cons. According to a population expert from Waikato University moving to a 10-year census could make trans-Tasman comparisons tricky and it could create problems for historians. The strongest argument against holding a census every 5 years is the huge cost. The budget for the 2011 census was nearly $90 million which is approximately equal to Statistics New Zealand’s annual budget excluding the census of course. Without a 5-year census there would be more resources available to collect all of the other types of data that are relevant to work and life. 
Mr Andrew Whiteford an analyst originally from South Africa asked whether we were able to use a 10 percent sample of households. Why bother collecting data from every single household and why not just collect the information from every 10th or 100th household? On that note I wish that the Minister responsible for this bill would take as many calls as possible to enlighten us on these issues. Thank you. 
JOHN HAYES (National—Wairarapa) 
: 
 That last 10 minutes of this House’s time was a very good reason why nobody in New Zealand should vote for the Labour Party in the next election. The issue in the second reading of the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill is about two points. The first point is that a sensible decision was made to postpone the census following the earthquake in Canterbury and the second point is that the census needs to be held again as soon as possible within the law and this bill provides for that. I commend the bill to the House. Thank you. 
CHARLES CHAUVEL (Labour) 
: 
 I have listened with great interest to the contributions to the debate on the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill from Government members and I have heard the professions of shock from Nikki Kaye and others. They were not terribly convincing but I say well done to Nikki Kaye for her attempt. I am shocked at the process abuse that we are seeing here with the Canterbury emergency yet again being used as an excuse. 
Hon Dr Nick Smith 
: This is the guy who broke the electoral laws. This is the guy who’s been referred to the police. 
CHARLES CHAUVEL 
: That is ironic coming from a Minister who was in contempt of court but we will leave that one for later on. I am shocked that members opposite continue to try to wrap themselves in the flag and say Canterbury is in a terrible state so they can do anything they like with regard to process and it does not matter. 
I thought that the second reading contribution from the Minister in charge of the bill the Minister of Statistics was quite commendable. I know it was tempting to go off on a frolic and for Maurice Williamson to make little jokes about the Ohariu census. Ha ha! Good on you. But this bill is really important and I hope that we can have a sensible debate about it. As the Minister said in his second reading contribution there are concerns. What happens to the Maori electoral option? We heard from Te Ururoa Flavell that the Maori Party has had some sort of an assurance from the Minister that the Maori electoral option will remain intact notwithstanding the deferral of the census by 2 years. I would be very interested to hear from the Minister how that is because on my initial calculations the maths starts to get quite difficult in terms of the 5-yearly option. 
Similarly it would be useful to hear from the Minister about the effect of the deferral of the census on the population-based funding issues that he referred to. He said his colleague the Minister of Health was concerned about that because as we all know district health board funds are calculated on the basis of population movements. If we are to have a 7-year block now rather than a 5-year block what will be the effect of that on those sorts of movements? What will be the effect on the Budget? What will be the effect on the fiscal position? 
These may or may not be major issues but they are proof. The fact that they were raised in the debate by the Minister indicates the sense of following the Standing Orders and sending this legislation to a select committee even for a brief period of time so that these sorts of technical questions can be addressed. This is our job; it is not an optional extra. It is what we are here to do: to scrutinise legislation to make sure that we get it right and to deal with these sorts of issues. This is why the public pay members of Parliament what they pay us. I am shocked that members opposite can just brush these concerns aside as if they are minor procedural issues—all justified because there has been an emergency in Canterbury and we do not need to think about the details. Members should just reflect on the fact that too often in this House we deal with legislation to amend and undo Acts that we have passed in the relatively recent past. I hope for the sake of members opposite—because all these speeches are on the record—that we will not be in a similar position with this legislation. 
I am disturbed as I said earlier about some of the legislation’s language. I referred to the “obviation of the proclamation” language earlier but there is also a very very interesting justification advanced in the explanatory note for the deferral of the census. We have the statement reassuring on its face that “This streamlined process relates only to the 2013 census …”. But then we have the quite alarming statement: “and is made in light of public announcements already issued on the next census …”. It is settled law in this country which I hope every member knows that just because a Minister announces that a statutory requirement will not be followed it does not mean that that statutory requirement should not be followed. I am a bit taken aback to see in an explanatory note of a bill that one of the reasons for the bill is that a Minister has already publicly announced that something should be so. That is not how we make law in this country; it is still the role of this House to make laws. I think all members should be a bit disturbed that that has crept into the drafting. 
The other point I think it is worthwhile to make is that there is another part to this bill and it has not received terribly much attention to date. I hope the Minister of Statistics feels that he is fully briefed and competent to have carriage of this part of the legislation through the House. He said he had speech notes from his colleague the Attorney-General and I am pleased about that because I think he will need to draw extensively on those notes in the Committee stage. I repeat there is nothing in the proposal to allow an acting Chief Parliamentary Counsel to be appointed that disturbs the Opposition. We voted for such a position when we agreed to report the Legislation Bill back to the House. But that bill is just languishing on the Order Paper. Why is it not being brought forward for a proper debate and discussion? It would do a lot of good things to make our parliamentary procedures more effective. Instead we have this provision plucked out of the Legislation Bill and sought to be advanced under urgency. The Minister has not addressed in any of his contributions why that is being done. 
How long can we have a Chief Parliamentary Counsel on an acting basis under this legislation? Is it proposed that it might be for 6 months 1 year 18 months 2 years or longer? There is no limit on the face of the provisions in the bill on how long a person might act in the very important capacity of Chief Parliamentary Counsel. I think we need to hear from the Minister about why that particular provision is being advanced under urgency and we need to be assured that it is not a provision that simply exists and is sought to be advanced because the Minister seeks to benefit any particular individual. If the position were reversed and it were an attempt to act to the detriment of any individual for hidden reasons then it would clearly be unconstitutional. The reverse position must therefore also apply and Parliament is owed disclosure as to why these provisions are seen to be so important on this occasion. 
I look forward to the remainder of the debate including the Committee stage because those matters and in particular the last one to which I have adverted are ones that we will continue to seek answers on. 
KANWALJIT SINGH BAKSHI (National) 
: 
 Sat sri akaal Mr Assistant Speaker Robertson. I will start my contribution on the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill by acknowledging my appreciation of my Opposition colleague Raymond Huo for providing a lot of information about the census and the importance of the census. Charles Chauvel also mentioned that the funding of district health boards and Government decisions are based on the census. So when two members of the Opposition are telling us that it is important to have a census I do not know why Labour is opposing the bill. I commend this bill to the House. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I think it is sad when we have new members with so little to contribute to the House. The idea that members like Nikki Kaye and the member who has just spoken Kanwaljit Singh Bakshi fought so hard to get in here and then they get in here and make contributions that are frankly pathetic—frankly frankly pathetic—and show no understanding of having read the bill in question show no understanding of the principles behind the bill— 
Hon Ruth Dyson 
: They’ve got the notes. 
Hon TREVOR MALLARD 
: Well if they had borrowed the rather inadequate notes of the Minister in charge of the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill the Minister of Statistics—who I am sad to say was in a manner that was unusual for him reading them in a relatively pedestrian manner during his second reading speech—then that would have shown some initiative. It would have shown them to be members who wanted to be here and who were vitally interested in the matter before them. 
As I indicated in my speech in the first reading debate the first part of this bill is not very objectionable. Clearly the census had to be delayed. There is a debate about whether it could have happened at the end of next year or whether it had to be held till 2013 on— 
Hon Maurice Williamson 
: They must be held in March. 
Hon TREVOR MALLARD 
: No. Actually I say to Mr Williamson that we are changing the legislation now. The census does not have to be held in March just like it did not have to be held in March this year. We are changing the year; we could actually change the month as well if we wanted to. 
Hon Maurice Williamson 
: No it’s to make all the censuses so that they can be compared by year. 
Hon TREVOR MALLARD 
: Oh so the Minister wants to break the 5-year cycle but he thinks the month is sacrosanct. Well I accused my colleague Pete Hodgson earlier of being captured. I accused the member of being captured. The Minister is being led along by a little ring through his nose by the Government Statistician if he thinks that when there is a gap of 2 years between censuses the 6-month difference is absolutely vital. 
Hon Maurice Williamson 
: It’s called seasonal—seasonal workers. If you did it in December you’ve got a totally different set of seasonal workers in different places. 
Hon TREVOR MALLARD 
: That might have been a very good argument in the 1930s; it is probably less of an argument now as our population has changed. Unlike the member I have had some relatively recent experience in doing seasonal work. 
Hon Simon Power 
: Asparagus. 
Hon TREVOR MALLARD 
: Yes that is right—very slow picking of asparagus. I am prepared to say that within most areas there is some continuity of seasonal work. The fact that the Government cannot organise arrangements to make sure that people are properly paid to do that work is probably not quite relevant to this legislation. 
I concur with the comments that my learned colleague Charles Chauvel made with regard to the other remedial provisions. That is a lovely way of putting it. I think this is better described as a rort for an individual that is an abuse of process and something that should be frowned on. My colleague used a long word that I have never heard before but it was explained to me about the role of Parliament and that just as we should not pass a law to imprison— 
Sandra Goudie 
: You mean you didn’t know Trev? 
Hon TREVOR MALLARD 
: No there are plenty of words I do not know. I am sure the member could educate me. The “Orange Roughy” is offering. No I do not want it—no education from the “Orange Roughy” for me thank you. But just as Parliament should not pass laws to imprison an individual my colleague explained to me we should not pass laws to benefit an individual as we appear to be doing now. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I support the previous contributions made by my colleagues and reiterate the fact that the Minister of Statistics has quite clearly explained this Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. It would have been helpful to the House if the Opposition had actually listened to the Minister’s very good explanation and actually read the bill so they understood it. I am delighted that the Minister has brought this bill to the House. 
A party vote was called for on the question  
The Duties of Statutory Officers (Census and Other Remedial Provisions) Bill be now read a second time. 
Ayes 75 
New Zealand National 57; Green Party 9; ACT New Zealand 5; Maori Party 3; United Future 1. 
Noes 44 
New Zealand Labour 42; Progressive 1; Independent: Carter C. 
Bill read a second time. 
In Committee 
Part 1 Statistics Act 1975 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I am very happy to take a brief call on Part 1 of the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. 
Hon Trevor Mallard 
: You’re allowed four calls. 
CHRIS HIPKINS 
: I say to my colleague Trevor Mallard that I am just getting warmed up but give it some time give it some time and we will get there. 
Part 1 enables the census to take place in March 2013. Without this bill the Government Statistician would be in breach of the Statistics Act if a census is not carried out by the end of 2011. The point I want to raise here is that I think this is reasonable legislation. It is not something that the Labour Party would normally be opposed to. It is not something that I would normally be opposed to. I fully understand the circumstances that have made it impossible for the chief statistician to conduct the census this year as required by law but in spite of that I think it is still important that the democratic process of this House is followed. In cases of real emergency where the House needs to act quickly it has done so. This is not one of those cases. There is no good reason why this bill needs to go through all stages in the House tonight under urgency and why the public should not be allowed to have its say through a truncated select committee process. 
I have listened to all of the Government speakers. I have been here since this debate started. We have been through the first reading and the second reading and now we are in the Committee stage and not one Government member including the Minister of Statistics has given us a reason why this bill must go through all stages under urgency. Not one Government member has given us a reason why the bill should not be referred to a select committee for say a week to allow people to make submissions. I do not think there has been a bill that I have been involved with in this Parliament that has gone to a select committee that has not been improved by the select committee process. 
As much as everyone may think that we have covered off every possible avenue one of the wonders of the democratic process is that anybody can have a view on a bill anyone can raise a concern or an issue and quite often they actually improve the legislation as a result. I do not think there is any reason why this bill should not go through that process and people should not be allowed to do that. We could still get the bill passed in plenty of time to let the chief statistician out of the legal requirement to conduct a census before the end of this year. The earthquake that triggered the census not being able to take place occurred in February. It is now August and this is the first time the House is debating this legislation. That is absolutely ridiculous. This could easily have been dealt with before that. 
Section 23 of the Statistics Act currently states: “The census of population and dwellings of New Zealand shall be taken by the Department in the year 1976 and in every fifth year thereafter.” This bill changes that wording and in this case the census will not be taken “in every fifth year”; it will end up being taken in the seventh year after the last census. That does of course raise concerns about the compatibility of the data. 
I disagree with my colleague Trevor Mallard although it is very unusual for the two of us to disagree because I actually accept the Minister’s point. I accept that the timing of the year is quite important and if we cannot take the census every fifth year we should at least strive to take it at a time when the data will be the most comparable with the data of previous censuses. I say to my colleague Trevor Mallard that I am looking forward to his contribution on this issue. I think that taking the next census at the same time of year as the regular census would normally take place is a good thing. This bill allows for that; it allows for the census to take place in March 2013 which I understand was the preferred option recommended by Statistics New Zealand. 
The other option was to move to 10-yearly censuses as the US has done but there are a whole lot of reasons why we would not want to do that. We have a relatively small and in some cases quite fluid population. I think that the 5-yearly census is the one that we should try to get back to. I hope that in every fifth year after 2013 we will continue to take a census. I would like the Minister to address that question. Will the next census take place 5 years after 2013 or will it happen sooner than 5 years after 2013? 
I would certainly like the Minister to answer that question because a lot of Government processes—our democratic and constitutional processes—rely on the census. The most readily cited example is the electoral boundaries. I had this discussion with the Minister of Statistics at the all-powerful— 
Hon Trevor Mallard 
: Hoping to get Pomare into my electorate! 
CHRIS HIPKINS 
: Well there are not many people left in Pomare because Phil Heatley is demolishing all the houses and leaving the land empty so it would not be much of an inheritance. At the all-powerful Government Administration Committee’s hearings on the statistics estimates I raised with the Minister Maurice Williamson the issue of electoral boundaries and he assured me at that time that holding the census in March 2013 will still allow sufficient time for the boundaries to be redrawn in time for the 2014 general election. I am sure that members will be interested in that matter although given that there was bound to be some to-ing and fro-ing between myself and my colleague Trevor Mallard on where the boundaries should go— 
Hon Trevor Mallard 
: Do you want Naenae? 
CHRIS HIPKINS 
: I am quite happy to relieve the member of the burden of representing the people of Naenae. I think that is an area that would fit very well within the Rimutaka electorate boundaries. But coming back to the issue— 
Hon Trevor Mallard 
: They don’t even know how to spell “Rimutaka”. 
CHRIS HIPKINS 
: I tell Mr Mallard that that is a terrible thing to say about the people he purports to represent! 
I come back to this issue of why we are debating all stages of the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill under urgency. We have had the first and second readings tonight and we are now in the Committee stage and I understand we are doing the third reading immediately after that without having given the public even a small opportunity to make comment without having given the select committee an opportunity to receive advice. I can say that this could have been dealt with very quickly by the select committee and it could have gone through the process required. 
One of the reasons why I think this bill should go through the process is that our statistics system is part of our constitutional framework. I think it is quite outrageous that the Government is proposing a change even in this emergency situation that prompted it. It is quite outrageous that the Government is proposing a constitutional change without following any sort of democratic process in doing so. I was concerned about the process that we followed in the House immediately following the earthquake with regard to the emergency legislation that this Parliament passed. I was willing to let those concerns go on the basis that that was a very urgent emergency and Parliament needed to do something. But having said that I think we can learn a few lessons from the process that was followed there. That legislation undoubtedly could have been improved if there had been time for it to go to a select committee and for people to have a say on it. It did not and Labour accepted that because the legislation needed to be passed urgently. This bill does not need to be passed urgently and actually better management on the Government’s part would have avoided the need for this bill to go through under urgency. 
The bill is still not urgent now. We still have until the House lifts for the election to pass this legislation so we have another couple of months. Yet the Government is trying to put it through under urgency this evening. I think that is of real concern. There is no reason why the bill should not go to a select committee. There is no reason why it could not be improved through public submissions and through the select committee having the opportunity to get some advice from experts on the matter. I think that could have been done very quickly. The Minister of course had the regulatory impact statement on this legislation back in April. I think it is somewhat of an indictment on his effectiveness and influence that he has waited until August to bring this bill before the House. When he was confronted with that comment earlier he mumbled something about Bill English. Then all the pennies dropped all the bits fell into place: we understand of course that Bill English and Maurice Williamson are the two closest colleagues in the National Party caucus! So of course we fully understand why this legislation has not come before the House until now. 
Finally this bill should have gone to a select committee. There is no reason for it to be pushed through under urgency. I look forward to hearing the Minister’s answer to the question that I have just raised with him and I look forward to contributing further as the debate progresses. 
Hon MAURICE WILLIAMSON (Minister of Statistics) 
: 
 Just to deal with a couple of the matters that Mr Hipkins raised all we are doing is changing the wording of the Statistics Act 1975. In the wording it says that a census will be held “in the year 1976 and in every fifth year thereafter.” All we are doing is substituting “2013” for “1976”. So yes the wording “every fifth year thereafter” stays in the legislation and therefore there will be a census 5 years on from 2013. 
I also re-emphasise the point that Mr Hipkins gets and that Mr Mallard does not—that is there are different times during the course of a calendar year in which people are distributed quite dramatically differently over the country. For example members of Parliament would nearly always be back in their electorates from halfway through December to halfway through January but would nearly always be stuck here in Wellington if we were to conduct the census some time—I do not know—when the House is not— 
Chris Hipkins 
: That’s the Minister’s problem: he is completely beholden to the bureaucrats. 
Hon MAURICE WILLIAMSON 
: Yes I am beholden to the bureaucrats—that is right! I am beholden to the 4.2 million New Zealanders who like to move around. It is quite a clear problem if we were to take a census at a time other than March. There are also issues with regard to daylight saving. It is also about the enumerators wanting to be at the households where they have to do the drops and the pick-ups during daylight hours. We could not be doing it right now in June July or August. Then we have the Christmas rush and so on. I do not think any great deal of explanation is needed about it. 
The last thing that the member asked was whether I could give him an assurance that the census would allow for the electoral boundaries to be done. Actually that has had tighter time frames in the past. If we think about the census that was conducted in March 2001 we see that boundary changes were made for the 2002 election. It is nearly 2 years: the census is in March 2013 and the election will be sort of November 2014. So there is plenty of time for the Representation Commission to get its work done to get its draft boundaries— 
Hon Simon Power 
: Excellent contribution. 
Hon MAURICE WILLIAMSON 
: Thank you. 
RAYMOND HUO (Labour) 
: 
 Ni hao. I say a big thankyou to the Minister of Statistics for that valuable contribution—that excellent contribution. My colleagues Chris Hipkins Trevor Mallard and Charles Chauvel spoke earlier in a detailed way as to why Labour believes that it would have been very important to have a select committee hearing on the bill. There are lots of important issues that will not be addressed so it is not only about the process but also about the essence of the bill. 
For instance as I said in my first reading speech there is an increasing demand from iwi for statistical information as more Treaty settlements are agreed. Statistics New Zealand as I understand is working with iwi to identify what types of statistics would be most useful for collective management of transferred assets. I have two questions. Given that we are ramming the bill through under urgency and there is no avenue for us to debate this issue at a select committee I would be very grateful for the Minister to enlighten us. I am wondering whether the Minister has ever considered firstly whether the issue could be addressed in consideration of the 2013 census and secondly what types of statistics would best serve Maori to support the management of assets obtained from Treaty settlements. Those are my two questions and I would be very grateful if the Minister could enlighten us. 
CHARLES CHAUVEL (Labour) 
: 
 I say first off that I appreciate the Minister of Statistics taking a call immediately after Mr Hipkins’ contribution in the Committee stage and the bona fide attempt to address the questions that were raised. I said in my earlier contribution that I had one or two questions about Part 1 of the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill and I hope that the Minister will be minded to take a call and answer those questions. 
I suppose the first question asks why the Minister feels he needs separate legislation to effect this change and whether any consideration was given to simply enacting this amendment under the Canterbury Earthquake Recovery Act. On my reading of that legislation it could have been accomplished by an Order in Council under the emergency legislation. Although normally no one on this side of the Chamber would advance that as a preferred option the reality is that at least if that course had been adopted there would have been better scrutiny than this legislation will receive from this process. 
Under the Canterbury emergency legislation there would have been a two-stage scrutiny process. First the Canterbury Earthquake Recovery Review Panel headed by Sir John Hansen would have scrutinised the legislation. Secondly the Regulations Review Committee would have considered the legislation under the grounds of the Standing Orders. Under the process the Minister has chosen the only scrutiny that the legislation will receive is the half an hour or so that we are devoting to it in this Committee of the whole House. So I would be interested in knowing whether the Minister and his colleagues considered using the process they put in place to deal with Canterbury emergencies given that this is—we are told and we accept—a question arising out of such an emergency. At least there would have been that better scrutiny. If not why instead are we here dealing with all of this under urgency? 
The Minister has dealt with one of my concerns because it was raised by Mr Hipkins. It related to the issue of drawing the boundaries for the next election and he said that that has been done on tighter time frames before this. But it would be useful to hear from the Minister about what assurances the Maori Party received concerning the Maori electoral option— 
Hon Rick Barker 
: Yes. What secret deals have been done? 
CHARLES CHAUVEL 
: Well good on the Maori Party for seeking those assurances. I am not attributing anything negative to that exercise but it would be useful to know what the assurance was. I think that members on this side of the Chamber would also be interested to know and to be assured that the Maori electoral option has been preserved safely and will not be jeopardised in its administration by the proposal to move the census forward 2 years. 
Similarly as I mentioned in my earlier speech I ask in response to a proper admission by the Minister that he has canvassed the issue of population-based funding for district health boards with his colleague the Minister of Health what is to be done in order to secure health board funding on a rational basis given the moving of the census forward 2 years. 
The concern I referred to earlier on this part related to the language that is used in the legislation and in the explanatory note. It would be useful I think to have an assurance from the Minister on the record that the deferral of the proclamation process is intended as only a one-time exercise and that it is not intended that the process be done away with by way of an erosion of the independence of the Government Statistician. As was indicated earlier there is a reason for that process. It is important and it exists as a significant feature of the statute. 
Finally it would be useful to have an assurance from the Minister that he is concerned as I am that the apparent breach of the principle in  
Fitzgerald v Muldoon 
 contained in the explanatory note is an accident. 
Dr RAJEN PRASAD (Labour) 
: 
 I am pleased to take a call on Part 1 and to ask a few questions. Ordinarily we would have at this stage of a bill a lot more information. This bill would have gone to a select committee and a whole host of people with an interest in doing the census and in statistics as well as people who use the data would have given a lot of advice. We do not know what that advice would be so I wonder whether the Minister in the chair the Minister of Statistics could explain the implications of deferring the census until 2013 and now having a 7-year gap between censuses. What are statisticians and demographers saying about that change? What kind of adjustments will need to be made to the data so that there is some comparability down the line so that users of the data will have some way of knowing or working out what that is? 
The data sets we currently have go back to 1975 so there is a 35-year data set collected at the same time at regular intervals. But that will be changed for ever in a sense by our going to a 7-year gap and then resuming 5 years after that. I wonder what advice the Minister has received about those changes and what the implications might be. 
More fundamentally a select committee would have given us the opportunity to examine however briefly—and it could have been brought together quite quickly—the modern census so to speak. The Minister said that he has asked some questions about a modern census but he had no answers. What were the questions the Minister asked and what was his thinking about the kinds of parameters a modern census might have? Censuses have not always been the same for the hundreds of years that censuses have been done. But now the technology has changed in this field. The data that is regularly collected in all kinds of ways is also available from different sources now. So what was the Minister thinking about that data? 
Perhaps more fundamentally there is also a move now not to hold censuses but to conduct surveys. Those surveys are almost like a series of cross-sectional studies that tell us what is happening to our population and they are done more regularly. Why has the Minister not taken the opportunity—because it comes quite rarely—to have this kind of thinking done in relation to censuses and census change? There are new methodologies and new ways of using data. With the kind of consultation that we have in mind—and this is why members on this side are opposing this bill—even users of censuses would identify the different types of data that are now required. Here was an opportunity through a select committee to have that kind of discussion. 
My colleague Raymond Huo talked quite a bit about the need for data in the Maori community and appropriately so. New Zealand’s ethnic diversification is now quite advanced but we have only so much data about that. In the last 6 months or so I have been going through data and I can see the holes in that data. Here was an opportunity to reflect on the kinds of data required by our ethnic communities and those who provide services to and engage with them etc. Has the Minister not given any thought to that? What advice has the Minister received about the kinds of data that would help us understand that diversification in greater depth? Maybe the Minister has thought about that. Maybe he can give us some reading on what his thoughts are essentially on different types of methods different types of data and the views of key people out there—not only the experts like demographers and statisticians but also the users of that data. Could the Minister tell us what was their thinking? If there has been any conversation with them then what concerns of theirs have been identified at this stage? We would like to get some idea of that. Finally there is the question of the implications of the 7-year gap. Thank you. 
Part 1 agreed to. 
Part 2 Statutes Drafting and Compilation Act 1920 
CHARLES CHAUVEL (Labour) 
: 
 Thank you Mr Chairman— 
Hon Trevor Mallard 
: What’s your Tahitian greeting? 
CHARLES CHAUVEL 
: Iaorana. The Minister in the chair the Minister of Statistics did not deign to reply to the concerns I raised about Part 1. I hope he will not take that approach to Part 2 given that this is the only scrutiny as I have said that this bill will get. I spoke to the Chief Parliamentary Counsel a couple of weeks ago. He is a fine man and he does a fine job. He told me that he was undertaking a task back in the United Kingdom and that he would be there for some time but that the Government had kindly agreed to facilitate his temporary return to the United Kingdom Public Service by arranging for him to continue in the role of Chief Parliamentary Counsel and for there to be an Acting Chief Parliamentary Counsel appointed in his place. 
If that is the reason that the National-led Government is rushing these provisions of the Legislation Bill through the House then I would have thought it would be incumbent on the Minister and on the Government to advise the House of that fact. There has been no such disclosure and no such attempt to explain that that might be the reason for this apprehended urgency to deal with the provisions in Part 2. I will recap those provisions. They update an antiquated piece of legislation and everybody agrees it is antiquated. It is legislation from the 1920s when Government departments were run in a very different way from the way in which they are run now. As I said earlier the Labour Opposition has no problem in substance with these provisions. We reported the Legislation Bill back to the House from the Regulations Review Committee unanimously and with support after having heard evidence from a number of senior officials former Chief Parliamentary Counsel and the Attorney-General as well. So there is no issue with the provisions themselves. 
Our question is why it is intended that these particular provisions of the Legislation Bill should be severed and brought to the House to be passed under urgency in the way that the Minister has brought them forward dressing them up with the legislation relating to the census in a bill entitled the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. I say well done to the Minister on his imaginativeness; it is always entertaining. But on this occasion it would be nice to know why it was thought necessary to deal with the matter under urgency. 
As Mr Mallard said in an earlier contribution we do not in this Parliament legislate in respect of individuals to their detriment. That would be a bill of attainder or legislation of that nature. It is unconstitutional; we do not do it. But if that principle is correct then also it would be inappropriate to say the least to legislate for the private benefit of any individual unless we were very clear about why that was being done. As I said earlier if that is what is being done here it ought to be done openly rather than in some sort of covert fashion. 
I would like to hear from the Minister about why the urgency is attached to the provisions concerning an Acting Chief Parliamentary Counsel and I would also like to know as would members on this side of the Chamber how these provisions might apply in practice if for example the current holder of the office of Chief Parliamentary Counsel is away for some time. What is the intended tenure of any Acting Chief Parliamentary Counsel? Might we be contemplating quite a long period of that person’s tenure: up to say 2 years? Is that not something that ought to be disclosed declared and debated openly at least in this Committee? As numerous speakers have pointed out this is the only occasion on which that discussion will be able to occur. I urge the Minister to use this one and only opportunity in the process that he has invoked to advise his fellow members of Parliament of the position in respect of this particular part. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I am getting slightly anxious about the habit of this Minister of Statistics—and it appears to be a growing habit and one that is unusual for him to have— 
Hon Member 
: Growing. 
Hon TREVOR MALLARD 
: Yes it is a growing habit. The Minister used to be quite forthcoming in the House. I think it is fair to say that the Minister used to be forthcoming in places other than the House as well. It seems to me that the Minister has lost his tongue. 
Hon Ruth Dyson 
: Michelle Boag had her way eh? 
Hon TREVOR MALLARD 
: Well he has crawled back into his shell. 
Charles Chauvel 
: Perhaps the Attorney-General took it. 
Hon TREVOR MALLARD 
: I will get on to the Attorney-General relatively soon. I was not planning to take a call now but the fact is that the Minister has not answered the questions my learned colleague Charles Chauvel asked on the first part of this bill—the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill—and he has not yet placed on the record his response to the questions I asked him in the first reading debate in relation to the Electoral Act. I am somewhat surprised that the member is not giving those responses and is thereby extending the debate in a way that frankly does not seem absolutely necessary. But it is the responsibility of the Opposition to hold the Minister to account. 
I request or suggest that it would be appropriate for the Attorney-General to make a contribution in this debate. The Parliamentary Counsel Office works under him. I understand he has been somewhat unusually involved in the terms and conditions of employment for the current Chief Parliamentary Counsel in a way that many of us would think would be unwise. If it is correct that an offer was made to have this sort of arrangement developed for an individual for a period of up to 2 years that would be remarkable and it would be good if we did have the Attorney-General in the Chamber in order to explain the position and I hope put paid to what is quite an unfortunate positioning for the chief legal officer of the Parliamentary Counsel Office. 
The other person I am somewhat concerned about is the State Services Commissioner. During my time as Minister of State Services there was an appointment to the position of Chief Parliamentary Counsel but frankly because there were probably 50 or 60 such appointments during that time this one has not stuck in my head. I know that with the Government Statistician there is an unusual arrangement. It is one where the State Services Commissioner has the right to appoint and the normal veto right of Cabinet does not apply. What I am not sure of— 
Charles Chauvel 
: It’s the opposite. 
Hon TREVOR MALLARD 
: It is the opposite. So it is a normal chief executive? 
Charles Chauvel 
: No. Cabinet can invite the State Services Commissioner to help but there’s no obligation for him to be involved. 
Hon TREVOR MALLARD 
: Oh so in this case it is apparently a bit like the Commissioner of Police and the Defence Force where there has been a developing tradition—and I think an important one—of the involvement of the State Services Commissioner in running a process. 
Charles Chauvel 
: Or by the invitation of the Minister. 
Hon TREVOR MALLARD 
: By the invitation of the Minister or in some cases actually by the invitation of the Prime Minister. Certainly the senior police position is one that is done by the invitation of the Prime Minister and it may— 
Hon Simon Power 
: It’s the Governor-General actually. 
Hon TREVOR MALLARD 
: I think the recommendations go to the Governor-General but they go from the Prime Minister as with most chief executives and certainly most of those that I was involved with when I was the Minister of State Services. I effectively signed off those recommendations after consultation with colleagues on the Cabinet committee. We certainly never had the position where we reversed out a recommendation that had come through. That is a matter for notification under the Act and that certainly did not happen. But as my colleague has informed me in the case of the Chief Parliamentary Counsel it is something that appears to be in the gift of the Minister. 
Charles Chauvel 
: It’s not statutory. 
Hon TREVOR MALLARD 
: And there is a question there. I think that raises another issue—that is whether that is an appropriate position and whether in this day and age it is appropriate to have someone who is effectively chief executive of a small but important department of State whose process involves a gifting of a position from a Minister to that particular individual. That is I think the way things used to be done back before 1912. Again I am looking to Simon Power. He does not remember either. There have been some clear processes since the State sector reforms in 1987 or 1986—one of those years. One was the State-owned enterprises and the other was the State Sector Act; it was one of those. There have been clearer processes since that time but we have had a tradition for a long period of effectively the decisions on these positions being made by the State Services Commissioner. 
But that appears not to be the case and I am searching—and possibly my colleague could be drafting as I search—as to whether there is any possibility of importing into this legislation even at this late stage such an arrangement whereby the Chief Parliamentary Counsel has proper process around his or her appointment. 
Can I get some indication from the Minister in the chair the Minister of Statistics as to whether he is prepared to reply to the comments that my colleague Charles Chauvel has made? No—in fact there is no indication that the Minister is alive. I know this has not been the most exciting debate. The Chief Parliamentary Counsel is not quite as exciting as the Government Statistician— 
Charles Chauvel 
: I think it is. 
Hon TREVOR MALLARD 
: Well there is a bit of debate here between two members I respect. If it is just as exciting then why is the Minister in the chair going to sleep when he has been asked to respond on his own behalf or when he could ask his colleague the Attorney-General to respond? I never thought I would be saying that. I never ever thought I would be asking for the Attorney-General to get off his backside and make a speech in this House. The idea that I would ask Chris Finlayson to get off his backside and make a speech is something that feels relatively foreign to me and I am concerned at the very thought that I should be making such a suggestion. 
The next question is this. If in fact the Chief Parliamentary Counsel is going away for a couple of years should the gifting of his—in this case his but in other cases his or her—replacement be in that individual’s hands? Although I view with some disdain the arrangements as to the appointment of the Chief Parliamentary Counsel and the lack of involvement of the State Services Commissioner and the lack of a proper process around these arrangements having had these arrangements the question then is whether it should be appropriate especially for an appointment of 2 years. 
We have had chief executives appointed for 2 years or sometimes shorter times—down to 18 months on particular occasions. If we are having appointments that are so long—2 years—should it be in the hands of the individual to appoint his or her own replacement? At the end of this speech I will give the Minister a chance to answer or I will call on my learned colleague Lynne Pillay to make her contribution. 
Part 2 agreed to. 
Clauses 1 and 2 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 The question now is whether the bill is appropriately titled. I think it is not. I think the title is an indication of a rort. It is called the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. Actually to be fair it should be titled the “Census Deferral Bill” or the “Ability to Appoint Your Successor for a Period of 2 Years Bill” as far as Part 2 is concerned. There could well be a number of better titles for this bill. 
I think part of the title works pretty well. The end of the title has the year “2011”. I think that is appropriate and I think it is pretty much unanimous that we will support that. But I invite the Minister in the chair the Minister of Statistics to consider even at this late stage whether he has a mind to—it is a bit like truth in sentencing; we could ask Rodney Hide whether he had a better name for it—give us a title for this bill that more accurately reflects its contents. 
The CHAIRPERSON (Lindsay Tisch) 
: We are actually debating clauses 1 and 2 not just clause 1. 
Hon Trevor Mallard 
: Oh I could have gone on for longer. 
The CHAIRPERSON (Lindsay Tisch) 
: I am just making it very clear. We will put the clauses separately when it comes to the vote but the question is that clauses 1 and 2 stand part. 
CHARLES CHAUVEL (Labour) 
: 
 I agree with my colleague Mr Mallard— 
Hon Trevor Mallard 
: And that is an unusual thing. 
CHARLES CHAUVEL 
: It is not necessarily a usual thing. But it is correct that the bill is not aptly titled. As I suggested earlier to try to cloak what is being done here in the innocuous title of the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill is to actually obscure what is being attempted. Two things are going on here. 
First of all there is the deferral of the census. As has been said members on this side of the Chamber accept that that had to be done. Our argument is with the process. It should have gone to a select committee for a couple of weeks. We should have heard— 
Hon Members 
: Why? Why? Why? 
CHARLES CHAUVEL 
: Members opposite ask why why why. The tragedy of this is that we have had the current Standing Orders in more or less their current form since 1986 and still we have to educate National on process. We are a unicameral Parliament. Our select committees are the only place where reasonable scrutiny can occur and still we have the question years and years after—25 years after—1986 asking why bother with select committees. Well actually process matters because what it does in the end is assist the Parliament to make better laws. One of the tragedies of the New Zealand Parliament over years and years is that National’s contribution to it has been flawed laws because National thinks always that the end justifies the means. Well it does not. There were very legitimate questions raised during the debate and the discussion around whether the deferral of the census as proposed by the bill was a useful and justifiable thing to do and what the effect of that deferral would be. But we will never know the answers because Maurice Williamson Minister of Statistics knows best and this bill was never going to go to a select committee. That is really what is going on here and the innocuous title of the bill obscures that. 
The other thing that is going on here is what I referred to when I spoke about the position of the Chief Parliamentary Counsel. I make it clear that there is no criticism of David Noble here. He has been a terrific Chief Parliamentary Counsel and I hope he continues for a long time in that office. I think it is an excellent thing if he has been given some development opportunities by way of some further work experience in the United Kingdom provided that proper administrative arrangements are being put in place back at the Parliamentary Counsel Office so that its duties can continue to be discharged. But we do not know anything about that and we never will because again the Minister has not taken a call on those issues. The public and the New Zealand Parliament are not deemed worthy by this Government to have these issues disclosed to them. This is just all about the Government saying it will take the provisions that suit it out of bills then ram the bills through under urgency and basically the public’s right to know be damned. That is the attitude we saw today from the Minister in the chair the Minister of Statistics—that is if he even knows about these arrangements. 
I suspect that one of the issues that might be going on here is that the Attorney-General has made these arrangements and not bothered to tell his ministerial colleague. Otherwise why would we not have heard from the Minister on what surely are proper administrative arrangements for the conduct of the Chief Parliamentary Counsel’s office? So I say that this bill is not well named. [ 
Interruption 
] 
The CHAIRPERSON (Lindsay Tisch) 
: I would like to hear what the member is saying so please calm it down. 
CHARLES CHAUVEL 
: As I was saying this bill is not well named. To talk about the duties of statutory officers when in fact what is going on here is the census deferral without any expert advice or public testimony in a select committee along with the regularising of an arrangement with the Parliamentary Counsel Office which the Minister is very very reluctant to talk about for some reason—if he even knows about it—indicates that calling the bill what it is called is all part of an attempt to cloak it in mystery and subterfuge. That is a real shame because these are matters that should have been openly debated and ventilated. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 The reluctance of the Minister in the chair the Minister of Statistics to take a call in response to the wonderful contributions from my colleagues has prompted me to also take a call. But I want to acknowledge something that was chipped across the Chamber from the other side. It was a rare occasion when Tau Henare said something that was quite funny. I usually do not acknowledge what the member does but he has been at my select committee the Commerce Committee on the odd occasion and he has behaved in a rather mature and sensible way so I want to acknowledge the very very funny statement that he chipped across the Chamber in respect of the “Sensible Census Trust” which he felt would be prompted to react by the disgrace of this Government passing this bill through all of its stages under urgency. I congratulate that member on an amusing little aside. 
The serious issue that all of the speakers on our side of the Chamber have raised is in respect of a bill that has a title like this one—namely the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. Here we are as parliamentarians with duties to undertake our obligations in a particular way and they are being completely ignored. That is why I find the title of the bill somewhat ironic. The fact that the legislation comes into force on the day after the date on which it receives the Royal assent is equally an issue for me because this bill as we know could have been prepared with sufficient time for it to go to a select committee and have all manner of individuals contribute to the discussion on it. 
Hon Tau Henare 
: No there’s no need. We know what it’s about. It’s about counting people. 
Hon LIANNE DALZIEL 
: I have already explained to this Committee and I will explain it again for the member because I know that he is interested in everything that I am saying and he is hanging off every word. The agency disclosure statement of the regulatory impact statement was signed on 6 April this year. I am sorry but is it not August now? How many months is that? April May June July August—that is 4 months ago. What has the Minister been doing for 4 months in order to bring this legislation before us? 
The decision not to hold the census was made in March. It was due to be held on International Women’s Day 8 March and it was deferred for a very good reason. We all agree with its being deferred. Of course we could not hold the census. The census office was completely devastated by the earthquake so the duties of statutory officers and census officers could not be undertaken. I understand the title of the bill in respect of that element but I think we could have had a discussion a public debate about what the alternative was. 
Although the regulatory impact statement talks about three options I think there were in fact only two: the one that the Government has chosen and the other which was to defer it altogether so that the next census would be held in 2016. The Minister has not really described in detail why this particular option was taken and why it had to be done in this manner so that there was no opportunity for any public debate. That is why in an earlier debate on the bill I tried to table a copy of the document titled  
CERA: Residential Red Zone Offers—Summary of Sale Process—draft for discussion 
 which is marked as “Confidential—not Government policy”. Now I have downloaded a whole lot of other documents from the New Zealand Law Society website. Perhaps the Government whip will allow me to seek leave again at the end of my contribution. I have several other documents that are all on the New Zealand Law Society website none of which have been consulted on with any of the people who will be receiving offers from the Government in respect of the red zone. I think it is completely out of order but completely in line with the way that this bill has been approached. 
This bill is entitled the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. The duty of a Government is to consult with affected parties before putting together details of such an agreement and I think it is a tragedy that this Government treats us with such disrespect and does not follow its duties as it should otherwise be obliged to do. 
Clause 1 agreed to. 
Clause 2 agreed to. 
Bill reported without amendment. 
A party vote was called for on the question  
That the report be adopted. 
Ayes 75 
New Zealand National 57; Green Party 9; ACT New Zealand 5; Maori Party 3; United Future 1. 
Noes 44 
New Zealand Labour 42; Progressive 1; Independent: Carter C. 
Report adopted. 
Third Reading 
Hon MAURICE WILLIAMSON (Minister of Statistics) 
: 
 I move  
That the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill be now read a third time 
. Although the Leader of the House has been insisting that I take the full 10 minutes I will not do the full 10 minutes. All I will say—and this is offered by way of a bit of advice to Labour and I genuinely mean it—is that I understand why it digs in on some things; I think it is right for an Opposition to dig in. But this bill tonight does one thing: it changes the date of the census from 2011 to 2013. It does not change the scope of it it does not change the questions that will be asked it does not change the mechanisms or functions and it does not change anything else. 
But Labour dug in tonight to say this legislation should have gone to a select committee. Can members imagine the questions? “Twenty-one-three—is that how you spell 2013? Ah yes. What else could I ask? ” The select committee would be struggling for anything else. I know they got it wrong on the voluntary student unionism bill and the media gave them a smack for it but I advise the members on the other side of the House to pick their fights. This was not one to have a fight on because this is simply about putting a new date on to the statute book because we were committed under the current law to hold a census in 2011. 
I thank my colleagues for the support in getting this bill through the House tonight. I think it is a very good step forward. It will mean that the electoral boundaries can be redone in time for the 2014 election. It means that the Maori electoral option can be conducted. It means that absolutely everything that we were ever planning to do in 2011 will happen 2 years later. Thank you very much. 
RAYMOND HUO (Labour) 
: 
 I listened rather attentively to the contributions from the National MPs on the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. It is fair for me to say that the best contribution was from my Asian colleague Mr Bakshi who just commended the bill to the House without claiming the moral high ground in attacking Labour members. 
For many National MPs when there is a problem there is an excuse. For instance the National-ACT Government has failed to present any plans to grow our economy. They say: “Oops there is a financial crisis worldwide.” There was a 6-month gap or so between when the decision was made not to hold the census and when the Government said “Oops there is urgency.” because without the bill the Government Statistician would have been in breach of the Statistics Act. That warranted the Minister to ram through the bill under urgency without referring it to the select committee. 
It is very satisfying however that in my earlier speech I said that National MPs had built up a very good habit of taking short calls and that they would take short calls during this debate. They have taken turns to take short calls; I cannot be convinced that they have taken this bill very seriously in respect of either its contents or its process. 
The process is very important. It is about the core values of how Parliament operates. That is why I ask members opposite to please exercise some forbearance in claiming the moral high ground on shutting down the democratic process. It is disappointing that the Minister of Statistics—a very willing and able Minister—did not answer some very important questions that were asked particularly those questions of my colleague Charles Chauvel. Again as my colleague Charles Chauvel said this is our only opportunity for some important issues to be addressed given that the bill is being rammed through under urgency. I reiterate that I am not litigating the actual decision but I am left wondering about the constitutional niceties. 
We agree with the policy objectives of this bill but we cannot support the way in which the Government is seeking to rush important constitutional changes through Parliament without giving the public a chance to have their say. 
Simon Bridges 
: I thought this was going to be a short call. 
RAYMOND HUO 
: I say to that member that in my speech at the first reading I said that National MPs had built up a very strange habit of taking short calls. You guys just took turns to take short calls. 
Hon Tau Henare 
: Don’t use “you”. 
RAYMOND HUO 
: Sorry; I apologise to the Deputy Speaker. It is not good enough to try to convince the public that National MPs are very serious about this bill either in respect of its content or in respect of its process. 
During the debate some National MPs said they were shocked that Labour did not support this bill. There are some issues that are very shocking and they could have been addressed in a timely manner if the bill had been referred to the select committee. For instance Statistics New Zealand’s statement of intent for 2011 stated that Statistics New Zealand has “a high proportion of inexperienced staff [which] poses a risk to the production of timely and accurate statistics.” I am sure the public wish to know about how Statistics New Zealand is managing the risks posed by the high proportion of inexperienced staff and what steps will be taken in 2011 and 2012 to recruit more staff with the necessary experience in leading up to the 2013 census. The Minister cannot say that “Oops that’s an operational matter.” and that his job is just to get the bill rammed through under urgency. That is not good enough. It is not fair to Statistics New Zealand and it is not fair to the general public. 
There are some important issues that I wish could be addressed properly. For instance should we hold a census every 5 years or every 10 years? Among OECD countries at least 10 countries hold a census every 10 years. It is also argued by some experts that we could collect data by way of a survey for instance. Although congratulating the Minister on ramming through the 21st bill under urgency under this National-ACT Government I say to the Minister that the general public of New Zealand have just lost another good opportunity. Thank you. 
NIKKI KAYE (National—Auckland Central) 
: 
 I am very pleased to speak on the third reading of the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. I acknowledge the support right across this House for this legislation including National the Greens the Maori Party Tau Henare Simon Bridges and Todd McClay. In conclusion basically everybody supports this bill except for Labour. This legislation is one of the briefest bills I have seen since I have been in Parliament. The purpose of it is to enable the 2013 census to actually happen. 
I just want to briefly traverse the arguments we have heard from the Opposition. Firstly Raymond Huo went slightly off the reservation when he opposed this bill because I saw members opposite in a slight state of shock. Secondly Lianne Dalziel and Pete Hodgson said that the reason they opposed this bill was that it was being passed during urgency. We have been very clear that this is in response to what has been the largest natural disaster that New Zealand has ever seen and that is one of the reasons why we need to defer the census and pass this legislation. Thirdly we heard from Lianne Dalziel that one of the big issues she had with this bill was that the regulatory impact statement was passed in April but the point we have made is that two other decisions had to happen as a result of that: whether to hold the census and the date on which to hold the census. Finally we heard a number of contradictory speeches from Labour. Lianne Dalziel was suggesting 10-year censuses and Trevor Mallard proposed holding the census in December not March. Then we heard the trifecta from Chris Hipkins. He totally disagreed with both Lianne Dalziel and Trevor Mallard. 
Lynne Pillay 
: I raise a point of order Mr Speaker. Four times now we have seen Lianne Dalziel have the indignity of having her name mispronounced. I would ask the member to use it properly. [ 
Interruption 
] 
Mr DEPUTY SPEAKER 
: Points of orders are held in silence. Well the member is in the Chamber and if she felt offended by it—she is shaking her head. 
Hon Lianne Dalziel 
: I am offended! 
Mr DEPUTY SPEAKER 
: It is up to the member to take offence. We will leave it at that. 
NIKKI KAYE 
: We have heard very contradictory speeches from Labour. That is not unusual. 
In conclusion we support this legislation because we believe it is very important to hold a census in 2013. It is very important so that we do not have over-representation or under-representation in our electorates. It is very important that the businesses and the community organisations of this country have accurate information. We support this very non-controversial legislation. I am shocked that Labour is not supporting it. I commend this bill to the House. 
CHARLES CHAUVEL (Labour) 
: 
 The Minister of Fisheries and Aquaculture gave some advice at the beginning of his third reading speech. He said: “Don’t dig in on this legislation.” I will explain just briefly for his benefit why we did dig in. If the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill was about the census only—because the Minister did not address half of the bill; he addressed only the proposal to defer the census—then our criticisms would have been around only the failure to have a short select committee process. 
Members opposite earlier yelled out and asked what we would do in the select committee. There are a number of questions that were ventilated in the debate. Members who have been here for the entire debate will know this. Those questions include the question of what the effect is of moving from a set of data collected over 5-year blocks and then trying to compare that data with a 7-year block. It is a matter of vital importance for the national data mine. We do not know the answer. We have never heard the answer. We do not know the answer to that question. If there had been a select committee process with some experts coming along to tell members of Parliament about the effects of comparing a set of 5-year data and a set of 7-year data on our economic statistics and on all sorts of other information of national importance I suspect that would have been pretty reassuring assuming that the answer was that it would not have a major deleterious effect on the ability to compare those data blocks. 
We would have asked whether it was still feasible to set electoral boundaries on time. We heard from the Minister an assurance that it will be and he quoted two precedents. Again we probably accept that the Minister is well advised but it would have been useful to drill into that question with the advice of the officials. We heard an assurance repeated to us by a Maori Party member and by the Minister that there has been a guarantee that the Maori electoral option will be unaffected. Again it would have been useful to hear the detail of that rather than having to rely just on a ministerial assurance which is all we have. 
Then there is the issue that I raised; the precedent-setting effect of doing away with the proclamation process which puts the setting of the date of the census at arm’s length from the executive. The Minister told us that that provision was not an attempt to set a precedent but again to have been able to record that in a select committee report back to the House rather than simply relying on an offhand comment in the  
Hansard 
 from the Minister would have been much more reassuring. 
As I said the Minister did not address a whole half of the bill. I reiterate that it makes— 
Sandra Goudie 
: A whole half? 
CHARLES CHAUVEL 
: Yes a whole half of the bill I say to Ms Goudie—the bit that relates to the Chief Parliamentary Counsel. As I said earlier we have no argument with the incumbent in that office. He is an excellent Chief Parliamentary Counsel and we have no concerns about the substance of the proposal. Of course it makes sense that the Chief Parliamentary Counsel ought to be able to delegate his powers in this day and age. Of course it makes sense that he ought to be able to have a deputy to act on his behalf in his absence. We supported those provisions in the Legislation Bill. But the question we posed was why we should pluck these particular provisions out of that bill and put them through under urgency. Why do that when it is proposed that the current Chief Parliamentary Counsel be absent from the country for a significant length of time? Why the secrecy? Why does the Government not want ordinary New Zealanders to know what is being done with taxpayers’ dollars in the administration of the office that drafts our laws? That is what I do not understand. If the answer is that this Minister just does not know the answers then he should not have come to the House with carriage of this bill. 
In the end this bill reeks of bad process. The lesson we should have learnt by now in this House is that bad process leads to bad outcomes and that is the reason members on this side of the House have dug in and will not support this bill. 
JOHN HAYES (National—Wairarapa) 
: 
 Thank you for the opportunity to speak in the third reading of the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill. I have to refute those comments by the previous speaker Charles Chauvel. This bill is absolutely straightforward. It will do two things. It will shift the date of the next census to 2013 and as the last speaker just said it makes some very sensible recommendations around the Chief Parliamentary Counsel and delegations during a period of absence. 
There is nothing underhand about this bill. We have had to put up with 2 hours of nonsensical filibuster. If I have learnt one thing in this life it is that saying from Confucius: “When you’re in a hole stop digging.” With those words I commend this bill to the House. Thank you. 
Dr RAJEN PRASAD (Labour) 
: 
 That was quite an arrogant statement from the previous speaker John Hayes—that we have just spent 2 hours doing nothing. National members have been sitting here since the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill was introduced and they are the ones who have treated this House with contempt absolute contempt. Reasonable questions have been asked. National members have not been able to see through a very simple bill and answer the kinds of questions that one would logically ask because there is an opportunity to ask them. In fact National members have come to the House with a proposal and expected us to simply rubber stamp it just because they say so and as if we have no right to ask questions or to have those questions answered. In fact National members have simply taken meaningless calls that last a few seconds. One call was barely two sentences long. 
Simon Bridges 
: This man was born in the first census. 
Dr RAJEN PRASAD 
: That is absolute contempt I say to Mr Bridges. If the member felt strongly about anything he would rise take a call and make his point but there are no points to make. The census is an important activity and we should take it seriously. We should take the opportunity with every clause in every bill that comes to the House to look through it to look beyond it and to ask questions. We expect to have those questions answered. Those things become even more important when there is no select committee process. But no members opposite simply thought that this would be a simple process. They rammed it through under urgency and we are supposed to sit here like I do not know what. I simply say that. 
The Minister in the chair the Minister of Statistics began to simply treat us with contempt. 
Hon Maurice Williamson 
: Be nice. 
Dr RAJEN PRASAD 
: I am normally very nice to the Minister but on this occasion he either did not have the answers or refused to give them to us. Very sensible questions have been put forward by Charles Chauvel this evening—very sensible questions—and they have not been answered. 
I will tell members that the heart of contempt was this: Maurice Williamson knew the reason for the second part of this bill. The Minister knew the reason. It would have been reasonable to tell the House that we have an issue—a delegation is not there or a person is going overseas—and we need to have that provision put in place. But that had to be dragged out of him by Charles Chauvel through questions. The Minister defended himself by saying it was not in his notes. That should have been in the first reading speech and that should have happened but it did not. 
We are not happy with the process this bill has gone through. We blame the other side. National is responsible for the process and it should have run this thing far better than it did. All National members wanted to say to us was that they were disappointed that we were asking questions. 
Hon Simon Power 
: Not angry just disappointed. 
Dr RAJEN PRASAD 
: Well it was stronger than that I say to Mr Power which he would know if he had been here. Actually Mr Power has been here most of the evening so he knows the kinds of questions I am posing. There is contempt from members on the other side. They have not really done their job on this particular bill. Lianne Dalziel and Charles Chauvel have asked very reasonable questions. Those questions should have been answered. 
But the biggest disappointment is that we have not had the opportunity to think through what a census would look like in the modern world and to have a select committee process that would have given us the answers. It was contemptuous not to take that opportunity and it is highly objectionable when National members stand up and say that members on this side of the House are doing the kinds of things they said we are doing. Thank you. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 If anyone was in any doubt about the impact of natural disasters on the psyche the well-being and the functioning of a nation a cursory look at  
Hansard  
for this year would put a stop to it. If one was in any further doubt one would just need to listen to members on the other side of the House and the way they have been filibustering these last 2 hours. The census of population and dwellings scheduled for 8 March 2011 was cancelled because of the 22 February 2011 earthquake. The Canterbury earthquake utterly affected the viability of the census in 2011 so the Governor-General has since revoked the formal proclamation of 8 March 2011 as the census date. The Duties of Statutory Officers (Census and Other Remedial Provisions) Bill responds to that situation and sets in place also the infrastructure and the administration required to run the next census which is scheduled to take place on Tuesday 5 March 2013. This bill amends the Statistics Act 1975 to enact the Government’s decision to defer the census to 2013. Basically the amendment in this bill removes the requirement that a census be undertaken this year. It is a mere technicality. There is no reason to drag this out any further. I commend this bill to the House. 
KANWALJIT SINGH BAKSHI (National) 
: 
 It is my pleasure to take a call on the third reading of the Duties of Statutory Officers (Census and Other Remedial Matters) Bill. This is a non-controversial bill and I commend it to the House. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I will be quite brief as well on the Duties of Statutory Officers (Census and Other Remedial Matters) Bill. 
Hon Trevor Mallard 
: Not more than 10 minutes! 
CHRIS HIPKINS 
: Well I cannot be more than 10 minutes. Mr Mallard is quite correct. This is actually a good bill and it is doing something that the Opposition supports which is moving the census to March 2013. But I have not heard a single reason from any of the National members who have stood up and hurled abuse at the Opposition why this bill needs to be passed under urgency without reference to a select committee. Oh there was an earthquake. So that therefore gives them the opportunity to put whatever legislation through Parliament that they want without following the democratic process and without giving people the chance to have their say on it. I think that is absolutely contemptuous towards the people of New Zealand. There is not a single bill in this House that I have been involved with that has not been improved by going through the select committee process. Yet this Government seems to think that it knows absolutely everything and can learn nothing from listening to the public who might actually have a view on this and therefore it will push this bill through Parliament under urgency without sending it to a select committee and without giving anybody a chance to have a say on it. I think that sums up this Government. They know best; they do not need to listen to anybody else. They can do just whatever they like. They are so arrogant that they can do whatever they like and they do not have to listen to the public of New Zealand. 
Deferring the census until March 2013 certainly makes sense. It is a constitutional decision because the implications of this legislation are constitutional ones. I do not believe that this Parliament or any Parliament should change the constitution under urgency without giving the New Zealand public a chance to have their say on it. That is effectively what this bill does. I see no reason why it should not go to a select committee for further consideration. Labour will vote against this bill not because we do not see that the bill has merit but because we think the New Zealand public should be able to have a say on it. The bill should go to a select committee for further consideration so that people can make submissions the bill can be gone through in some detail and expert advice can be delivered. 
There is no urgency on this matter. Maurice Williamson has had the regulatory impact statement since April which means that if he had been an effective Minister this bill would have been before the House before now. It could have gone through the normal select committee process in that period of time if a competent Minister had been in charge of getting this legislation through the House. Maurice Williamson has not done that so Government members are now trying to make up for their total lack of competence by pushing the bill through under urgency and I think that is a disgrace. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 Mr Speaker— 
Hon Simon Power 
: You have got to be joking. 
Hon TREVOR MALLARD 
: I am seeing a level of anxiety on the part of the Acting Leader of the House and the spectators who have come in to sit behind him. Some of them are looking in a certain state of disarray I might say. I cannot tell whether they are reaching for their Compaqs or their tweets. 
The Opposition supports the bill but abhors the process. It is a sad day when an offer to put a bill through in much much less time than this was turned down by the Minister in charge of the bill—all for the sake of sending it to a select committee for a couple of hours. 
A party vote was called for on the question  
That the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill be now read a third time. 
Ayes 75 
New Zealand National 57; Green Party 9; ACT New Zealand 5; Maori Party 3; United Future 1. 
Noes 44 
New Zealand Labour 42; Progressive 1; Independent: Carter C. 
Bill read a third time. 
Education Amendment Bill (No 4) 
In Committee 
Part 1 Amendments to Education Act 1989 
DAVID SHEARER (Labour—Mt Albert) 
: 
 Labour has supported this bill as it has proceeded through both the first two readings and as it went through the Education and Science Committee. We had a number of very good submissions to the select committee on this bill. Many of them sought some tightening-up of some of the provisions in Part 1. I particularly refer to the Education New Zealand Trust whose submission was presented to us by David Caygill who came to speak on it. But in general with some of the amendments that were made through the select committee process we will be supporting this legislation. 
As I say there are a number of issues under Part 1. A great deal of the bill in effect brings in much of the educational legislation that needs to be tidied up and in a sense put right. It brings it all together. But I think it is worthwhile to touch on the Education New Zealand Trust in terms of Part 1. What was curious for many of us was that the Education New Zealand Trust is a body that represents in many ways the international education providers. We are talking about a sizable industry of more than $2 billion here—$2.1 billion. It has grown very very rapidly. It has a number of components and aspects to it. The feeling from the Government was that rather than the Education New Zealand Trust being more of a representative body it needed to be changed into a Crown entity. In effect what the Government is doing in this particular case—which is somewhat curious given the trend of the Government to try to downsize—is creating a Government agency or entity. Education New Zealand as it will now be called will be a Crown entity; it will add to the Government bureaucracy. 
The question that came about in the select committee was whether this was a positive move or whether it was too heavy-handed on the part of Steven Joyce the Minister for Tertiary Education. As Mr Caygill pointed out there was no stated need to make this change. Although the trust did not oppose the change as such it said: “Education New Zealand Trust is reluctantly supportive of Part 21 of the Bill.” It also went on to say in its submission: “At no time has the Trust been made aware by the government of any deficiency in its performance or area for improvement that would explain this proposal.” To the Education New Zealand Trust it was somewhat of a mystery why this change is taking place. It is as I say quite a major change. It establishes a Crown entity to manage and oversee an area of work where there does not seem to be any problem. The old adage “Why fix it when it is not broken?” seems to apply in this particular case. 
The trust went on to say in its submission that it agreed with the desirability of ensuring coordination between various activities such as the work of the Ministry of Education of Trade and Enterprise and of many of the other providers. But again there is nothing really in this Crown entity that gives us any confidence to believe that it will be able to do the job very much better than the trust itself. The long-term risk that the trust sees in this proposal is that the new agency “being subject to government direction may fail to maintain the necessary confidence and support from the industry.” I think that is a very valid concern. At the moment in some ways the industry has a stake in the trust performing its duties in the way that the industry believes that it should do. In fact the industry may actually lose that trust and that direct ability to influence the new Crown entity as it comes into being. 
The other issue that was brought up—and it was not really adequately answered by the Crown—was the question of the enforcement aspects of this Crown entity. Will it be able to enforce better standards on the part of the many providers of international education in New Zealand? The answer is actually no. We would like to think that it would do so but it is likely that it probably could not. Although we are broadly supportive of the shift from the trust to the Crown entity—well let us put it this way; we are not opposing it—we are not convinced that the Government has put up a very good case for this entity to come into being. 
One positive thing about the move is the fact that the new Crown entity will effectively pick up in total the staff of the trust. Those staff will be effectively transferred to the new Crown entity. That will at least provide a smooth transition and a continuation of the services that the trust currently provides and that hopefully the entity will be able to take over. 
New Zealand is quite unusual in the world because at the moment we do not have a body controlling—“controlling” is probably the wrong word; coordinating and governing—international education in New Zealand as part of its Government. We are quite unusual because we do not have that but I am not sure whether making this move will necessarily enhance the standing of Education New Zealand or enhance the international education market in New Zealand. It may do so particularly with regard to perhaps the Asian area which for some years now has been the growth area for international education in New Zealand. It may give some of those Governments a little more confidence that the new Crown entity is under the Government but in terms of the entity’s basic responsibilities and actions I am not sure whether that will be the case. 
In conclusion I say I wanted to make those remarks in the debate on Part 1 about an area that I think is of the greatest concern. It is not something that we have gone out to oppose. I do not think that the case has been made adequately for the transition to a Crown entity; I think that the analysis was inadequate. That is not a sufficient reason for us to oppose this particular part in the legislation and we will support it. However I do think that we will keep a very close eye on monitoring the actions of the new Crown entity particularly with regard to the way that it goes out seeks obtains and secures the confidence of the industry—the plethora of different providers that have attracted the large number of students who come into New Zealand as part of this very valuable industry. 
STUART NASH (Labour) 
: 
 I am following on from David Shearer who obviously had an amazing contribution to make having been part of the Education and Science Committee. Like David I have a few concerns about this move. Education is obviously a very important export earner for New Zealand. It brings in a lot of dollars and I think it is one of those things that flies under the radar a little bit in the sense that not many people are aware of the good work that is done by our education sector in promoting New Zealand in a number of ways. For example I have heard many stories—well not many; a few stories—OK one story about people who were educated in New Zealand. They came over here got a good education— 
The CHAIRPERSON (Eric Roy) 
: I am sorry to interrupt the member but the time has come for me to leave the Chair. 
Debate interrupted. 
Sitting suspended from 12 midnight to 9 a.m. (Thursday)