Volume 649 Week 84 - Tuesday 2 September 2008(continued on Thursday 4 September 2008) 
Volume 649 Week 84 - Tuesday 2 September 2008(continued on Thursday 4 September 2008) 
[Volume:649;Page:18345] 
Tuesday 2 September 2008 
( 
continued on Thursday 4 September 2008 
) 
Te Roroa Claims Settlement Bill 
In Committee 
Preamble 
Hon TAU HENARE (National) 
: 
 Normally with these sorts of bills because they are momentous in a number of ways the Opposition is given an opportunity to sit down with the Minister or the Associate Minister and receive a briefing. We are still waiting for that briefing. Funnily enough yesterday I happened to pass the Hon Michael Cullen the Minister in charge of Treaty of Waitangi Negotiations and I must say a pretty damn good one. But he said to me on passing—and he looked very pale—“Oh have we given you a briefing on the Te Roroa bill?” and I happened to say “No but it’s all right; we’ve come to expect that sort of treatment by the present Government.” 
We see here an attempt to put right a wrong that happened not 100 years ago not 50 years ago but about 9 months ago or around that time when the Government could manage to cough up only $9 million and it was just not enough. The people told the Government that it was not enough. The Maori Affairs Committee was told that it was not enough. There were issues to deal with about not only the quantum but some of the valuations and some of the returning of taonga had to be sorted out. So now we are back because of the prodding of the Opposition and because of the sterling work of the select committee. I think that individual members of this House have been back and forward to the claimants having a few words about the settlement and finally the claimants have an opportunity. 
National will support the bill but not without a few kicks and a few punches here and there because I think the treatment not only of Te Roroa in this whole shambles but also of the Opposition party which has had no briefing whatsoever has been pretty terrible. In fact many Opposition members had to ring the claimants and the claimants’ lawyers to find out what was going on. If that is the way this Government wants to run things well it is no wonder that the jug has boiled over and they will be out of there within a couple of months because the country wants better from a Government especially when it is dealing with a Treaty settlement. 
This might not be the biggest Treaty settlement but for the people up there it is the biggest thing since sliced bread. So those are the opening salvos and I say “Let’s get on with it.” 
CHRISTOPHER FINLAYSON (National) 
: 
 Members should consider the history of this matter. The Waitangi Tribunal reported on this issue in 1992. Between 1992 and 2005 the tribe and the Crown were engaged in periodic negotiations. Then on 20 December 2004 the party signed an agreement in principle. In 2005 shortly before Christmas Te Roroa ratified the Crown’s initial settlement offer and entered into a deed of settlement. Then on 14 February 2007 the bill was introduced and on 1 March 2007 we had the first reading and the referral to the Maori Affairs Committee. 
In the 3 years I have been in this place I have never been more moved by submissions to a select committee than I was by the submissions made by the good people of Te Roroa in Dargaville shortly before Easter last year. Several people were genuinely upset at the history of the matter and at the way the matter had played out and the majority of the select committee were very concerned—I know my friend from New Zealand First certainly was and we three in the National Party were. 
When the bill was being dealt with in the Maori Affairs Committee we were very concerned about durability. The Government did not talk to Opposition members—we heard nothing. As the Hon Tau Henare said this morning we have continued to hear nothing. Any information about improvements to the settlement proposal has been obtained from the claimants. I think it is a tragic state of affairs when a senior Opposition MP is spoken to in such a dismissive way by the Minister in charge of Treaty of Waitangi Negotiations Dr Michael Cullen as he wandered through the Beehive last night. It is simply unacceptable. 
We in the Opposition regard these Treaty settlement bills as being of paramount importance. To quote the words of Isaiah I say that we are “undoing the heavy burdens of the past.” To be treated in such a cavalier smart alec fashion by the Minister in charge of Treaty of Waitangi Negotiations is simply unacceptable. His performance over this legislation makes Mark Burton look competent. 
Hon Georgina te Heuheu 
: Maybe that’s going to far. 
CHRISTOPHER FINLAYSON 
: Well they are tough words but tough words need to be said about the legislative history of this bill. 
We still await a formal briefing. It is unacceptable that we have been treated in this way and more important it is unacceptable that Te Roroa has been treated in this way. This matter has not been treated as an important historical Treaty settlement. It has been reduced to the level of commercial bartering so that the Government can push this legislation through. Will it be durable? Well we will have to wait and see. But New Zealand deserves better than this kind of legislative shambles and Te Roroa deserves better. 
We will have a good look at the bill as we go through the various clauses. As Mr Henare said we know having spoken to the tribal claimants that by a majority the trust board has indicated that it wants the settlement to proceed. Therefore we will support the legislation but we are very unhappy at the way the iwi has been treated and we are not impressed with the way we have been treated. We still do not know the detail other than what we have managed to glean from the various claimants. This is not the way Treaty settlements should be conducted. A higher standard is required and the Minister should be disgusted with himself. 
Hon GEORGINA TE HEUHEU (National) 
: 
 I am very very pleased the Te Roroa Claims Settlement Bill has now found its way to the top of the Order Paper and that we are here this morning to help progress it. My colleague Chris Finlayson talked about the tenure the gestation of this bill from 1992 till now. That is a long long time for any iwi to be waiting for their settlement to be brought to a conclusion. As I say I am very pleased for the iwi that we are here this morning. My colleagues are correct: I know that Tau spent quite a lot of time on the phone yesterday—as did Chris and I—chasing down claimants and lawyers to see whether there had indeed been an improvement on this bill. Obviously if the bill has made its way to the top of the Order Paper there must have been an improvement but we do not know what it is. So that we on this side of the Chamber are not talking slightly in the dark I wonder whether the Minister in the chair the Hon Mita Ririnui might take a call now and let us know about the improvements. 
Clearly National has indicated it will support the bill and we do that on the basis that claimants have indicated that they are happy with it—at least they are willing to accept the improvements and see this bill progress. But in my view at the end of the day it is up to the Government and the Minister in charge of the Committee stage now to enlighten us and to officially formally tell us what those improvements are. As I say I am waiting for the Minister to take a call. Hopefully it will be when I resume my seat. 
We are debating the preamble to the bill and in the couple of minutes that I have left I want to talk about the background to the claim which of course is set out in the preamble. After all the political to-ing and fro-ing between the Government and ourselves as there has been this sort of interregnum when nothing has happened for the last however many months—is it 7 months? 
Chris Tremain 
: At least. 
Hon GEORGINA TE HEUHEU 
: —well since we were last in the Chamber debating this matter—we need to remind ourselves why we are here now. 
These people Te Roroa are an ancient people with a history that was clearly a proud history until of course they came up against the settlers the Government not long after the Treaty was signed when things started to turn to custard for them. So yes we can talk about the last 15-odd years but we must remember that the events that give rise to this claim originated way way back not too long after the Treaty was signed—indeed their own people signed that Treaty. We must not forget as I say in the political shots that are fired between ourselves in this Parliament that there is a sad history behind this claim and it has been made even more tragic in my view by the delay that has been a feature of this settlement for the last 15 years and particularly for the last 7 to 10 months when the Maori Affairs Committee clearly indicated that we were not happy with the settlement that had been offered to Te Roroa. The committee members went to hear the submissions and it was so very very clear that little of the hurt that these people have carried for all of these years had been atoned for. 
I agree with my colleague Chris Finlayson that the hearing of the submissions was an eye-opener really. One could feel the hurt the submitters were carrying and the Government offered the settlement that it did—a settlement that indeed one would almost say that rather than becoming the springboard for the development of Te Roroa it will likely become a bit of an albatross around their neck. As I say National will support this bill but we would like to know the detail of the improvements. 
Hon TARIANA TURIA (Co-Leader—Maori Party) 
: 
 Tena koe Madam Chairperson. Tena tatou katoa. When we come to the Te Roroa Claims Settlement Bill we recognise the wider framework in which all Treaty settlements take place and we say it is vital that we get that right. Inevitably when we think of those who are putting forward claims—we recognise the statutory registration threshold which is that claimants must be Maori and then cite the actions of the Crown that were prejudicial in relation to the Treaty of Waitangi—we think also of all those who have signed up to those claims and their descendants. 
In the case of Te Roroa I will never forget one particular submission to the Maori Affairs Committee that was put forward by Te Roroa Manawhenua Trust and Te Roroa Whatu Ora Trust. That submission suggested that Te Roroa will not be in a strong financial position following settlement but the trusts were prepared to concede that following 14 years of difficult negotiations the settlement reached was the best possible deal available in the circumstances—I repeat in the circumstances. 
Those circumstances were brought to the world’s attention last year by a damning report by the United Nations Committee on the Elimination of Racial Discrimination. The United Nations committee was concerned about our Government’s routine ignoring of Waitangi Tribunal recommendations and noted that “such arrangements deprive claimants of a right to an effective remedy”. Those are circumstances that are tabled in the House on an ongoing basis—the views of the people that the Treaty settlements process is an exhausting abusive process that grinds claimants into a position of defeated acceptance. But as Te Roroa Manawhenua Trust and Te Roroa Whatu Ora Trust reminded the select committee this was the best possible deal available to Te Roroa in the circumstances. 
What made that submission stand out in my memory forever was a simple statement followed by a list of names a roll-call three and a half pages long. The trustees wished to note the people who have passed away during this period; that was the full extent of their submission. The sense of absolute defeat and emptiness is very palpable. Ka maumahara matou ki a ratou—we will always remember them. What is even more poignant of course is that we know that list will be longer now. The cost to Te Roroa both at a financial level and in relation to the suffering and loss of its people has been really high. 
We are mindful that those costs extend outside the boundaries of its rohe. The select committee report noted the late introduction into the debate of concerns from the Hokianga Whanau Hapu Land and Resource Claims Collective. The collective’s view was that the Te Roroa settlement would jeopardise its claims and it sought an assurance from the select committee that such an injustice would not take place. The Office of Treaty Settlements confirmed that during negotiations it had consulted groups that have claims inside Te Roroa’s area of interest but that the work on claims in the surrounding areas was incomplete. Although the committee noted the situation was unsatisfactory it stated that no amendment to the bill could improve it. So again an injustice continues. 
What happened to Te Roroa must not be relegated to history. The record of continued breaches by the Crown against Te Roroa is a matter for public record and we must all learn from that. The House must take responsibility for the Crown’s confiscation of the Te Kopuru block and the destruction of Ngati Whiu and Ngati Kawa communities. The House must take responsibility for the unconscionable seizure of the multibillion-dollar flora and fauna of the Waipoua Forest. The House must take responsibility for the Crown’s theft of Te Roroa wahi tapu its attempted destruction of the Waipoua community its violation of taonga and its persistent failure to listen to Te Roroa’s grievances. Those are not matters that can rest easily on the nation’s conscience; neither should they. 
Given the extent seriousness and continuation of the Crown’s breaches against Te Roroa the Maori Party has placed on record its immense dissatisfaction with the quantum that is under proposal. Our recommendation has been that the quantum must be increased sufficiently to allow Te Roroa to purchase both Kaharau and Te Taraire and also to ensure the durability of the settlement. The Crown refused to include Kaharau and Te Taraire in the Treaty settlement or to find a way in which they could be included. I want us all to reflect on what such obstinacy does to the soul of a people. 
Kaharau is a large area that includes burial caves— 
The CHAIRPERSON (Hon Marian Hobbs) 
: Do you want to call again? 
Hon TARIANA TURIA 
: Sorry. 
The CHAIRPERSON (Hon Marian Hobbs) 
: That is all right. 
Hon TARIANA TURIA 
: Madam Chairperson. 
The CHAIRPERSON (Hon Marian Hobbs) 
: The Hon Tariana Turia. 
Hon TARIANA TURIA 
: I have been here long enough to know I should have sought the call again. Te Taraire is an area of similar cultural significance to Kaharau and both areas are located at Waimamaku. They are the sites of critical cultural redress and the failure to see them as such compromises the settlement. Not only was nothing included in the quantum for the express purpose of buying back those areas but many in Te Roroa found the suggestion that they be forced to buy back their own wahi tapu including koiwi of their tupuna and wakatupapaku insulting offensive and degrading. 
We have been particularly concerned about the negative impact that poor settlement processes have on the durability of any settlement and about the deep rifts that have arisen because of the effect of flawed processes on overlapping claimants. The processes have often created enormous harm within tribal relationships that have existed for generations. In the case of Te Roroa we think back to the submissions of Patrick Paraone Welsh of Sheena Ross for the Moetara whanau of the Rev Daniel Ambler who is a former tribal negotiator and of Gary Hooker Te Roroa’s tribal historian and mandated negotiator. We think of the overwhelming sadness that they expressed in their submissions. It was their considered opinion that given the strength of claimant objections to being forced into a full and final settlement the Crown should abandon the use of that phrase. 
Will Ngakuru told the select committee that for the members of Te Roroa and the descendants of Ngakuru Pana the settlement would never be full and final until the burial places at Kaharau and Te Taraire were returned as was the wish of their tupuna. Seven words in that submission said it all: “We agree to this Bill under duress.” “Duress” means to be coerced to be forced into something beyond one’s will—is that really what we want our Treaty relationships to be? Another way forward was recommended by Professor David Williams who suggested that rather than go down the path of unseemly haste with the obsession of time frames and deadlines all parties should engage in a longer conversation. 
These settlements are truly what one could understand to be heartbreaking. I have been listening to National members and the speeches that they have made not only on this matter but on other settlements and they may yet get their day. But the parameters for Treaty settlements were in fact set by National. So should the opportunity present itself let us see whether National can do any better than this Government has done. We in the Maori Party are always torn between our love for the people and our respect that their wishes be heard and our absolute contempt for the way in which the policies and procedures used to negotiate settlements with hapu and iwi have been so flawed. Na reira tena koe Madam Chairperson. Tena tatou. 
PITA PARAONE (NZ First) 
: 
 A tena koe Madam Chair tena tatou o te Whare nei. Tena hoki koutou o te hau kainga ara Te Roroa mena kei te matakitaki mai mena hoki e are taringa mai tena koutou tena koutou. I acknowledge my relatives of Te Roroa who may be watching or who may even be listening to the debate on this bill concerning their Treaty claim. 
Once again I say that I have a vested interest and I say that specifically for those who belong to a group called the One New Zealand Foundation. Since the introduction of this bill they have hounded me with a number of emails suggesting that because of my vested interest I should not be participating in the debate on this bill. But I have declared that interest and my participation in this debate will always be focused on the issue and not on my own personal interest. I say that to those principals of that organisation. 
I also want to have it recorded in this Chamber that I take exception to members of that organisation making contact with my father—when he was alive—to question my whakapapa in relation to the claimants of this bill. As a consequence I have now ceased to correspond with or even talk to the person to whom I always made myself available to discuss these issues. He knows who he is but I am not going to give him the privilege of having his name recorded. 
Having got that off my chest I will speak to the preamble which I think gives a very good historical background to this claim. It highlights the importance this iwi has put on their wahi tapu. I think that it is the issues surrounding wahi tapu that have given cause for some disquiet for those who have negotiated on behalf of Te Roroa. The sites particularly some that are outside the purview of the bill have given some cause for further discussion between the representatives of Te Roroa and as I understand it the Crown. The issue of quantum has certainly been a debating point for the people of Te Roroa. The fact that some of these wahi tapu are located on land that is outside the settlement quantum is what many of Te Roroa are concerned about. 
I should say that this bill has some historical significance not only for Te Roroa but for the laws of this land. It was the report that emanated out of this claim that gave rise to legislation being introduced that excluded land in private ownership from any settlement quantum. For that I think this bill will certainly have some significance in the history of the legislation of this House. 
I also need to say that I found it a little bit disturbing that some of the original negotiators were at odds with their colleagues on the negotiation team. Given that point of difference the bill has proceeded along its way. I am not going to question that because I think it really is an issue for the people of Te Roroa. 
Hon MITA RIRINUI (Associate Minister in charge of Treaty of Waitangi Negotiations) 
: 
 I stand to take a very brief call in response to many of the comments that have been made by members from the National Party in relation to the level of consultation that they claimed they did not have from the Ministers in charge of this bill. I am mindful that we are actually on the preamble of Te Roroa Claims Settlement Billand I want to thank the New Zealand First member Pita Paraone for his contribution in terms of the accuracy of the preamble regarding the treatment of the Crown and its agencies toward the people of Te Roroa over shall we say 160 years or so. 
I am standing for the benefit of National Party members to apologise if in any way at all they found the communication between me and them to be insufficient. But I say to the Hon Tau Henare that he is aware and I am aware that the Maori Affairs Committee will be meeting at 1 o’clock today for 1 hour and I will take that opportunity to give him a formal apology. I know he has some issue with the select committee sitting at that time but I am sure that he will make himself available as will his colleagues the Hon Georgina te Heuheu and Christopher Finlayson and at that time we can have an in-depth discussion around that particular matter. Their points are made very clear and I will respond to them formally at that time be they on the agenda or not. 
The matters around the issues that were raised by way of submissions and were discussed by the select committee in terms of the quantum and the adjustments that have been made to satisfy the claimant groups of representatives of Te Roroa I am sure we can discuss further along in the Committee stage of this bill when we get to the part where we actually talk about the quantum. I just wanted to clarify those points. Thank you. 
Hon TAU HENARE (National) 
: 
 I thank the Minister Mita Ririnui for his humble apology. I accept the apology now because I do not think I will be at the Maori Affairs Committee this afternoon. Because we are in urgency one has to take what one gets when one can. 
I put these questions to the Minister though. The preamble to me means the beginning. It is the start of something. If we look at the preamble we see that 188 years are contained in 12 pages. That works out to about 16 years per page. If we look at the preamble we see right at the end of the 16 pages that it does not give us an indication of what is new. There is a little chapter missing if members understand my drift. So what is new? How much more? I know the Minister will address the quantum later on. Where are the changes? What about the valuations? This is the problem with not being given a briefing—we do not know what we are supporting or opposing. 
I think we have a very unfortunate situation. Like I said 12 pages cover practically 188 years of tribal history in a nutshell—little paragraphs here there and everywhere that I think should actually be put in a leather-bound book and be put in the archives for ever and a day. The preamble to a settlement bill is I think one of the most important parts. It does not matter what the quantum is and it does not matter who did what to whom. The preamble tells a story in a way that will enable people in subsequent generations to get a snapshot of what Te Roroa is. 
I want to digress a wee bit and offer my support to my whanaunga Pita Paraone after the abuse he has taken from the One New Zealand Foundation. I say to him: “Any time you want some back-up matua you know where we are.” 
It is really important when we are doing these things to get off on the right foot so I ask the Minister to take another call and finish the preamble as it should be finished. He should tell us what is new why we are here how much more there will be and where the changes are. He should also tell us about the valuations. He should do this only if he wants to—I will not die in a ditch over it. 
I make one final point and that is regarding the comments from the co-leader of the Maori Party about National. I suppose my comments are that we should not forget where we all started. By that I mean that I was a member of New Zealand First—and a very proud member of New Zealand First—back in the day. 
Pita Paraone 
: Then you got lost. 
Hon TAU HENARE 
: I may have got lost but I am found again—as I think the song “Amazing Grace” goes. But I say that members should not forget that Tariana Turia was also a Cabinet Minister in this Labour Government. Kia ora. 
Hon GEORGINA TE HEUHEU (National) 
: 
 I will take another brief call to again mention the preamble. My colleague is right: the preamble is a very important part of the Te Roroa Claims Settlement Bill. Te Roroa have the advantage of a very comprehensive Waitangi Tribunal report and much of what was traversed and found in that report now finds its way into the preamble in the bill before us. 
It would be great to read out some of this narrative in full for the benefit of those who are not in this place and who do not readily have access to the background to these settlements. I mentioned in my earlier contribution that Te Roroa are an ancient people with a proud proud history—a history that quite soon after the signing of the Treaty of Waitangi started to become blighted by their interactions with the settling Government of the day the Maori Land Court and the legislation from those days which has a lot to answer for in terms of breaches of the Treaty that have been found. 
Te Roroa once a proud community of various lands in the north came to find themselves virtually alienated disjointed and lost—lost from their whenua. That loss—as I also referred to earlier—still shows itself today in the way the people recount their history and share their aspirations for what they want to do into the future and it was so obvious to the Maori Affairs Committee when it went north to hear them. 
Although the claim that immediately gives rise to this settlement in the bill before us is more recent Te Roroa actually began petitioning the Crown from the late 1870s over the Crown’s failure to provide appropriate reserves once the Crown had made up its mind to go in and by various means deprive Te Roroa of their landholdings. As I say there is a long history here. Further petitions were made into the early 20th century—in 1907 and so on—and between 1908 and 1912 approaches were again made to Parliament. This like many claims has a long history of petitions other claims court cases and approaches to various Parliaments over a long long period of time. That is why it is so important that New Zealand continues on its way to settling these longstanding injustices. I am sure it has been quite hurtful in a way for Te Roroa over the last 12 months to witness the sudden burst of energy that has come into the process driven by Dr Cullen and to see other tribes move forward—move ahead even—with the settlement of their claims with Te Roroa still languishing on the sidelines. 
So yes the Minister in the chair the Hon Mita Ririnui might like to be all tidy and wait for us to move to the next part but we are on the preamble and we are in a sense talking in the dark. The Minister did not brief us on the improvements to the Te Roroa Claims Settlement Bill. If the Minister had we would not have been on the phone yesterday chasing around the country. One of the claimant negotiators had been out of New Zealand for a month. Fortunately I managed to get him. He had just hopped off the plane from the United States and we were able to get some details. So I say to the Minister in the chair he should tell us now. 
CHRISTOPHER FINLAYSON (National) 
: 
 I endorse everything my friend Mrs te Heuheu said and I believe we could move very quickly through the Committee stage and third reading of Te Roroa Claims Settlement Bill if we had some answers. But I will make a few preliminary points. First I join Mr Henare in what he said about Mr Paraone. We have been receiving volcanic emails from the One New Zealand Foundation. That is not helpful and I think that what the foundation did to him was totally unacceptable. It is a source of some regret that there are people in this country who do that sort of thing. 
The second point I will make is that the Associate Minister generously indicated that he would be prepared to apologise for the insufficiency of consultation. Well as Mrs te Heuheu said where is the insufficiency? There was no consultation. 
The third point is that we want to move on from a culture of complaint. If I set out the detail of what I understand to be the position and the Minister in the chair the Hon Mita Ririnui could condescend to confirm some of it we will be able to move through the Committee stage very quickly. As I understand it in about June this year the Minister in the chair and the Hon Shane Jones had a visit to Dargaville and a further Crown offer in settlement of the claim was made. I further understand the proposal is that the offer be implemented outside the Treaty claims settlement process. That is the first point and I ask the Minister in the chair whether that is correct. 
The second issue dealing with the consequences of the Minister’s visit to Dargaville involves the increase in quantum. The settlement provided for about $9.5 million. Our understanding as a result of discussions with various claimants is that it has increased to around $15.5 million to enable the purchase of certain farms. I ask the Minister whether he can confirm that and confirm what the farms are. 
The next element is that the Crown indicated it would purchase and vest in the iwi the portion of the Kaharau wahi tapu of about 1400 to 1500 acres of land known as “Bob’s” and we would like to know whether the property has been purchased. 
The final element is that there would be a continued discussion between the parties regarding the Te Roroa taonga the burial chests that are held by the Auckland Museum. If we are dealing with those elements it is good because it does deal with certain key issues that the Maori Affairs Committee was very concerned about but I would really like to know before we move into the other parts of the bill just what exactly the components of the settlement are. 
I say to the Government it should not worry about an apology or about a mea culpa. Let us move on from there. Let us look at the substance of the amended offer so that we can get through the Committee stage get through the third reading and ensure this bill is signed into law as quickly as possible. 
Hon MITA RIRINUI (Associate Minister in charge of Treaty of Waitangi Negotiations) 
: 
 I take the member’s point and I think that in the interests of moving on and getting a closure motion on this particular part of the Te Roroa Claims Settlement Bill in respect of the preamble it probably is important to highlight some of the changes that have been made. I think it is also important to say first that these improvements as we might classify them did not require an amendment to the settlement legislation. 
As the member pointed out he was of the view that an ex gratia payment had been made in respect of the deferred properties that Te Roroa had expressed an interest in. As the member knows and as members of this Parliament are aware a number of issues were highlighted by Te Roroa throughout the negotiations and the select committee process and we discussed these in some depth in our deliberations. The issues related to certain wahi tapu as they were classified and there was a desire by Te Roroa to have their history in relation to those properties acknowledged in a more tangible way—and I mean by that to have those properties wherever possible returned to them. Steps have been made through my colleague the Minister of Maori Affairs to allow that to happen. And yes there is an ex gratia payment of about $6 million to allow Te Roroa to purchase a particular property that is identified in the deferred properties schedule. 
I reiterate that these improvements do not require an amendment to the legislation. I think that if we had had to go down that track we would have set the settlement negotiations back by some time. Through the foresight of Ministers and in particular the current Minister in charge of Treaty of Waitangi Negotiations the Hon Dr Michael Cullen better ways of doing things were discussed and resolved. To that end I take the member’s point that it is important to highlight this for the benefit of the Committee and in the interests of time but I am glad that he does not want an apology because I do not do that very well. Thank you. 
Preamble agreed to. 
Part 1 Purpose of Act acknowledgements and apology interpretation provisions settlement of claims and miscellaneous matters 
Hon GEORGINA TE HEUHEU (National) 
: 
 I thank the Minister in the chair the Hon Mita Ririnui. Obviously we had the information but it is good to get confirmation from him. It is also good that the decision was made to make improvements to this settlement in a way that did not delay the settlement through having to have a change in the legislation. We find that a great improvement from where we found ourselves some months ago having to write a minority report on this settlement. We are very pleased that on the advice and affirmation of the claimants and now the official indication from the Minister we are able to say without any demur that we support the settlement. 
My colleague made a comment about the apology. Of course the apology is hugely important to Te Roroa. We have now seen these apologies in the House over a number of years. The apology here follows the apology that has been part of previous settlements. The few words in clause 8 state: “The Crown profoundly regrets its breaches of the Treaty of Waitangi and its principles as detailed above and seeks to atone for those breaches.” I have always been fascinated by the way in which those few words mean so much to claimants. For me they have always underpinned the burden of injustice that claimants have carried for nearly 160 years—the burden of loss not only in physical terms but also in human terms. While all of this has dragged on over generations and into the current generation our old people have passed on without seeing any redress or any indication from the Crown represented by whatever Government of the day that wrongs were done and wrongs needed to be atoned for. So the apology in its preciseness is important to claimants. 
The apology is also important to us because it indicates that in a sense the Crown is endeavouring to restore some of its own honour. Of course by the actions of the Crown and of successive Governments from the 1840s onwards the Crown has not only been in breach but has also been without honour. It has been in a place without honour and that is not a good place to be. All of us here now in this Parliament in our collective passing of laws represent the Crown on behalf of New Zealand. So to be without honour in the way we have behaved and acted towards a group a tribe—whanau hapu iwi—or any New Zealander for that matter and in this respect in relation to the particular settlement of Te Roroa is not a good thing. So the apology is important to them but it is also important for us as representatives of the Crown in this House that the apology is made that it is acknowledged and that it is meant. Then we can put behind us a part of our history that none of us here today were responsible for. No New Zealander today was responsible for the hurt but all New Zealanders want to feel that if the honour on their behalf has been lost or crushed then that honour is restored. Today we move on behalf of the Crown to have our own honour restored and to help to restore the honour of Te Roroa as well. That is very very important. 
CHRISTOPHER FINLAYSON (National) 
: 
 I will just take a call to talk very very briefly about the Supplementary Order Paper that seeks to amend a couple of clauses. We totally agree with it. Clause 14 of course has to be amended in that way because there is a new way of recording settlements in the Treaty of Waitangi Act 1975 and we have no problem with that. We also have no problem with the amendment that inserts new clauses 82A 82B and 82C after clause 82. It simply inserts additional clauses relating to the alteration of place names and the clauses follow the model of the Affiliate Te Arawa Iwi and Hapu Claims Settlement Bill. So that is all good technical and sensible. 
I just have two questions for the Minister in the chair the Hon Mita Ririnui and I would be most grateful if he would answer them. Then I think we could just move through the remaining time in the Committee stage very quickly. The first issue relates to the deferred selection properties. Can the Minister give the Committee an indication of the date at which the properties are to be valued? Will it be December 2005 or some other date? I have a concern about that issue because of the delay in dealing with this matter and the possible increase in land values that has happened over the last couple of years. So if the Minister could deal with that it would solve a bit of a problem I have. 
In relation to the second issue I am grateful to the Minister for his confirmation to me of the way in which the settlement is to be implemented but I ask whether he could perhaps explain to the Committee what the impacts are on the Tainui and Ngai Tahu ratchet clauses where the Crown provides settlement redress outside the Treaty settlement process. Is it accounted for in triggering those ratchet clauses? I am not quite sure about that. So if the Minister could provide some answers to those questions—very simple questions—I am sure we could move on very quickly and get through the Committee stage. We must get this legislation signed into law. 
PITA PARAONE (NZ First) 
: 
 Tena koe Madam Chairperson. I think it would be very remiss of any member of New Zealand First currently in the Chamber not to speak to this part of the bill and in particular to the clause where references are made to the Treaty of Waitangi and more important—as quoted in the bill—to its principles. I do not need to reiterate what our concern is but in terms of reading the actual clause itself one can easily suggest that it is implied that previous clauses actually outline the principles. I do not believe that that is the case; I certainly went through the previous clauses and they do not outline the principles. I will quote from clause 8: “The Crown profoundly regrets its breaches of the Treaty of Waitangi and its principles as detailed above and seeks to atone for those breaches.” Again I take the opportunity of inviting the Minister in the chair to articulate what those principles are. However having said that we know that we are required to make some reference to them because they are actually included in the apology. 
Hon Georgina te Heuheu 
: Well there’s no bill if you don’t do it. 
PITA PARAONE 
: Well that is the argument but it is not beyond the ability of this Parliament to rectify that concern anyway. That member perhaps perceives herself as becoming the new Minister—I do not know; I will not go down that line. My apologies Madam Chairperson for digressing but I just wanted to point that out and to be consistent with the contributions that New Zealand First makes in regard to these bills. 
I also agree with the previous speaker; we do not have any concern about the Supplementary Order Paper and the suggested amendments submitted by the Minister. In fact we believe that the amendments actually give clarity to clause 82. I will also take the opportunity to make reference to the definitions in clause 11 “Meaning of Te Roroa”. As it reads “(1) Te Roroa—(a) means the collective group composed of—(i) individuals descended from 1 or more Te Roroa tupuna; and (ii) individuals who are members of the groups referred to in paragraph (c)(i);” which are “Te Roroa Ngati Kawa Ngati Whiu and Te Kuihi;”. 
I refer to this clause and do so because of the allegations made by One New Zealand about my right to participate in this debate. One of the original claimants on behalf of Te Roroa is a first cousin to my father; his mother and my grandmother are two sisters. So in view of the Maori perception of genealogy and relationships that provision makes me a link by whakapapa to Te Roroa but I am not a beneficiary in terms of this definition of who Te Roroa claimants are. I just want to clarify that point. Suffice it to say New Zealand First has no difficulties in terms of Part 1 of the bill. 
Hon TAU HENARE (National) 
: 
 Can members remember going to the dentist when they were kids? You know they had those horrible dental nurses in schools— 
Hon Members 
: Oh! 
Hon TAU HENARE 
: Well not dental nurses but dental clinics—sorry. And we used to have the feeling that we could either do things the easy way or the hard way. Well we can do this bill the easy way or do it the hard way. 
There was a question by my colleague Chris Finlayson about how the ex gratia payment of $6 million impacts on the ratchet clauses in the Ngai Tahu and Tainui settlements. I am sure the brother-in-law has the calculator out right at this moment. But it is an interesting question that I think the Minister in the chair the Hon Mita Ririnui might want to explore if he wants to go down the easy track. He might wish to focus his mind on that issue as we move on this settlement—and I congratulate the Government on moving at pace on other settlements and agreements in principle and signing deeds of settlement in the rush before the election. But the question remains of how now that the quantum has increased that has affected the total dare I say fiscal envelope or multi-year appropriations and how it affects the ratchet clauses in the Ngai Tahu and Tainui settlements. 
So that is the easy way. The hard way is that we draw this process out a wee bit. And I would not want to do that. I am not known in this House to be a filibuster— 
Hon Clayton Cosgrove 
: Spell it! 
Hon TAU HENARE 
: P-h … That is a serious question and I hope the Minister can give us a steer. I am not expecting him to give us a policy statement on the quantum or on the Ngai Tahu and Tainui ratchet clauses but I ask him whether there has been any thought on how it impacts on any other settlements and on the ratchet clauses in both those two settlements. 
Hon GEORGINA TE HEUHEU (National) 
: 
 I want to take a call just to make some comments on the observations that were made by our colleague across the Chamber Pita Paraone who of course and rightly so always feels compelled to raise the issue of the principles of the Treaty of Waitangi and I in turn always feel compelled to make some comment on his raising that issue. Of course these claims are brought under the mandate or brief of the Waitangi Tribunal which has to look at a claim to see whether it breaches the principles of the Treaty of Waitangi. That notion or measurement is to be found in the Treaty of Waitangi Act 1975. As I say it is the measure by which the tribunal must measure all the claims. So of course when we come to settle a claim there has to be some acknowledgment in there that that claim has been well founded in that there has been found to be a breach of the principles of the Treaty of Waitangi. Aroha mai I feel sometimes for New Zealand First and for our associates across the way who still seem to be in the dark after all these years as to what the principles of the Treaty of Waitangi are. 
Pita Paraone 
: Tell us! Tell us what they are. 
Hon GEORGINA TE HEUHEU 
: First of all there is the principle of good faith—the duty upon the Crown to negotiate with claimants in a spirit of partnership and good faith. Secondly there is the principle of protection. I can go through these but really I would have thought that after that party has been in Parliament this long supporting settlements as it does—unlike ACT which used to and probably still does oppose everything to do with Treaty settlements— 
Hon Clayton Cosgrove 
: Rodney’s got the tan now. Rodney’s got the spray-on tan. 
Hon GEORGINA TE HEUHEU 
: That might make a difference as to whether ACT supports a Treaty settlement. It probably will. 
Hon Clayton Cosgrove 
: It’s a bad spray-on tan. 
Hon GEORGINA TE HEUHEU 
: Bad or not we wait with anticipation to see whether ACT will support this Treaty settlement. 
But coming back to New Zealand First I say that I would have thought for a party that considers itself despite its numbers a big party equal to National and Labour that after all this time someone there might have taken the time to comb through the Court of Appeal and Waitangi Tribunal decisions because the principles are to be found in the judgments and the reports of both those organisations. As I say I have talked about the principle of the Crown acting in good faith and in the spirit of partnership towards claimants. That is an underlying one. This settlement is meant to embody those principles and that is why earlier I talked about the apology. That is why it is important that reference to the principles is here so that we all know and New Zealanders know that yes this claim has been properly investigated and yes a breach of the principles of the Treaty of Waitangi has been found. That phrase was integrated into legislation back in 1975 by that member’s relative probably the Hon Matiu Rata— 
Pita Paraone 
: Yes. 
Hon GEORGINA TE HEUHEU 
: —yes—who came up with that phrase because as we know the Treaty is in English and in Maori and if we were to say “the Treaty” people would ask which Treaty. So using the phrase “principles of the Treaty” enables the tribunal to look at both versions and distil from both versions what the underlying principles thoughts and thinking of the signatories to the Treaty were at the time. So aroha mai to our colleague in New Zealand First. He should not worry; the principles are there. They are talked about constantly particularly in the Waitangi Tribunal reports because they have to be. The Waitangi Tribunal has to set out how it has found a claim to be well founded because it is in breach of the principles of the Treaty of Waitangi. So those principles are easily gleaned if the member were to take the time along with his party to find them. 
The question was put that the amendment set out on Supplementary Order Paper 236 in the name of the Hon Dr Michael Cullen to omit clause 14 and substitute new clause 14 be agreed to. 
Amendment agreed to. 
Part 1 as amended agreed to. 
Part 2 Cultural Redress 
The question was put that the amendments set out on Supplementary Order Paper 236 in the name of the Hon Dr Michael Cullen to Part 2 be agreed to. 
Amendments agreed to. 
Part 2 as amended agreed to. 
Part 3 agreed to.  
Schedule 1 agreed to.  
Schedule 2 agreed to.  
Schedule 3 agreed to.  
Clause 1 agreed to.  
Clause 2 agreed to.  
Bill reported with amendment. 
Report adopted. 
Real Estate Agents Bill 
Second Reading 
Hon CLAYTON COSGROVE (Associate Minister of Justice) 
: 
 I have great pleasure in moving  
That the Real Estate Agents Bill be now read a second time 
. The Real Estate Agents Bill has its origins with ordinary Kiwi consumers. They have written to me and to others in droves expressing their frustration about how the current complaints and discipline regime is being operated by the Real Estate Institute of New Zealand. They are frustrated by the current regime’s lack of accountability openness and transparency and about its complete lack of independence from the industry. 
I have also heard from many honest decent and honourable real estate agent professionals who are tired of their reputation being tarnished by a few unscrupulous members—more than a few recently—of the industry. Under the current system the only disciplinary body with any independence from the industry and with any power to suspend or strike off registered agents and salespersons is the Real Estate Agents Licensing Board. However the board receives complaints only if they are referred to it by the Real Estate Institute itself and indeed this seldom happens. According to information provided to me by the institute only 10 of the 583 public complaints it received between 2004 and 2007 were referred on to the licensing board. This bill will correct that situation by providing rigorous robust protection for Kiwi consumers. 
The new authority will provide independent oversight of the industry. Where agents deliberately rip off consumers the bill will provide appropriate sanctions and penalties. Most important it will also provide an avenue for consumers to seek redress in the form of compensation. I have been criticised by some both in this House and in other places for exposing real estate agents who have ripped people off but I make absolutely no apology for doing that. I have always said in every press statement I have made—and they are on the record—that the vast majority of people in this industry are honourable fair-minded good professional honest people. This Government will not allow though the reputation of the vast majority of agents who are as I have said decent and professional to be tarnished by those who abuse the trust of consumers. 
The Justice and Electoral Committee received over 1300 written submissions and heard directly from over 700 people. Nearly all I have to say were from the real estate industry and I welcome the industry’s impressive level of engagement. The committee also heard from consumers affected by the actions of unscrupulous real estate agents and from Consumer New Zealand which fully supports the aims and objectives of this bill. The committee has reported back to the House with recommendations that address the concerns that have been raised and it has enhanced the bill by improving and clarifying certain provisions while not altering the key reforms therein. The Government supports those recommendations. I was pleased to note that the majority of submissions supported the new independent authority and supported the enhanced protections for ordinary consumers as they seek to buy or sell their most valuable asset their house. It was also pleasing to note the Real Estate Institute’s recent comments on the bill. In a press statement 
on 30 July 2008 the president Mr Cleland stated: “We support the independent complaints authority and the increase in penalties.” 
We on this side of the House are determined to provide robust protection in this area for decent hard-working Kiwi consumers. The question though is whether the National Party will continue to oppose consumer protection. The National Party of course did not do anything to improve the real estate industry whilst it was in Government and it should be noted that National did not even support this bill’s referral to a select committee so that New Zealand consumers and real estate industry members could have their say. The question is: why? Even now when the Real Estate Institute itself has had somewhat of a positive change of heart in respect of this bill I ask what the National Party will do now. Will it continue to support leaving consumers exposed as they put their biggest asset—their house—at risk or are we about to witness yet another flip-flop from National? I sincerely hope that sense is prevailing over there and that it will be the latter option but we will soon see. 
I turn now to the key recommendations made by the select committee. The committee has recommended amending the commencement date so that the Act will come fully into force 1 year after its enactment. I propose to amend this provision through a Supplementary Order Paper to 14 months after the Royal assent which will allow more time for the establishment of the Real Estate Agents Authority and for the industry to gear up for these reforms. It has always been the Government’s intention that the necessary industry knowledge and experience will be available—that is common sense—on the authority and the disciplinary tribunal and I welcome the committee’s recommendation that the bill be amended to specify industry representation on both that authority and tribunal. 
For the avoidance of doubt I intend to bring forward a further amendment through the Supplementary Order Paper to make it explicit that for first-term appointments to the authority and the disciplinary tribunal the Real Estate Institute will be consulted. I have reassessed the experience requirements for real estate industry licences and I intend to bring forward an amendment through the Supplementary Order Paper that will increase the requirements from 2 years’ industry experience in the previous 10 years to 3 years’ experience. 
The committee is concerned that introducing a new transparent complaints and disciplinary regime will lead to a surge in complaints. This may be the case. Consequently it has recommended allowing the Real Estate Agents Authority to establish as many complaints assessment committees as will be necessary in order to ensure that complaints are investigated and expedited in a timely manner. The committee has also recommended that both the authority and the complaints assessment committees should be able to investigate allegations on their own initiative. This will allow proactive investigations where there are allegations of unsatisfactory conduct or misconduct and I welcome that recommendation. 
Many industry submitters supported strengthening the bill’s compulsory continuing education requirements. The Government agrees with the committee’s recommendation that the completion of ongoing continuing education requirements be a condition of licence renewals. This will raise industry standards. 
One of the major wins for consumers in this bill is the right to seek adequate redress. The committee has recommended that the disciplinary tribunal be able to award up to $100000 in compensation. This reflects the significant financial harm that disreputable agents may inflict on consumers. 
Concerns have been raised that the requirement for a review of the employment status for salespersons has the potential to create too much uncertainty within the industry at a time when it will be required to deal with a whole new regulatory regime. Therefore I will put forward an amendment through the Supplementary Order Paper to remove this requirement. 
The committee has made improvements to provisions relating to the duties imposed on real estate agents. In particular it has recommended that the ability to cancel sole agency agreements after 90 days should apply only to the sale of residential property as commercial and rural properties typically take longer to sell. The committee has also recommended ensuring that the cooling-off period cannot be used to avoid paying an agent commission if the agent negotiates a sale during that time. 
Many within the real estate industry have been concerned about the effectiveness of the auction provisions in the bill. After further consideration on this issue and taking into account the steps already taken by the industry to address the risks posed to consumers when buying and selling real estate at auction I intend to bring forward amendments through the Supplementary Order Paper that will remove from the bill the provisions regulating the conduct of auctions. 
In conclusion I say that this bill has the protection of the consumer at its heart. Kiwi consumers as they seek to buy or sell their most valuable asset—their home—have demanded a regulatory regime overseeing the process that they can be confident is fair open transparent and accountable. They have demanded that. If things go wrong then there should be a system they can rely on to deal effectively with rogue agents and to compensate them for any losses. This Government has listened. It has listened to the very good recommendations of the committee and others. 
Hon Tony Ryall 
: You have not. 
Hon CLAYTON COSGROVE 
: The member should have a look at the press statements. The Real Estate Agents Bill will provide the protection and confidence that Kiwi consumers are demanding. It will also support good honest agents who do indeed—as I have always said—comprise the majority of this industry. The select committee process has added value to this bill. Its recommendations reflect the views of the majority of the committee and I welcome them. 
I thank the hundreds of submitters and the highly paid lobbyists very expensive as they are who made submissions to the committee and approached their task diligently. I also acknowledge and thank the Green Party and New Zealand First for their work and support in ensuring that this bill achieves the benchmark that has been set by our communities and consumers for openness transparency accountability and independence in the real estate industry. I have much pleasure in commending the bill to the House. 
CHRISTOPHER FINLAYSON (National) 
: 
 Minister Clayton Cosgrove is certainly not Theodore Roosevelt who used to say that he would walk softly and carry a big stick. This Minister yells and screams but in the end carries a twig because Supplementary Order Paper 243 indicates there will be many changes to this bill that will water it down and change it. I must say that many of the changes proposed make quite a lot of sense. 
Hon Clayton Cosgrove 
: Will you support the bill? 
CHRISTOPHER FINLAYSON 
: I will come to that. I say to the Minister he should put some Sellotape over his mouth and sit there quietly and listen because he may learn something. 
The first point I want to make is that I thought the Justice and Electoral Committee worked very well on this bill. I had some real concerns because of the number of submissions that we had received. As the Minister said we received about 1300. I thought it would be pretty chaotic to try to deal with all those submissions. But generally I thought the select committee worked very well indeed. We met in Auckland and in Wellington. We dealt with submitters by videoconference and also by telephone. By and large the submissions were very good. But I do say and perhaps it is applicable not only to this bill but also to some other bills that standard form submissions were generally most unhelpful. I did not derive much assistance at all from a standard form 15-page submission that may have been generated in some head office. When I asked certain submitters particular questions on particular aspects of the submission I was disappointed to find on occasion they had not even read their own submission. My advice to submitters is that if they make submissions—and we on select committees as we all know derive a great deal of benefit from the select committee process—it is helpful to make the submissions reasonably short and focused on particular points. Standard form submissions were unhelpful. 
The chair of the select committee and the committee clerk entered into an arrangement whereby submitters were grouped together and I thought that that procedure worked very well indeed. Generally there was good discussion and good debate as we teased through the various issues. At the end of the day my concerns about the way in which the select committee would work given the number of submissions were not borne out. I thought it went pretty well indeed. Although it is late in election year and perhaps Lynne Pillay would faint if she heard praise from me I would say I thought the chair did a reasonably good job certainly in comparison with her performance over the Electoral Finance Bill which as the president of the Electoral Commission says has a chilling effect this year on the electoral system. 
Let me say something about the Real Estate Agents Bill. As the Minister said it creates an independent real estate agent’s authority. This body will be responsible for overseeing licensing complaints discipline the general enforcement processes and importantly providing information to consumers. The authority will have very wide investigative powers and widened powers to order penalties and the Minister has mentioned some of those and various other remedies. The bill creates an independent disciplinary tribunal to deal with serious cases referred to it by the authority and in that respect the bill mirrors to a large extent the kind of procedures introduced to the Lawyers and Conveyancers Act. The authority will be able to cancel licences and to award compensation. The authority will represent complainants before the tribunal and importantly establish a public register of real estate agents and sales people recording any breaches of standards because that of course is important. 
The bill removes certain regulatory functions from the Real Estate Institute of New Zealand and removes the requirement for compulsory membership. It makes people convicted of dishonesty offences ineligible for licences. It increases entry requirements and requires licensees to undergo certain professional development training. That is the kernel of the bill and the National Party certainly is in favour of improvements to the Real Estate Act but it continues to have some very grave concerns about this legislation. I will go through those now. 
The first concerns the transitional period which as the Minister said is set out in clause 2. Certain sections come into force on the day after the date on which the bill receives the Royal assent. The rest of the Act comes into force on a date that is 1 year after the date it receives the Royal assent. The Minister indicated this morning that Supplementary Order Paper 243 which he will introduce will extend that period from 12 to 14 months. I still think that is too short. The Lawyers and Conveyancers Act was passed in 2006 and it had a 2-year transitional provision. It is only now coming into force following the intensive work undertaken by the New Zealand Law Society. When dealing with new codes of conduct for barristers and solicitors and new structural arrangements that that legislation introduces and so on it is no easy task. There will be major structural changes to the way in which the real estate industry is to be regulated on the day after this Act comes into force. We continue to maintain our concern about the relatively short transitional period especially compared with the Lawyers and Conveyancers Act. 
The second concern we have relates to the bureaucracy especially the complaints assessment committees the costs of which we are concerned will be passed on to the consumer. We have no problem in principle with the idea of complaints assessment committees but there are a great number of complaints that do not even get to the threshold because they are so minor. Our concern is that the cost of setting up what could be three or four complaints assessment committees will be excessive. 
The third concern we have which came through many of the submissions before the select committee is that property management is not included although in fairness to the Minister it was acknowledged that there is an agreement to review and to address issues of property management at a later date. It could well be that will proceed fairly quickly although I do not think the Minister addressed the issue in his second reading speech so that needs to be addressed. 
The fourth point is that the Minister made a couple of sensible comments about auctions and certain provisions in Supplementary Order Paper 243. I must confess that in my quick reading of it I had not picked it up but certain provisions of the Supplementary Order Paper will delete references to auction requirements. I think we are talking about clauses 136 to 141. It removes provisions relating to auction requirements. I think it is high time that the Auctioneers Act 1928 was reformed so perhaps I will look at that more closely in the Committee stage. 
Fifthly the experience required for a licence has been increased to 3 years in the previous 10 years and we are not so sure that that is the right way to go. We think it should be 3 years in the previous 5 years but we can look at that at the Committee stage. 
There are still problems with this bill. I have problems with the ability of lawyers to be engaged in real estate work. I think lawyers should be lawyers and real estate agents should be real estate agents. Lawyers get themselves into trouble when they start mixing professions in this way but that is not a party view—it is a personal view—and that will probably go through anyway. It is contained also in the Lawyers and Conveyancers Act but it is not good. So some concerns with this bill remain particularly in regard to the relatively short transitional period. Although the bill is greatly improved on the bill as introduced to the House and although the select committee certainly did a great deal of work on it the bill remains inadequate so National will continue its opposition to it. 
Debate interrupted. 
Business of Select Committees 
Meetings 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I seek leave that notwithstanding Standing Order 195(1)(c)—and this is pursuant to a unanimous agreement of the Privileges Committee this morning—the Privileges Committee have the power to meet on the evening of Wednesday 10 September. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The member has sought leave. Is there any objection to that course of action being taken? There is none. Leave is granted. 
Real Estate Agents Bill 
Second Reading 
Debate resumed. 
CHARLES CHAUVEL (Labour) 
: 
 I am pleased to take a brief call in the second reading debate of this extremely important and useful piece of consumer protection legislation the Real Estate Agents Bill. The purpose of the bill is a very good one. It is to deliver on the Government’s promise to bring accountability transparency and openness to the real estate sector and those three things are sorely needed. Legislation has been in place for some time and it needs to be updated with the interests of the consumer in mind. This legislation does that. It establishes a very good independent complaints system it will protect consumers and it will support honest real estate professionals who constitute the vast majority of the real estate industry. The bill will put an end to the industry’s self-regulation. It introduces a range of important new consumer protection measures including compensation for consumers who have not been well served by the system. 
The Government believes that reform of the real estate industry is sorely needed. Buying a house may be the biggest single financial decision people make in their lifetime and they need to have full confidence in the professionals who help them make that decision. In that regard this legislation is part of the suite of consumer protection measures that has been so ably pioneered by this Government including Ministers such as Judith Tizard and Lianne Dalziel. One thinks of the Reserve Bank of New Zealand Amendment Bill (No 3) which brought in prudential supervision requirements for non-bank deposit takers and the financial providers and financial advisers legislation which is about to be reported back to the House from the Finance and Expenditure Committee which I have the honour to chair. 
I acknowledge the robustness of the select committee process. I would like to pay tribute to the Green Party and the New Zealand First Party because they played an incredibly responsible role in supporting a fair process at the select committee. 
I would also like to thank those who made submissions to the select committee. This point was touched on by the earlier speaker. Really we were I think in a position where the process could have gone either way. There were intemperate debate and anger involved in the process following the introduction of the bill. Lynne Pillay my Labour colleague chaired the committee with enormous sensitivity. I remember the hearing we held in Auckland which many many members of the industry attended. They were grouped very logically as far as their submissions to the committee were concerned. They were treated with respect and they responded in kind so that we got the maximum benefit from what they had come to say to the committee. I think they went away feeling that they had a proper hearing from us which is a very important part of the process. 
In that regard I note there has been some criticism of some of the submitters. It has just been said that some of them simply filled out a standard form and spoke to it. Well I think we have to make allowances for the fact that to many people the select committee process is a bit of an alien one. It is not necessarily the easiest one to engage in. I think that those of us in Parliament who are used to dealing with the process every day underestimate the mystery that ordinary people sometimes encounter when they want to interact with Parliament’s processes. Yes it is true that some people filled out a standard form submission and that when they were asked particularly technical questions—cross-examined—by certain members they did find it a bit hard to respond. But those of us who took the select committee process seriously tried to move beyond the written form submission and talk to those who came before the committee about their experience of the industry and tried to work out how we could deliver back to the House the best bill that it was in our power to deliver. I think we have done that. The report of the committee speaks for itself. 
I would also praise the measures that are set out in the Minister’s Supplementary Order Paper 243 because I think that taken with the select committee report they really do comprise a suite of measures that will make this industry into one that consumers can have real confidence in and one that the vast majority of real estate agents out there who are honest and hard-working can also feel a great deal of confidence in. 
I thank the officials for their assistance. It was always extremely timely and extremely helpful and when assistance was required on tricky technical matters it was really on point. I will speak a little bit more about that later. 
In conclusion I want to express a bit of regret at the position that seems to be being set out by the National Party on this legislation. I have had a look at National’s minority report such as it is in the commentary on the bill and it is quite apparent when we look at the Supplementary Order Paper that the Minister has tabled that every substantive concern raised by the National Party in that minority report has been addressed. It is simply not right to say that an increased transitional provision of 14 months for the hard stuff if you like in the legislation is not long enough. It makes no sense to compare the real estate industry with the legal profession and any comparison between the Lawyers and Conveyancers Act and the Real Estate Agents Bill is inapt. We are really talking apples and oranges here. It is quite clear that 14 months’ lead-in time for some of these complex matters is more than enough as far as reforming the industry is concerned. Consumers should not have to wait any longer than that and it is a real shame that the National Party wants to make them do that. 
As to the complaint that this is bureaucracy gone wild that is just nonsense as well. I hope that those who espouse that excuse are ashamed of themselves. There is no bureaucracy gone mad here; there is simply an adequate complaints mechanism being set up to make sure that consumers have the protection they need. Yes it will cost a bit of money but probably not a whole lot more than what the current system costs. The costs that will be passed on to those who participate in real estate agent transactions will not be much greater but we will have a far better system to protect those who participate in those transactions. For anyone to say that that is not a desirable goal is a real shame. 
Finally with regard to the issue of property managers as the previous speaker acknowledged the Minister will put in place a review. We heard some evidence on that point. I think that the select committee members by and large were persuaded that there was merit in looking further at the issue of whether property managers should come within a comprehensive regime. There are issues of scope in terms of including them in this legislation but there will be a calm and measured review of that issue. That is appropriate I think given the evidence we heard. 
Here we are with this minority report from the National Party which maintains its opposition to what is very good consumer legislation. It is spurious opposition—it really is. National must be a party that does not actually care much about the interests of consumers; it maintains opposition just for opposition’s sake. It is just like the so-called six principles for opposing the emissions trading scheme—absolute nonsense. This is very good legislation and it ought to be progressed with speed. 
KATE WILKINSON (National) 
: 
 I appreciate the opportunity to rise and speak in the second reading debate on the Real Estate Agents Bill. When the industry itself wants reform and modernisation—it has been asking for reform for some 10 years—when all the parties to a greater or lesser extent and in a reasonably non-partisan way support such an opportunity for positive change to the industry and when consumers want reform and modernisation of the industry how then can such a meal be made out of this legislation? 
The bill went to the Justice and Electoral Committee for scrutiny and I appreciated the opportunity to sit on that select committee during that scrutiny and certainly enjoyed that experience to a certain extent. The bill went to the select committee for scrutiny under the Minister’s banner of vilification of an industry of his having to “drag land sharks kicking and screaming into the spotlight” and to “drop the hammer on them”. I suppose we then have to wonder whether it is any wonder that such a meal has been made of this legislation. 
The select committee process was as expected. We had many submissions. Some submitters were given a couple of minutes; some were given 20 minutes or even more. I do not need to elaborate further on this for people to be able to guess which submitters were given a considerably longer time to submit and which ones understandably felt short-changed. However I echo the concerns raised by my colleague Chris Finlayson regarding the standard form submissions. They were not particularly helpful especially when it appeared that some submitters had merely ticked the boxes without even knowing the substance of their own submission. But after such vilification one can understand their concern to protect their livelihoods. 
It is pleasing that we have a Supplementary Order Paper produced by the Minister that is certainly an improvement in certain respects. There are some 70-plus amendments. Admittedly it is not of the scale of the emissions trading scheme bill which had over 700 amendments; and again it is not of the scale of the meal breaks bill which had a sneaky amendment not even related to the original bill. But we do now have an improved piece of potential legislation. 
I want to make it clear that National supports absolutely the purpose of this bill: “to promote and protect the interest of consumers … and to promote public confidence in the performance of real estate agency work” by “regulating agents” “raising industry standards” and “providing accountability through a disciplinary process that is independent transparent and effective.” We support absolutely the purpose of this bill. We welcome an update of the real estate regulatory framework and so does the industry. We welcome the need for strong consumer protection and strong consumer confidence and so does the industry. However what we do not welcome is an unworkable bureaucratic regime that will add costs to consumers without enhancing their confidence in an industry that like most industries does have some bad players but where the majority are not bad. 
This reform should have been welcomed by all. It should have brought the real estate industry with it into the 21st century. After all that is what everybody wants. But instead this is a missed opportunity. For no matter what reason can be attributed to how this bill has been handled it is a missed opportunity. Certainly some of our original misgivings have been addressed both in the report back from the select committee and also in the Supplementary Order Paper—such as concerning the removal of the 5-year review of the employment status of salespersons. But other misgivings have not been addressed. Property management is still excluded and when we look at the failures of Blue Chip and others it makes one wonder why it has still been excluded. 
Lynne Pillay 
: It’s outside the scope. 
KATE WILKINSON 
: I appreciate that a review has been promised but this is a bill about real estate and property management is an integral part of real estate. This is a bill that is actually tailored to residential real estate and even then it does not really take into account commercial real estate industrial properties and property management. We accept that property management may be outside the scope of the bill but then again KiwiSaver was outside the scope of the meal breaks bill. But we think it is somewhat ridiculous to have a real estate bill that excludes one of the very ingredients of the real estate industry namely that of property management. 
Real estate involves not only buying and selling property; an important part is property management. This Government appears to believe that property managers pose less risk than real estate salespeople. The institute has informed us that it believes that one in five complaints relates to property management groups and we heard throughout the submission process that the two latest claims—in fact the only two claims for quite some time—on the fidelity fund have related to property management not real estate agency sales work. 
Back in 2003 the Real Estate Institute advised the Minister that it was concerned about property managers operating outside the trust account control and audit regime of licensed real estate agents. Now they are still concerned and those property managers have carte blanche to carry on their business without any checks or balances without any trust account control and without any audit—whether a spot audit or a regular audit. 
Property management involves holding significant funds in an account. Hundreds of millions of dollars pass through bank accounts of property managers. What happens to missing rent moneys? Well the institute under this bill has no jurisdiction to deal with any complaints about missing rent moneys. There is no requirement to hold the moneys in a trust account. There is no fidelity fund in the event of misappropriation. As the institute itself stated: “If residential property managers are not covered by the new regime gaps in the current laws will leave consumers vulnerable. If anything goes wrong the only recourse for consumers may be via the courts. If residential letting agents and property managers are not covered they would not have to meet any educational and practice standards comply with any regulations concerning the holding of money in trust accounts and there would be no efficient recourse for consumers with complaints as the authority and the tribunal would not have the jurisdiction to hear or decide on any complaints concerning the letting or management of property. This is contrary to the purpose of the bill which is consumer protection.” 
The second issue we have some concern about is the bureaucracy imposed by this bill. We have noted before the concerning parallels of this latest bureaucratic proposed system with the Department of Building and Housing. Consumers can still be protected without having to bear the costs of senseless bureaucracy. We are not convinced that this balance has been achieved. The industry will not bear the costs; the costs will be handed down to the consumer and housing affordability will get even more difficult. Consumers will simply have to pay more. 
Actually if this bill were really about consumer protection it would include property management and it would not impose even more costs on the consumer. And if the Minister really were listening and he really were concerned about consumer protection then the bill would have required real estate salespersons to have more experience rather than less. The original bill required 2 years’ experience out of the previous 10 years and the industry itself wanted 3 years out of the previous 5 years. The Minister’s amendment has increased it to 3 years out of the previous 10 years yet even the industry itself preferred more experience because it too is concerned about consumer protection. I would have thought that if this Government really were interested in consumer protection then that would be a very simple improvement to make. 
Concern has also been expressed that the transitional period prescribed in order to implement this legislation is not sufficient. It was originally 12 months. The Minister has very generously increased it by a mere 2 months to 14 months. The institute itself has suggested 2 years. I think it is appropriate to make comparisons to the Lawyers and Conveyancers Act which prescribed 2 years. When we are changing the way an industry is to operate as is intended under this bill it is vital that sufficient transitional time is given for it to be able to actually implement those changes. 
So we have a bill that sadly is just another missed opportunity—a bill intended to protect the consumer and to give the consumer confidence. It has been hijacked by hyperbole and political posturing. Regretfully whilst we absolutely support the purpose of the bill we do not believe that it properly addresses the issue of consumer confidence. Therefore we cannot support it at its second reading. 
PITA PARAONE (NZ First) 
: 
 Tena koe Mr Assistant Speaker. On behalf of New Zealand First I stand to make a contribution to the second reading of the Real Estate Agents Bill. We certainly support this bill. It is about bringing more accountability transparency and openness to the real estate sector while at the same time establishing an independent complaints system to protect consumers and provide support for real estate agents. The bill replaces the Real Estate Agents Act 1976 and I think it is timely. Some people will say the bill is overdue and I tend to agree. I think it addresses some of the concerns that come from having on our statute book legislation that is so old. 
Although some people have been very critical of the real estate profession in my view the profession is an honourable one—one that is under some duress here in New Zealand as a consequence of a depressed market brought about by high interest rates and other economies. However this profession is not exempt from having amongst its number—and I am glad to say it is limited to a very small minority—those who have brought it into disrepute. I suspect that because of that small minority we heard from a number of submitters who expressed their concerns to us that the present Act was inadequate in meeting their concerns. I acknowledge the Justice and Electoral Committee which heard these submissions. I understand it received more than 1300 submissions. Just over 600 of those were heard personally by the committee or by video link. I especially want to say to the committee that it has done a fine job. The report it brought back to the House I think addressed many of the issues that submitters were concerned about. 
The report back suggests a number of changes and I am glad to see that the Minister has taken it upon himself to make the necessary amendments by way of Supplementary Order Paper 243 and that he has also given some consideration to the concerns that my colleagues and I had about the bill. These include the points of amendment regarding the rescinding the requirement to review the employment status of sales persons the rescinding of the decision to regulate the conduct of auctions the experience criteria required before agents or branch managers are entitled to have their licences raised from 2 out of 10 years to 3 out of 10 years and the Real Estate Institute of New Zealand being consulted on first-term appointments to the authority and disciplinary tribunal. 
I think those changes may give some relief to the present leadership of the Real Estate Institute in terms of the concerns it expressed during this whole process being taken on board. I know there has been some exchange of views between the principals of the institute and the Minister but without their compromising their positions I think. Both parties have agreed that the protection of the consumer and the strengthening of accountability is the most important thing that comes out of this bill. 
I know that the Real Estate Institute might still have some concerns but I think the bill goes a long way towards not only giving back to the consumers more confidence in the institute but also giving a sense of security to members of the New Zealand public who may need the services of the real estate profession now and into the future. 
Some comment has been made about the fact that property management has not been covered by this bill. I agree with the select committee that the issue of property management was outside the scope of the bill. However the Minister has indicated that a review will be made in the future. 
Hon Clayton Cosgrove 
: Coming at the same time. 
PITA PARAONE 
: At the same time as the bill—OK. The Minister has recognised that as a very important issue. That is important because on any one day of the week property managers hold excessive amounts of money on behalf of both tenants and landlords. Given the financial stress that New Zealand is placed under at this time—I know that that may sound exaggerated but the fact is that we have a group of people holding funds that belong to other people—we need to seriously consider the security and the safety of those funds. New Zealand First will support the Real Estate Agents Bill at its second reading. 
SUE BRADFORD (Green) 
: 
 The Green Party will be supporting the Real Estate Agents Bill and associated Government amendments through all final stages in the House today. We were aware from the start of the contentious nature of aspects of this new law. How could we avoid it given the powerful and effective voices of real estate agents and auctioneers and the somewhat combative statements of Minister Clayton Cosgrove in the earlier stages of the process? 
The consideration of the bill by the Justice and Electoral Committee was intense but informative and I would like to acknowledge all of the more than 1300 submitters for the effort they put into participating in this particular democratic process. I would like especially to thank Barfoot and Thompson in Auckland for showing several of us on the committee around its operations so that we could get a better feel for aspects of the sales human resources accounting and auctioning side of the business. The complexities of those backroom functions are not normally visible to a vendor or a purchaser—my only contact with the industry in the past being in that role albeit on a number of occasions. 
One of the key achievements of this bill will be the establishment of a new Real Estate Agents Authority which will have the power among other things to investigate complaints from people about things like real or perceived conflicts of interest on the part of agents commissions and fees and generally shoddy or inadequate practices. The new authority will investigate complaints on behalf of the consumer for free and is an independent body with the ability to set penalties and award compensation. It will also be responsible for administering the licensing system for real estate agents setting standards establishing fees and levies and providing information for consumers. The Greens believe that having all those functions carried out by a statutory organisation independent of the Real Estate Institute unlike the existing situation will inspire confidence in all those for whom buying or selling a house is often the biggest financial decision of their lives. 
This bill also incorporates the establishment of a separate Real Estate Agents Disciplinary Tribunal whose functions will be to deal with matters referred to it by the complaints assessment committee—a committee appointed in turn by the new Real Estate Agents Authority. During the course of the Justice and Electoral Committee consideration we heard many concerns from industry submitters about their fears that the representation on those new bodies would not include people with a long track record of working in the sector—people who would hold the confidence of agents and their professional association. This concern was shared by the Greens and by other parties and we have been pleased to see improvements to the bill in this regard. During the select committee process we supported changes that mean that firstly the Minister will be required to appoint at least two members of the Real Estate Agents Authority who are licensees or former licensees and secondly in relation to the disciplinary tribunal at least one member must be a licensee. In addition there is a Government Supplementary Order Paper before the House that will further amend the bill so that the Minister now is required to consult the Real Estate Institute when making the first appointment of licensees and former licensees to the authority and the disciplinary tribunal. The Green Party has backed all these changes because we think it critical that the expertise of real estate agents and their own professional body should be brought to bear if these reforms are to have credibility with the industry and so that the reforms will find support among those whose standards and quality of work we are expecting to improve as a result of these measures. 
Another area of much contention during consideration of this bill was the proposal to review the employment status of sales people after 5 years. The Greens had supported this proposal because we have ongoing concerns about the exploitation and low pay of some vulnerable workers and contractors within the industry. However a Government amendment will remove the relevant 5-year review clause. Although we will be supporting the change we also hope that anyone working in the industry who has concerns over his or her employment or contracting conditions or lack of them will not hesitate to avail himself or herself of the remedies available now through existing employment law. At a time when the industry is seeing a major shake-out as a result of the downturn in the housing market it is more important than ever that the employees and contractors who remain are treated well and are able to stand up for themselves with my concern here being especially for some back-office people as well as some agents who run the risk of carrying the can financially for a sector that is going through difficult times. 
The whole area of auctioneering was another difficult issue for the select committee. As the auctioneers who made submissions to us quickly found out this is not an aspect of the housing market with which I and I think some other MPs on the committee had any familiarity whatsoever. I was struggling to grasp what the purpose of the original changes to the auction system were in relation to the rest of the bill especially after receiving repeated assurances that after some admittedly shonky episodes in the past there are now enough safeguards in place in the auction process to protect the ethics and the interests of all involved. Although I think perhaps it might have been a good idea to find a way to enshrine or append an auctioneer’s code of ethics to the legislation in the meanwhile the Greens support the proposed amendment which will leave things with the status quo in regard to auctions. 
One other matter of major dispute during our dealing with this bill was the question of whether property managers could or should be included in the legislation. I was convinced by numerous submitters that it would have been better if we could incorporate property managers within the legislation—for example through regulation of activities such as leasing letting collection of rentals and so on—as this area of work is also a key part of the real estate sector and in fact often forms part of the operation of real estate firms themselves as well as other firms. However in the end there was clear advice to the committee that to try to amend the bill to include property managers was outside its scope. The Green Party therefore welcomes the commitment the Government has made to review with some urgency the regulation of property management in a way that will be coordinated to be simultaneous with the commencement of this bill. The fact that the commencement of most of the provisions of the bill will be extended out from 1 year to 14 months should also mean that this review and resulting legislation will have time to happen effectively and well in full consultation with all concerned. I trust that whatever form our next Government takes that commitment about property managers will be actioned. 
The Real Estate Agents Bill got off to a really rocky start and I think it was unfortunate that such important legislation for consumers and for all stakeholders in the real estate area became more of a political battlefield than was really necessary. I believe that the reforms contained in this legislation are necessary and well worked through and that all the MPs on the committee listened hard to the many concerns expressed to us including issues beyond those I have had time to deal with today. I was particularly pleased after earlier episodes to see a media release from the Real Estate Institute on 30 July this year that welcomed the new bill with amendments and stated: “We are committed to working with the legislators to ensure that the final result is the best consumer legislation possible.” I think that is a commendable attitude on the part of the institute and hope it is one that will be shared by all parties in this House and by all involved in the industry. 
We have seen and will undoubtedly continue to see examples of rip-offs cons shabby treatment of customers and exploitation of workers in the industry. However it will be in the best interests of everyone if the reforms enacted here are carried out with goodwill and commitment on all sides so that we see a steady improvement in quality accountability and protection for all concerned. As I said on an earlier occasion this bill is about justice not only being done but being seen to be done. 
I thank everyone who has had some role in getting the bill to this stage including our committee chair Lynne Pillay; Minister Clayton Cosgrove; and all the submitters. But I would also like to say a special thankyou to the hard-working Government officials and select committee staff for all their work because they really had quite a hard time of it I have to say during the select committee process. I believe they did a fantastic job on very difficult and complex legislation and I thank them. 
I commend the bill to the House. 
Hon TARIANA TURIA (Co-Leader—Maori Party) 
: 
 Tena koe Mr Assistant Speaker. Tena tatou katoa. It could not be a better time to be introducing a new regulatory framework for the real estate industry to help it shape up to the expectations of the consumer client base that it services. Statistics from the Real Estate Institute of New Zealand revealed a dramatic reduction in residential sale volume over the year end. Sales registered in July 2008 were down by a massive 33 percent. It would be simplistic to suggest that the Real Estate Agents Bill will single-handedly reverse a perilous economic downturn but then again one never knows what may turn the tide in encouraging homeowners to take a gamble on the current market. What we do know is that concerns with issues such as misleading representation poor contractual advice and mishandled funds have been making more and more New Zealanders risk-averse to the real-life monopoly board. 
Such was the level of concern in fact that some 1328 submissions were received from the public. This in itself should warrant this bill being accorded particular attention to facilitate the smooth passage of law in the most efficient time possible. However when we think about the foreshore and seabed legislation which received 3946 written submissions and 234 oral presentations we find that that process was not given serious and responsible attention so let us hope that the net is cast differently for this Real Estate Agents Bill. 
The impact of any legislative changes to promote public confidence in the performance of real estate agency work must not be underestimated. An analysis of the number of New Zealand computers visiting real estate websites found an average of 325000 sessions per week. As of July 2008 there were 60150 residential properties for sale on the market being put up for offer by approximately 1500 real estate agents and over 20000 sales people so it is a huge industry and it requires that we take seriously the importance of consumer protection in real estate transactions. This bill is about protecting and promoting the interests of consumers in these transactions. That is a worthy ideal and one that we hope will be taken up as a priority by all parties in this House and it is beginning to look that way. 
There has been much said about the need to regulate agents managers and salespeople to ensure that consumers receive a quality service from an agency that adheres to industry standards. There is no denial that an upgrade has been sorely needed. The 1976 Act for instance included as a maximum penalty that the institute could impose a fine no greater than $750. But more significantly there had already been moves afoot within the industry to upskill and improve. The Real Estate Institute had itself realised the urgent need for consumer protection and had contracted none other than consumer affairs advocate David Russell to carry out its own review of its internal code of ethics and rules of practice. 
This bill then emphasises moves already in place to enhance industry standards and to provide accountability through a disciplinary process. The changes that will be made to an operational code of conduct will ensure that any progress is independent transparent and effective. Those are all values that we as the independent voice of Maori in this Parliament are adamant must be upheld in all spheres of Government including this House. Consumer New Zealand outlined this case clearly to the Justice and Electoral Committee. It told the committee that a significant number of complaints fielded by its advisory service came from people who have had problems with real estate agents. For too long people have had to accept quite a poor service from real estate agents and operators even though I would say also that there are some very good real estate people. The legislation will level the playing field and allow consumers to take action if they have been poorly treated. 
It was pleasing to see the Real Estate Institute of New Zealand giving support to the reforms and its agreement that professionalism will be enhanced and consumers protected through lifting industry standards. It particularly supported the creation of an independent and transparent complaints and disciplinary process. A key initiative put forward by this bill is the recommendation to amend the functions of the Real Estate Agents Authority particularly ensuring that there is consultation with the sector. So we are pleased to see the call from so many of the submissions from real estate agents has been taken up and that the membership of the authority and of the Real Estate Agents Disciplinary Tribunal will be broadened to ensure that industry expertise is represented. We support also the move to ensure that agents who employ independent contractors are liable for their actions as if a contractor were an employee. That will give better protection to consumers. 
However there are a couple of areas that we believe require further work as the bill proceeds through the House. The first of these was presented by the Whitireia Community Law Centre. Its view was that consumers faced with detailed agency contracts and complex statutory rights need far more than “educational information” as provided for in the bill to assist them in understanding their rights to make a complaint. Consumer advocacy should be recognised as an important way of maintaining industry standards and setting in place processes to achieve client care. As a corollary to this the Whitireia Community Law Centre also recommended that the functions of the authority should be expanded to include funding negotiation and conciliation or mediation of consumer complaints. 
The second issue is the contentious one of property management. This is an area of special relevance to Maori. The Maori Party is of course aware that the relatively low Maori homeownership rate would suggest a relatively high Maori renting rate. We know that 56 percent of the Maori population are not in owner-occupied dwellings as opposed to 31 percent of non-Maori. In real numbers two-thirds of our population do not own their residence. The importance of having an effective oversight of the entire industry is crucial. In effect whether one is renting or owning is irrelevant. The key thing is that the process is transparent and of course that all steps have been taken to ensure that people are not exploited by unscrupulous traders or misleading representation. To this effect we will be looking with interest at any Supplementary Order Papers that may come into the House at the Committee stage which may address the issue of property management. 
We are happy to support the bill at this stage in that we support any developments that can lift standards and achieve better protection for New Zealanders in dealing with real estate agents. We join with the Green Party in commending the officials for the way in which this bill has been managed at select committee. Kia ora. 
Hon PETER DUNNE (Leader—United Future) 
: 
 United Future will be opposing this Real Estate Agents Bill as being unnecessary and insidious. It is unnecessary because the concerns that it seeks to deal with—namely bad performance by real estate agents—could have been dealt with by two key amendments to the 1976 Act which this bill repeals. Firstly the provision relating to the maximum fine—$750—could have been substantially increased to bear much more relationship to today’s realities. Secondly we could have actually for the first time in 30 years appointed the regional disciplinary committees that the 1976 Act established. That would have given some teeth to the concern and would have made this legislation completely unnecessary. 
But it is more serious than that. This legislation is also insidious because the real message that it sends is that industry sectors be they the real estate sector or any other industry sector are now on notice from the Government that statutory regulation of their activities is just round the corner. For the last 20-odd years in this country we have put the onus on industry sectors to self-regulate to self-administer. Now the Government is turning that on its head and saying we are moving back down the path of essentially a Government takeover of regulation of those industry sectors. Here is the rub: the costs of that administration will be borne by the consumers. Young homeowners buying their first home will not have any greater protection as a result of this bill’s passing; they will face increased costs from the cost of administration of the new bureaucracy that is being established ostensibly to give them greater protection than they already have. It is a nonsense and it is a con. 
But the whole way in which this bill has been handled reeks of those two comments. I heard on 30 July this year an announcement in the media that agreement had been reached with New Zealand First over the content of the Real Estate Agents Bill and that it would proceed as a result of that agreement. Then there was a statement from the Real Estate Institute welcoming the changes that had been made. I was somewhat perplexed and immediately contacted the institute to find out what had been agreed only to be told two things. First the institute did not know of had not seen and had not been party to any of the discussions about the amendments to this bill but thought it appropriate to make a conciliatory statement. Second the institute’s understanding was that the discussions between New Zealand First and the Government came down in the end to a real estate agent in Tauranga who is known to the former member for Tauranga offering some advice and some drafting which became the basis of the amendments which at that stage were not known. 
This House can draw its own conclusions about the insidious tie of relationships between external parties and people within New Zealand First and what might well have been transacted as a result of that. That is for another place; I will not go there. But I will make the observation that it was not until 2 September over a month later that the Minister actually tabled the amendments that were being sought to be made. So we had the ludicrous situation of the Justice and Electoral Committee completing its work and reporting the bill back to the House a political deal then being struck somewhere else and the outcome of that deal being announced a month or more after the announcement that the agreement had been struck. That does not give any confidence to anybody about the credibility of this process let alone the worth and vitality of the legislation that is being passed. This is not about a better deal for consumers in terms of their interactions with real estate agents; this is all about satisfying the political bluster and the bullying that we heard from the Minister in the lead-up to it. In the old Mike Moore language every cliché known to man is being trotted out by “Mini-Mike” to justify this sort of thing. That is not the basis on which to make law; it simply makes a farce of this place. 
Let me turn to the next issue: the question of property management. I have heard it said right throughout this debate that property management could not be dealt with within the context of this bill because it was outside the scope of it. I want to refer to a case that was disposed of by the Real Estate Agents Licensing Board in June of this year. It was presided over by the Hon Bill Jeffries a former Labour Minister of Justice—and a very good one. It involved Paul Ronald John Romanos trading as Paul Romanos Real Estate and it was brought under section 94 of the Real Estate Agents Act and was accompanied by a section 98 application and one or two other provisions of section 33 as well. The upshot of that case was that Mr Romanos was struck off as a real estate agent. His licence was cancelled because of misappropriation of some $44000 relating to a body corporate of which he was the property manager. 
To suggest that dealing with property management is outside the scope of this bill is ludicrous when the Real Estate Agents Licensing Board already within the provisions of the Act that is being repealed deals with matters relating to the conduct of real estate agents who trade as property managers. I find it incredible that what is happening here is that in effect very shady operators like Mr Romanos and his company are being protected by the absence of reference to property management in this bill. It is no consolation to people for us to say that it is down for another review; the Romanoses of this world will continue to rip off their clients in the interim and all the brave words from the Minister about land sharks and every other ridiculous phrase that he used look absolutely hollow when we see that this type of behaviour is not addressed but implicitly condoned in this new bill. 
I want to know what the status of hearings by the Real Estate Agents Licensing Board of similar complaints will be in the wake of the passage of this legislation. Does it simply cease to be? Is it overtaken by the new Government-imposed statutory agency? What other complaints in train at the moment about property managers will be left to die and to falter? 
That example proves the nonsense of this legislation. This is not about a better deal for real estate agents and their clients. This is not about protecting the public interest. This is about as the Minister so aptly said right at the beginning bringing the hammer down; this is vengeance politics. If he were really concerned about the battlers on “Struggle Street”—I am sure he used that phrase—whom he professes concern for then he would have amended the 1976 Act and he would have done it over a year ago. The great need for change—the urgency of it—to prevent these poor people from being exploited and ripped off looks incredibly hollow when we see that it has taken us over a year to get to that point and when we see that two simple amendments to the primary Act would have dealt with the concerns that were expressed would have ensured that the fewer than 100 out 19000 real estate agents each year against whom complaints are lodged would be able to be disposed of or to be disciplined adequately and would have reinstated public confidence in the industry. 
This bill is a mighty big sledgehammer to crack a very small nut and the sour taste in the mouth that the nut leaves is that the poor long-suffering consumer will yet again bear the cost of this ministerial obsession. This is not the way to make law; this is appalling legislation and it deserves to be opposed with vigour. 
LYNNE PILLAY (Labour—Waitakere) 
: 
 It is a pleasure to stand and speak in support of the Real Estate Agents Bill. Had the previous speaker been on the select committee he would have listened to the submissions—the compelling submissions—about people who have had really bad experiences in the industry and how they were really not well treated in terms of seeing complaints handled and upheld. 
Firstly I thank the officials who have worked incredibly hard on this legislation because the very constructive submissions that we heard had a number of themes and the officials were able to give us very sound advice on them and amendments were made in the Justice and Electoral Committee to ensure that the issues raised were addressed. I also acknowledge Sue Bradford. Sue talked about the visit undertaken by me Labour colleagues and Sue to Barfoot and Thompson who took us right through the whole process of real estate and explained how it worked. It was a very very fruitful visit. 
I note that there were two types of submissions from firms. There were the firms who came along and who had put a tremendous amount of work into their submissions. That was very constructive. They supported many parts of the bill. In fact many supported independent regulation over self-regulation because I think they went to the purpose of the Act. That is why we made an amendment. The original purpose was to promote and protect the interests of consumers relating to real estate. That was the primary purpose but it was also to promote public confidence in the performance of real estate agency work. I thank those firms who came along. I feel that their submissions were very constructive. 
I also note that there were many many other submissions that were standard form submissions. We are all pragmatists here; we know how it works. The Real Estate Institute had a very very strong view about self-regulation and about the status quo and produced a form submission that it encouraged many of its members to sign. That was perfectly pragmatic; that is what happens. But at the end of the day when we sat and talked to people about protection there was very much a meeting of minds with many of those submitters about the need for protection but more important for independence and for a system that the public has confidence in. 
I am absolutely appalled at the games the National Party members are playing. I have to say that they were there they knew what the issues were they were not in disagreement with many but at the end of the day they held the old finger up in the wind to see where they thought they would get a lot of support from in terms of the people who were important to them in an election year. They made a very pragmatic decision—and certainly a decision that I do not respect—not to support this bill. There is absolute nonsense coming from National members around the issue of property management. National knows that it was outside the scope of the bill. We heard from independent people who do not work in the real estate industry but who work in property management. They came to the committee and said: “We support regulation but we won’t be covered. We support looking into this and covering the whole industry around standards.” And we say: “Good on you for doing that.” That is why there is a commitment to review the status of property management and should legislation be required—and I believe that will be the case—then that will come into effect. The Minister has made the commitment that it will come into effect at the same time as this legislation comes into effect. 
All of the nonsense about how this legislation does not meet needs is absolute rubbish. Thank heavens National does not have the numbers because it wants the status quo whereby people who have a complaint are at the mercy of the industry there is no independence whatsoever and there are no fines of any impact that give people who are investing in the biggest investment of their lives the protection they deserve. This is a fantastic bill. It has been dramatically improved by the select committee process and I am proud to stand in this House to commend it. 
Dr RICHARD WORTH (National) 
: 
 I cannot empathise on any basis with the comments that the previous speaker Lynne Pillay made. I think a very good starting point for looking at this type of legislation is to gauge the reactions of both the public and the industry organisation to what has occurred. Just by way of contrast I look for a moment at the Lawyers and Conveyancers Bill. In the passage of that legislation a very committed effort was made by the Law Society and the policy advisers in the Ministry of Justice to come up with legislation that would provide a workable framework for the future and would also enable a high level of consumer protection to be offered to the public and society more generally. 
This bill certainly did not have that intent in mind. It immediately put the Minister in a situation of conflict and confrontation with the industry. He believed quite clearly that there was massive rorting and fraud going on the sector and he decided he would make an example of this particular occupational group. I have had the good fortune as a practising lawyer for perhaps 30 years to have a close involvement with the industry and I can certainly make some comments that although not exactly insider comments reflect an understanding of its operations. One of the things one could say about those involved in the sector particularly those in leadership positions is that they have a passionate concern about the sector and they have in many cases given thousands of hours of time to seeking to improve the lots both of those who work in the sector and of those who seek to take advantage of its services. 
We saw clearly when the bill was introduced where the Minister and his advisers were coming from because the explanatory note to the bill had in it a general purpose statement that started off by noting that “The Real Estate Agents Act 1976 is over 30 years old”. That in itself seemed to the Minister and his advisers a reason for making change. Yet I reflect on the Crimes Act 1961 which is old legislation in respect of which there is no necessary warrant for change. The Crimes Act 1961 would be—what—some 47 years old. So in itself the fact that legislation might be 30 years old is not significant. 
The policy advisers also said in the general policy statement that the shortcomings of the Real Estate Agents Act included that “It provides for a system of industry self-regulation that lacks independence transparency and accountability. This combined with the significant risk posed to consumers from real estate activity such as mishandling of funds poor contractual advice misleading representations conflicts of interest and misuse of information make it essential to provide a regulatory framework that affords consumers an adequate level of protection.” So battle was joined. The end result in a setting of confrontation I believe has not been to produce a statute that has those key elements of consumer protection that may be required. 
What was the response of the institute to all of this? Well it had a number of concerns and I would identify them in two broad categories. First of all it saw—as must be readily apparent—that the bill lacked consistency. It exposes thousands of people to new risk through its failure to include property management and residential letting and leasing within the new regulatory framework. I think it is right to say that the fall-out from the Blue Chip collapse clearly demonstrates the need for these activities to be regulated. I have heard the comments of the previous speaker but here an opportunity to effect significant change and make a significant advance to improve the merit of this legislation was not taken. It is all very well to say that these issues may be addressed in the future but the reality of the shortage of parliamentary time is that it will be some considerable period—certainly if this Government lingers in office for another term—until any appropriate change is made. 
So there was a criticism of lack of consistency. But I think there is a stronger criticism that can be made and that is basically that the bill lacks balance. I do not doubt that the Minister has done his very best but in a setting where he has no basic knowledge of what the problems are it is an exercise fraught with difficulty. So I am not criticising the Minister—he has done the very best he can with his intellect and with the advice that he has had available to him. That a shortfall has emerged is quite understandable. The Minister should not feel bad about that as he shouts across the House. He should not feel embarrassed. I certainly do not feel embarrassed in making comments about the challenge that he has had to face and in fact the failure that has so sadly occurred. 
I was saying that the bill lacks balance and I would just like to develop that for a moment. The 1976 Act has been completely dismantled. Even those parts of it that have worked really well over the past 32 years have been thrown out. There has been this substantial transfer to the authority or to the Minister of a raft of regulatory functions. I note that in its submission the Real Estate Institute spoke about a scorched earth approach. Maybe those are heavy words but I think they can be justified because a number of things have happened here including putting at substantial risk a very cost-effective system of conveyancing at a time when housing affordability as we all know is a significant concern. If this bill is to pass we will also have produced significant avoidable expense some of which will quite clearly be passed on to consumers. 
We will see significant delays to the establishment of the framework and that of course is associated with the issue in the Supplementary Order Paper of an extended period for the transitional provisions. We have compromised the workability and practicability of the new regime by denying input to those with direct industry experience. So the outcome is less satisfactory legislation than might have been expected. 
I think it is appropriate to respond directly to comments that the Minister may make at a later stage in connection with National’s perspective on the bill. I have pretty much summarised where the institute and those in the industry stand but National took a full part in the bill as it was reported from the Justice and Electoral Committee. It noted that some of the concerns that it had expressed had been the subject of patching but it continued to oppose this bill. I think we do so for reasons that are soundly based. Are they based on an industry perspective? Sure. But they are also based on the perspective of the community. 
I think we would say that a new independent authority with industry representation is required to give consumers confidence that there is effective oversight of this industry. I am bound to say that there are circumstances—fortunately only a few—where fraud and resultant loss have occurred. But this bill is not adequate; it is not up to the task of achieving the objective that should have been set. I have spoken about the fact that a majority of submitters were concerned that property management was not included in the bill and I think we all know that the last claims in respect of the fidelity guarantee fund were in relation to property management. The committee was told that about one in five complaints relates to property management. 
Hon Clayton Cosgrove 
: They had no evidence for it. They did a ring-round. 
Dr RICHARD WORTH 
: The Minister is critical of the evidence that has come to the committee. A lot of the evidence that came to the committee may have been flawed. It seems to be the case that it is that flawed evidence that the Government members have relied upon. I hope in the course of further comment on this bill to deal with issues that remain of true concern. 
Amendments recommended by the Justice and Electoral Committee by majority agreed to. 
A party vote was called for on the question  
That the Real Estate Agents Bill be now read a second time. 
Ayes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Bill read a second time. 
In Committee 
Part 1 Interpretation and application 
CHRISTOPHER FINLAYSON (National) 
: 
 As the minority report of the National Party makes clear we support the timely reform of the real estate industry. Indeed we go so far as to say that the Real Estate Agents Act 1976 is well overdue for reform. We also say that the purposes of the Real Estate Agents Bill are well spelt out in clause 3 which is the first clause of Part 1. It is important that we have regulation of the real estate industry that promotes public confidence in the performance of real estate agency work. But we take issue with subclause (2) about whether the purposes of the bill are actually achieved in the way that that subclause says they are achieved particularly where it states they are achieved by “providing accountability through a disciplinary process that is independent transparent and effective.” 
To come back to the general concerns of the National Party—and we acknowledge that the Minister in the chair the Hon Clayton Cosgrove has dealt with two of them—I say the first concern we had which related to property management has not been dealt with. The second concern revolved around the uncertainty created by the 5-year review of the employment status of real estate agents. That excited a great deal of discussion in the Justice and Electoral Committee meetings and it has been dealt with to our satisfaction because that provision is now deleted. The next concern is about the transitional provision and I will spend some time on talking about the practical implications of the transitional provision when we deal with clause 2. We are not happy with that. The next concern we had was that auctioneers remain excluded from the legislation and that the new rules relating to auctions were impractical. That concern has been dealt with to our satisfaction because those clauses have been deleted on Supplementary Order Paper 243 in the name of the Hon Clayton Cosgrove. The auction bidder’s record was also impractical and that has been dealt with to our satisfaction because as I said clauses 136 to141 are deleted. 
We remain concerned about the bureaucracy and the effect it will have on costs to the consumer. That has not been dealt with. We also remain concerned about the requisite experience for a real estate agent to hold a licence. 
So some matters have been dealt with and it is good that the Minister’s Supplementary Order Paper advances matters but some other matters are not dealt with and we remain concerned about them. Therefore we continue to oppose them. If the Minister was prepared to have an open mind on those matters I believe that the remaining concerns could be resolved but that is a matter for him. 
I will briefly explain one or two matters that the select committee dealt with. A number of exemptions were contained in the bill. I have already mentioned clause 7 in my second reading speech. It deals with the exemption for lawyers and conveyancers and only minor alterations have been made to it. Licensed auctioneers remain exempt and that is fair enough. We deleted the exemptions for Landcorp and the exemptions granted by the authority. Clause 11 is an interesting clause. We tried to find out what the position was under clause 11. If my memory serves me correctly it relates to a particular part of New Zealand only—somewhere in the Ruapehu district—where certain land agents are exempted under the regulations. I questioned whether we still needed that clause because it covers so few people. Clauses 12 and 13 also deal with certain exemptions by Order in Council or on the recommendation of the Minister. I simply refer the Committee to clause 155 and in particular to clause 155(aa) 155(2) and 155(3). It was considered that the regulation-making power in that clause was the best place to deal with issues relating to the exemptions formerly contained under clauses 12 and 13. 
In conclusion on this part I simply say that the purpose of the Act as set out in clause 3(1) is commendable but I regret that the purpose is not achieved by the structure that has been created. Some issues have been dealt with but we simply do not need a bureaucracy to regulate this occupational group. We remain very concerned at the other issues I have dealt with. 
KATE WILKINSON (National) 
: 
 Thank you Mr Chairperson for allowing me to take a call on Part 1 of the Real Estate Agents Bill. As National members have stated throughout the debate on both the first and second readings we support the purpose of the bill as contained in clause 3 which is to promote and protect the interests of consumers in respect of transactions that relate to real estate and to promote public confidence in the performance of real estate agency work. I cannot underscore enough the fact that we certainly support that purpose. We do not think this bill achieves that purpose and we think that it is a missed opportunity. 
I want to spend some time on the interpretation clause which is clause 4. It is the definitions clause and there are a couple of definitions I would like the Minister to take a call on. The definitions of “residential” and of “real estate agency work” are integral to how this bill will operate how it can protect consumers and how it can be effective. As a practitioner who spent some time in the conveyancing field of legal work I certainly know that even under the old real estate legislation the definition of real estate work was very topical and often discussed. It is a definition that will cause confusion and I think it will be tested in the courts if this Parliament introduces provisions that are uncertain or ambiguous. 
If one looks at the definition in clause 4 of “real estate agency work or agency work” one sees that it “(a) means any work done or services provided in trade on behalf of another person for the purpose of bringing about a transaction; and (b) includes any work done by a branch manager …”. And that is fine but I think we really do need some clarification on the exclusions. Under paragraph (c) the work “does not include—(i) the provision of general advice or materials to assist owners to locate and negotiate with potential buyers; or (ii) the publication of newspapers journals” etc. “that include advertisements for the sale or other disposal of any land or business;”—and that is fine—or the broadcasting of such advertisements. Again that is fine. The work also does not include “(iv) the lending of money on mortgage or otherwise; or (v) the provision of investment advice;”. The Minister just might like to know that there is an extra “or” at the end of that subparagraph which needs to be deleted. It does not affect the substance of the provision but it certainly does affect its form. 
I would like the Minister to take a call to explain to me and to the Committee how the operations of companies such as Green Door and the increasing trend to sell properties on TradeMe are affected by this definition of real estate work or the exclusions thereto. I would also appreciate the Minister taking a call in relation to subparagraph (v) which excludes the provision of investment advice. Many people go to their real estate agents for investment advice. They want to know what investment properties to purchase they want to know the rate of return on property and they want to know whether there is any possibility of making capital gain on property. So they actually do go to their real estate agents. Admittedly that is mainly in the commercial field but not necessarily just in that field; it can also be in the residential field. They go to their real estate agents for investment advice. 
This bill expressly excludes the giving of investment advice but the bill is deficient to the extent that it does not actually say what investment advice really is and where it starts and stops. Does it include the real estate agency work that is done once the purchaser has decided to purchase a property? Does it start at the beginning of the transaction when the advice is first sought? Where does the investment advice start and stop because that is a very important point in determining what exactly investment advice is and whether it is excluded under the regime of this Real Estate Agents Bill. 
I know that the Minister in the chair the Hon Clayton Cosgrove is not listening because he does not actually understand the real estate industry at all but the other issue is in relation to residential property and its definition in clause 4: “residential property means any property used or intended to be used exclusively or principally for residential purposes”. That sounds simple enough and the Minister will know because he is actually temporarily the electorate member for one of the fastest-growing areas in the country which has a proliferation of lifestyle properties. Does a lifestyle property fall within the definition of a residential property or not? What does “exclusively or principally” mean? If a person has a 10-acre/4-hectare property on which there is a house a garage a stable a couple of ponies and four sheep is that residential property for the purposes of this Real Estate Agents Bill or is that excluded? 
Someone might ask why that definition is important. It is important because we can turn to clause 129 and read “Parties may cancel sole agency agreements in respect of residential property 90 days after agreement is signed”. So if a property is a lifestyle property—that is partially used for residential partially used for agistment partially used for grazing—does that mean that the parties to that agreement the vendor-clients can then automatically cancel that sole agency agreement after 90 days or does that mean they cannot because that will be very important. If they cancel it and they cancel it wrongly because of the uncertainty in this bill as enacted they could end up instructing other agents and paying twice the agency fees twice the real estate agent’s commission. So we need to know and the Minister needs to take a call on the scope of that word “residential”. 
The other issue in relation to the definition of “residential” concerns subdivisions. Although clause 129(4A) excludes residential property that “(a) has been developed with other properties in a continuous area; and (b) is proposed to be sold or otherwise disposed of by a vendor who also proposes to sell or otherwise dispose of … some or all of those other properties.” at what stage does residential property fall within that exclusion? Is a subdivision created for example by dividing that 4-hectare paddock into two 2-hectare paddocks? Does that make that land a subdivision that falls within the exclusion provision in the definition of residential property for the purpose of clause 129? 
Although to some that may seem pedantic as one who has been involved in this industry as a lawyer for many many years I can tell members that a number of disputes arise from the vendor-clients who think they have properly cancelled a sole agency agreement for whatever reason but who suddenly find that they have not cancelled it and in the meantime they have gone to another agent and then they run the risk of paying twice the commission. 
I do not think this bill is good law for the protection of the consumer when it has these uncertainties in it. Some of these uncertainties were raised at the select committee but they were not answered and I think one of the basic flaws of this bill is that although it is a real estate bill and relates to real estate agents it seems to have been tailored with only residential property in mind and without giving any thought to other sales of real estate whether commercial industrial or lifestyle. I think those issues do need to be addressed and I do think the Minister needs to take a call on that. 
The other definition I will also speak about is the definition of “transaction”. Although it might be a typo that definition in clause 4 has five paragraphs. Most talk about the “grant sale purchase or the disposal or acquisition” of a licence freehold estate or leasehold estate but paragraph (a) does not include the word “grant”. The word “grant” is specifically excluded in relation to paragraph (a) of the definition of transaction so paragraph (a) includes only “the sale purchase or other disposal or acquisition of a freehold estate …”. It does not include the “grant”. That omission must be deemed to be deliberate because that is the way statutes are interpreted and I want to know why the word “grant” has been deliberately omitted from paragraph (a). 
Finally in relation to this call I will talk about the Minister’s Supplementary Order Paper 243 which talks about the sale and purchase of shares and states that they are excluded. Why are they excluded? In the field of real estate there is often a family-owned company whose sole asset is a farm and for various reasons—for example it could be for GST or other reasons—rather than sell the real estate or the property itself the parties decide to effect the transaction by way of the sale of shares. That for all intents and purposes and common sense says that that is a sale relating to real estate but under this bill it is not caught. I think that that again is a deficiency in this bill which is borne out by the lack of awareness on the part of the Government parties as to how the real estate industry works. I think that that really does need to be clarified because more and more rural property transactions are being conducted by way of a sale of shares. 
Hon DAVID CARTER (National) 
: 
 It is with some concern that I see this legislation back before us this morning. My concern is the relationship between the Real Estate Institute of New Zealand and the Minister in the chair Clayton Cosgrove because that relationship appears to be at an all-time low— 
Dr Richard Worth 
: Fractured. 
Hon DAVID CARTER 
: —permanently fractured. In fact I refer to an editorial in the  
Manawatu Standard 
 on 12 July this year in which the editor said: “Now that the heat has gone out of the property sector Mr Cosgrove looks like a bully.” I say to the Minister that this is not the way to conduct a review of the legislation under which the real estate industry operates. 
I have had a harmonious relationship with the industry for many many years. I have appreciated the worth of that industry. I know that throughout the time National was in Government the industry requested on many occasions that the Act be modernised and reviewed but because National had so many other important things to do we did not get on to the job. Then Mr Cosgrove got the chance so what he did was to go out and call the real estate agents of this country cowboys and land sharks. I know that he has had to back down because Helen Clark put his arm up behind his back and said that is not the way to progress legislation. He has had to eat humble pie with his mate the Rt Hon Winston Raymond Peters. He has had to go to the Rt Hon Winston Raymond Peters and ask him to please support the legislation so that he can get it through the House. He has had to go back to the Real Estate Institute and to work diligently on a Supplementary Order Paper which he promised to present to the institute approximately 2 months ago. I think I am right in saying the institute got it yesterday at around 11 o’clock. It goes some of the way towards starting to mend the fractious relationship that this Minister has created with the industry but it does not go far enough. 
I say to that member who was aptly described by the  
Manawatu Standard 
 as a bully—not my words but the words of the editor of the  
Manawatu Standard 
—that he ought to learn how to handle relationships far better. If he had done that then I think we could have had legislation before the House today that everybody could sign up to. He would not have had to go begging for the support of the Rt Hon Winston Raymond Peters; he would have had support from everybody. But instead he goes around and talks about the industry besmirches it and calls the real estate agents of this country cowboys and land sharks. I am not saying they are all perfect. I am certainly saying to the Minister that the great majority of them are. 
Hon Clayton Cosgrove 
: As I’ve said. I’ll give you all the press cuttings. 
Hon DAVID CARTER 
: Oh the Minister is now saying the great majority are good guys! That is not what he said a couple of months ago when the guy was full of bluster and bravado. He went on TV—I remember seeing it—and talked of carnage in the industry. Now he is saying most of them are good guys. Why did he not think of doing the job properly in the first place? Why did he go out and destroy a relationship that did not need to be destroyed? Why did he not talk to the Real Estate Institute work with it— 
Jill Pettis 
: Unlike that member he did something. 
Hon DAVID CARTER 
: Jill Pettis is piping up now. What does she say? 
Jill Pettis 
: That member did nothing! 
Hon DAVID CARTER 
: I am the one who has been talking to the Real Estate Institute on a regular basis making sure that its concerns are addressed in the Supplementary Order Paper. That member would not have picked up the phone to talk to anybody in the industry. She probably would not know anybody in the industry and if she did she would probably abuse them; she would pick up on Clayton Cosgrove’s words and call them all land sharks and cowboys. That does nothing I say to Jill Pettis. 
What this industry wants is modernised legislation. It wants modernised legislation so that it can operate in the 21st century. The industry has been requesting that for a long time and if the Minister had only worked with the industry and prepared some legislation that addressed the concerns held by a wide number of New Zealanders then we could have had legislation back in the House today that would be supported by most political parties. But no Clayton Cosgrove probably took his lessons from Jill Pettis so he had no chance of being a gentleman. He had no chance at all; instead of that it was bullying tactics bluster and words that I should not be allowed to use in Parliament and will not. Consequently we are here now with legislation that will mend some things that need to be mended but it will not go far enough and it will not be enduring legislation for this industry. Of course it is something that the National Government after 15 November will have to come back and tidy up simply because of the arrogant and bullying attitude of the Minister. 
Kate Wilkinson 
: And ignorance! 
Hon DAVID CARTER 
: The Minister obviously had a run-in with somebody some time—we do not know why. 
ERIC ROY (National—Invercargill) 
: 
 I was not going to take a call on this part but I am so intrigued when I look at this bill because I well remember seeing the Minister in the chair the Hon Clayton Cosgrove on TV using some very extravagant language to describe real estate agents: “rip-off merchants” “rascals” “land sharks”—all of those sorts of words— 
Hon David Carter 
: Cowboys. 
ERIC ROY 
: —cowboys—and he was going to protect the consumer. I will talk a wee bit about that in a minute. 
When one looks at this legislation one asks what the purpose of Part 1 actually is. The purpose rather intrigues me because we had this very very strong rhetoric about how consumers were being ripped off and were at risk and when I look at the commentary I see that the purpose of the Act is to “reinforce the message that the bill sends to the industry”. So here we have this great mischief occurring in the transactions of the nation and this bill will reinforce the message. I feel that if there are such evil procedures taking place in the transactions involving real estate around the country there certainly needs to be quite a bit more than a message. 
I think that this bill is spawned out of envy to some degree. Some real estate agents have actually been successful. Therefore if they have been successful they must have been conducting evil business. That is where it comes from. 
Hon Clayton Cosgrove 
: That’s silly. 
ERIC ROY 
: It is not silly. The Minister is now interested. If one looks at the expenditure of an individual in a lifetime and at the size of the investments people make one sees that No. 1 is real estate. There is absolutely no doubt about that. No. 2 is a motor car. Who are the most hated people apart from politicians? Car salesmen! We have this focus on car salesmen so we have to lift our game and hate those successful real estate agents. The third biggest investment that people make in their lives is carpet which is rather fascinating is it not? So the next thing we will see is that carpet salesmen are ripping off the nation. That is no basis to legislate on. 
The consumer is at risk—well the consumer is frequently at risk in a whole range of ways. Looking after the consumer is a high aspiration but to a degree we have to set out a course—a road map—so that people who are making these real estate investments have a course that they can follow. There is a requirement that real estate agents be licensed and are of good character. Then one writes a contract. I have bought land on a handshake without an agent. Would it not be great if we could do that? 
Hon Clayton Cosgrove 
: You did? 
ERIC ROY 
: The member understands that there are no problems with the great majority of transactions that take place. Then one gets a lawyer. The lawyer looks at the land information memorandum report and the memorials to see whether there is any mischief. There is a structured way in which those transactions take place. 
Hon Clayton Cosgrove 
: So there’s no problem at all? 
ERIC ROY 
: Well here is the point you see. The Minister said “So there’s not a problem?”. I want the Minister to stand up and say “This is the mischief that we have uncovered.” I want the Minister to take a call and say “This is what was happening.” Then we might have something to debate other than a bill whose purpose is to reinforce a message. 
I think we have had the select committee beavering away over submissions. I will have some things to say because I became intrigued by an element in Part 5 so I am looking forward to getting the Minister’s response on that. But essentially we really need to have a clearer amplification of what the purpose is in this bill. What is the mischief? What have these evil real estate agents been doing to the nation of New Zealand that this bill will protect us from? If I am to know what it is then I need to have some clear articulation of what the mischief is so that we can measure whether this bill addresses those things. I look forward to the Minister in the chair the Hon Clayton Cosgrove telling us what those evils are. 
Hon Clayton Cosgrove 
: Hold on help is on the way. 
ERIC ROY 
: Right well let us hear about them. 
Dr RICHARD WORTH (National) 
: 
 At the moment we are dealing with Part 1 of the Real Estate Agents Bill which National opposes. I certainly support what the previous speaker Mr Roy said about the deficiencies of this particular part. I do not want to deal with the purpose provisions because they are now the subject of some amendment. But I would like to deal with what is clearly a gap in this legislation—a gap that others have recognised—relating to residential letting leasing and property management because if the bill were to be extended the extension would take place in this part in substantial measure. 
Members have heard the argument that residential letting leasing and property management should be brought within the coverage of the bill. That would not be very difficult. It could be done by removing the phrase “(other than a tenancy to which the Residential Tenancies Act 1986 applies):” from the definition of “transaction” in clause 4 and by amending the definition of “real estate agency work’’ or “agency work” in clause 4 to include something that might be expressed in this way: “does include the management of leases and tenancies on behalf of another person including the collection or receipt of rent money”. If those changes were made then that would be sufficient to deal with the issue that has been identified as a looming lacuna in this bill. 
Some would say that those changes might carry with them a need for substantial adjustment of the transitional period—and there has been a minor change to that transitional period—but I question that because I think only a very short transitional period would be needed to bring property management under the regime. Why do I say that? Because the current residential property managers’ code of practice and the current property management strands in the National Certificate in Real Estate for salespeople can be very easily adapted to suit this purpose. That was the issue Mr Finlayson was trying to get across to the Minister when he made those points in his second reading speech. I also think there is a strong case for commercial and industrial property management to be included in the legislation. It should not be simply limited to residential letting leasing and property management. 
I would like to pick up on another important point that Mr Finlayson made in the course of his comments on this part because he usefully drew our attention to a series of omissions that have been made with regard to clauses 9 10 12 and 13 in Part 1. These include an exemption for Landcorp Farming Ltd an exemption granted by the authority and some other provisions. What does remain? As Mr Finlayson identified what remains is clause 11. To the challenges that Mr Roy laid down to the Minister in the chair the Hon Clayton Cosgrove—which I hope he will respond to—I would just add that I invite him to look for a moment at clause 11. Clause 11 now states: “A person who is exempted by a regulation made under section 155(aa) may in accordance with that regulation carry out real estate agency work.” So there is a reference to later provisions contained in a later part that will be the subject of debate. But if we look at clause 155(aa) we see that in very broad terms it enables the Governor-General in the case of any person or class of persons to make an exemption. 
The challenge I am throwing down to the Minister is to briefly explain what the current exemptions are but more specifically to invite him to consider the work that has been done by the Regulations Review Committee relating to the use of exemptions. I ask why in this case it has been deemed to be appropriate to depart from the Legislation Advisory Committee recommendations and guidelines for exemptions of this type because I believe that the power to grant general exemptions to people or classes of people from the requirement to be licensed should be removed from the bill. If exemptions are to be made then they should be expressly provided for in primary legislation and clause 11 therefore should also be omitted. The Minister should comment on that. It is simply not appropriate to confer by way of delegated legislation a privilege on a person or a class of persons for no good reason. 
If the power to grant exemptions remains then surely the bill should be amended to require a clear code to be established for the circumstances in which exemptions should be granted. There should be an obligation to consult with affected parties certain factors should be laid down that can properly be considered consideration should be given to the effects of granting an exemption on persons who are licensed under the legislation and are not subject to the exemption reasons should be given for the granting of the exemption and of course it should be clearly recorded that the Minister who will in effect be promoting the regulation is satisfied that granting the exemption will give effect to the purposes of the bill. I ask why it is appropriate to depart from the clear guidelines laid down by the Legislation Advisory Committee in the way that has been done here. 
Those are the issues that I seek the Minister’s response to. He cannot sit there lamely not responding to the issues that Mr Roy and I have laid down by way of challenge. 
CHRIS AUCHINVOLE (National) 
: 
 I would like to speak on the exemption for licensed auctioneers in Part 1. Clause 8 states: “A person who is licensed as an auctioneer under the Auctioneers Act 1928 may sell or offer to sell any land by auction.” I was not involved in all of the proceedings of the Justice and Electoral Committee on this bill but I remember being present for the meeting when we received submissions on the requirements where land was sold by auction. 
The submissions overall as has been said by others here today were detailed and the meetings were often intense occasions. Rightly or wrongly a large section of the real estate industry had developed real fears associated with the bill and the implications that it could have on long-serving dedicated practitioners who had been working in an ethical and thoroughly professional manner often within small communities. There was a movement throughout the industry that generated a particular point of view that did not help those who were uncertain. The fact that there were so many submissions on a very complex piece of regulatory framework would have been hard to manage in any circumstances. 
The other aspect is that other members who have spoken this morning—and I would perhaps put myself in the same category from a technical point of view—do not really have a fixed understanding of the way the real estate industry and particularly auctioneering works. In respect of clause 136 relating to the requirements where land is sold by auction I think it was Sue Bradford who had the decency to recognise this lack of understanding. In her speech this morning she said she had a complete lack of knowledge of auctioneering. I guess that this situation would have got the select committee hearings off to a rocky start. I am not sure that the officials had other than a textbook understanding of auctioneering. 
The rocky start was not necessary and did not help but I can appreciate that for those not involved in auctions and auctioneering it is a system full of mystery uncertainty risk and it has potential for deception. It is none the less probably the world’s oldest system of having a commercial exchange of goods by competitive treating amongst a group of people with a common interest in an item or items of property. There were reports of auctions being held on battlefields in Roman times as a means of personal property disposal. The system in its simplest purest form is exactly that—it is simple. It is a call and a response. Goodness only knows who dreamt up clauses 137 to 141 but on the very first day of submissions it certainly lifted the eyebrows of lifetime-experienced auctioneers right over the top of their heads. 
So that those who are listening to this stage of the debate on the Real Estate Agents Bill can understand what we are talking about I point out that the legislation states that any auction for the sale of land whether the person conducting the auction is a licensee or licensed auctioneer under the Auctioneers Act 1928 must have a bidders record before any bids are taken at an auction. 
The CHAIRPERSON (Hon Clem Simich) 
: I am just wondering whether you are of the view that you are on Part 5. 
CHRIS AUCHINVOLE 
: No we are dealing with Part 1 Mr Chairperson— 
The CHAIRPERSON (Hon Clem Simich) 
: Good. 
CHRIS AUCHINVOLE 
: —where it lists auctioneers as being licensed to conduct sales. These conditions pertain to it so it is relevant from that point of view. The person’s name and address and the reference to one or more documents by which the identity of that person is proved is provided to auctioneers who perhaps are also involved in the sale of goods and chattels cattle and sheep and all of that sort of thing. Not only does one have to get the person’s name and establish a bidders record but also one has to have some document that identifies someone as the correct person. It goes on. In the case of the person bidding on behalf of another person the name and address of that other person and the reference to one or more documents by which the identity of that person is proved must be produced. Clause 137(5) states: “The person engaged to conduct the auction must keep the Bidders Record for at least 3 years and must keep all the Bidders Records made by the person together in the form of a register of Bidders Records.” That was a needless regulation. 
Hon DAVID CARTER (National) 
: 
 Mr Chairman I want to raise two further points to do with Part 1. The first point is in relation to clause 9 which through the select committee process in the Justice and Electoral Committee has been deleted. That was a surprising exemption clause for Landcorp Farming Ltd. I want to know what the rationale was for the Minister the Hon Clayton Cosgrove as he put this legislation together to say there should be a regime for everybody else within New Zealand but that regime should not apply to Landcorp Farming Ltd. 
As the Minister will know from his days as a humble backbencher and from sitting on the Primary Production Committee the Landcorp Farming company is actually involved in significant numbers of residential property sales particularly around the likes of Lake Taupo. It seems to me that this Minister armed with that background information should never have contemplated dealing with the cowboys and land sharks as he calls the industry and then saying one particular State-owned enterprise with which he was familiar should be exempted. So I would be very very interested in the Minister taking a call and explaining the rationale for the inclusion of clause 9 in the bill originally. I am very very pleased that the select committee saw fit to remove that clause. I guess it has done that on the basis of saying “one law for all”. If the law is good enough to apply to the industry generally it should also apply to our own State-owned enterprise Landcorp Farming Ltd. 
The second issue that I want to make sure the Minister has done his homework on is around the definition of an “agent”. Here we now have the definition of an agent meaning “a real estate agent who holds or is deemed to hold a current licence as an agent”. Does that include a cowboy? The Minister has gone out there and said all land agents are sharks and cowboys etc. and they cause carnage. And here he has a fairly defined definition of an agent which seems to me to exempt anybody whom we might possibly have classified as a rogue agent. The Real Estate Institute of New Zealand is involved in a process of licensing these people. All it wants is the ability if there is an occasion where somebody becomes a rogue agent to in fact deal with that person. It has been asking for that and for modernised powers for a long time. 
Perhaps if that definition is not suitable to define a cowboy then the Minister ought to think quite seriously about including specific definitions of a land shark and of a cowboy. I say to the Minister that despite his rather extravagant outbursts and the bullying and arrogance around this legislation he is not right to label the great majority of real estate agents as cowboys because they are not. They are not cowboys and they are not land sharks. 
The Minister at the end of my earlier contribution interjected with some derogatory remark about me being a property developer. Well if the Minister means by that that I have had considerable dealings with and sold properties through real estate agents that is true. There is nothing wrong with doing that; I had every ability to engage somebody if I wanted to. I also had the ability if I was not happy with the system to actually attempt to do it on my own without involving the services of the industry. That has always been a choice available to people. It is interesting to me to note that when most people come to sell property whether it be industrial commercial rural or residential property they do not choose that path. They make a decision to engage somebody because they think the expertise offered by that person will actually further the value of the sale that they are about to engage in. 
So if the Minister would rise to his feet and earn his keep then I would be very very grateful because I think he could help the debate by answering a few of the questions that have been raised. 
The other very interesting comment that I would like to pick up on is something that I picked up from NewsRoom dated 11 October 2008. Mr Cosgrove stated then: “Every day you wake up there is incompetence more silliness and in this case alleged fraud.” As those comments were made nearly a year ago I just wondered whether he did not have some sort of premonition of what was to happen to his own Government. I think we are very definitely talking about incompetence more silliness and in this case alleged fraud. 
GERRY BROWNLEE (National—Ilam) 
: 
 I do want to make several comments on this bill. It raises the fundamental question about why we need this bill in the first place given there is currently an Act that guides a great deal of the activity of real estate agents in this country. The purpose of the bill states that it is for the protection of the interest of consumers in respect of transactions that relate to real estate and promote public confidence in the performance of real estate agency work. That immediately leaves us with the question about the range of work that a real estate agency undertakes. Right now it is not only the listing of properties the advertising of properties and the sale of properties—although technically they do not sell them they facilitate a sale between a seller and a purchaser and they connect the parties in a way that keeps them I suppose in a position of protecting their own interests—but also the extensive engagement in property management. Nothing at all in this bill deals with that aspect of their business. 
No doubt the genesis of this bill was a great deal of publicity made some time ago about one or two rogue performers in the real estate industry. It would be hard then to imagine why we need to turn the whole of the industry on its head with this Act when in fact there would not be a single professional body in this country where there are no rogue operators. Everyone regularly hears about the Law Society having to take action against some of its members for all sorts of things—perhaps coming to Parliament and telling porkies to a committee or covering up activities of someone deemed to be a client. These sorts of things happen and the Law Society duly takes the appropriate action to protect the integrity of its members. Similarly one could say that about the teaching profession and the medical profession. Periodically there are cases of doctors who go off the rails and they are discussed. If we look at all the professional bodies we see they all have some form of legislative protection and arrangement around the way in which those professionals may operate and we may find that there are rogue operators at various times. 
So what was the necessity to tighten up so very much on the real estate industry? I commend the efforts of the Real Estate Institute. It has said it wants to get tougher and wants changes that will enable it to get tougher. But I also accept that the provisions of this bill are just a step or two too far. One of the problems that beset the economy in New Zealand is the extraordinary cost of doing business. It is much higher than in many other countries in the world and when it comes to real estate New Zealand has some of the most expensive transactions anywhere in the world. I know we see people out there offering to do the job for 1 percent of the sales fee etc. but that is always on top of a range of costs that are pre-prescribed and generally prepaid by the vendor. In New Zealand it is not uncommon for real estate fees to be 4 to 5 percent. A fee of 4.75 percent is common and then there is a base fee as well. There is a range of fees up to that sort of level. It would be interesting to know why anyone would expect that this bill will lower that cost. We should surely be always looking to remove costs from our economy through legislation rather than at loading them into the economy through legislation. 
It would be interesting to hear from the Minister just how he thinks the changes he has proposed to this bill make it any more palatable to those who are on the other end of the bill. I suppose it would also be interesting to hear some recitation on the consultation that might have taken place. The Government is very strong on saying it consults widely and seldom moves without widespread acceptance of what it is doing. That is a little hard to understand given the current nature of polling but I will not go down that track. It would be interesting to hear from the Minister how he has been persuaded to change his mind. 
SIMON POWER (National—Rangitikei) 
: 
 I make myself available to the Committee after undertaking other business this morning to make a contribution on the Real Estate Agents Bill which I have taken a long and personal interest in since it was introduced into the House by the Minister the Hon Clayton Cosgrove. I decidedly recall the Minister saying to me across the Chamber that the National Opposition’s decision to oppose the bill because of seven or eight things we were concerned about would be a major problem for us in coming months. The problem for him was that it was not and we have seen from the Minister—and I am sure my colleagues alluded to this during the second reading debate—a major back-down on several of the matters we raised right at the first reading of the bill. 
The Minister quite rightly was initially concerned—this relates to the purpose clause by the way—about people whose decisions on savings and the purchase and sale of real estate were not receiving the type of service that the country would expect from real estate agents. The problem in addressing that of course was that instead of taking an approach that could have been considered to be thoughtful and forward-looking the Minister chose to take the opportunity to make a few political statements around the place. I thought the Minister’s choice of phrase was interesting. I have to remind the Committee of the fact that the Minister announced six times at the last count he was going to review and rejig the real estate industry before we saw a bill. 
We finally got the bill and found the curious thing was that clause 3(1) states “The purpose of this Act is to promote and protect the interests of consumers”. No one has ever argued with that; National has always said that should be a paramount issue. Whether we have to legislate is another issue but the fact is that the bill’s purpose is to promote and protect the interests of consumers. The most extraordinary addition to clause 3 is this: “… and to promote public confidence in the performance of real estate agency work.” That makes sense too as the Minister has been knocking the industry about the head and face—metaphorically of course—for the last 6 or 7 months. I now see that at the last moment the Minister and his officials have decided to flip the coin completely and promote public confidence. I tell the Minister that the easiest way to do that is to talk about the industry in a positive way and suggest legislation that could help to craft such positivity and such consumer confidence over the years to come. 
I am staggered after all the newspaper column inches I have read about the Real Estate Institute and how appalling the industry is that the Minster then decided to put forward Supplementary Order Paper 243 in his name—yesterday I believe or maybe the day before. Many of the proposed amendments on it were contained in National’s minority report on the bill. There are three areas of the Supplementary Order Paper where we would take exception with the Minister and those are around the experience matters which the Minister has changed the transitional period which by my reading of it he has increased by only a couple of months and of course the elusive issue of the non-inclusion of property management. 
I know that the Minister will argue as we have heard that property management could be seen to be outside the scope of the bill but as we know that matter could easily be addressed by leave of the Committee of the whole House. I would be interested to know from the Minister who is sitting there quietly and thoughtfully—it is a pity he did not do that 6 months ago—whether he would be prepared to put that leave and see whether we could indeed by the will of the Committee include property management in the bill at this point in time. I know many of the political parties represented here this afternoon would be prepared to help officials to draft an amendment to that effect so we should test the Committee in order to see its will on that point. 
I said during the first reading debate on this bill that had the Minister adopted the approach that his colleague the Hon Lianne Dalziel did in dealing with the financial advisers legislation and the matters surrounding those reviews this bill could have been dealt with I would imagine cross-party in a pretty constructive and deliberate way. There would have been disagreements on some things but overall there was no need for us to have such a fiery first start to this legislation. We will be working our way through the Committee stage in a part by part debate unless the Minister is of a mind to do so clause by clause. Either way the National Party will be here to address the issues throughout the afternoon and evening. I think the important thing is that the Minister is convinced as we go through the bill part by part that the amendments he is now proposing—having rejected them initially—are up to scratch and will do the job he wants to do. 
I am just signalling as part of the debate on the purpose clause that we are ready to have quite a detailed discussion with the Minister during the debate on the remaining parts of this bill. I have no doubt that he is up to the task but I want to know from him—and I would be grateful if he took the next call—whether he thinks the new Supplementary Order Paper 243 could be further worked to ensure that the amendments present and needed for this legislation to work properly—those proposed by National in its minority report—are considered as part of this process. I would also be interested to know whether the Minister is prepared to seek the leave of the Committee to include property management as part of this bill. If he is then again in the interests of progressing matters we are happy to put the offer to the Minister to draft something for him this afternoon and tonight. I am sure he would be happy if he agrees to that to make his officials available to give us a hand with that so we will move to try to test the Minister on that issue later today. 
Ultimately what has occurred here is that the Minister decided he would dig in and take some political opportunities 6 or 7 months ago. To be fair to him he held fast for a very long time. Then it became clearly obvious that what National had been saying at the first reading of the bill and what other parties had mentioned not only in the first reading but also during the select committee process in the Justice and Electoral Committee was that the bill as proposed simply was not doing the business not just for the industry—which to be fair is a major player in this legislation—but also more particularly for the consumers who use the industry to buy or sell real estate. 
I was not able to be there all of the time during the select committee process but I did enjoy the odd visit when the discussions on this bill were being undertaken and in fairness I acknowledge that members of the committee from the Labour side were interested in having detailed discussions about how the clauses in the bill would work. I felt a bit sorry for the officials because they were moving around a bit in the dark early on in the sense that it was not clear whether the institute or anybody else who had been consulted prior to the first reading was being consulted during the course of the bill being before the select committee. If the Minister can help us with regard to that point it would certainly help to clear that issue up once and for all. 
I am signalling that it is worth saying to the officials involved in this process that their efforts were not unnoticed. They did the best they could do with something that people tried to make into a political hot potato. In the end it really just did not fly because legislatively— 
Hon Clayton Cosgrove 
: Potatoes don’t fly. 
SIMON POWER 
: It depends on whether one throws them I say to the Minister. Legislatively there was always going to be a difficulty with the acceptability and practicality of this legislation given that it deals not just with the industry but also with consumers and its relevance to their buying and selling of real estate. Those issues of course meant that complex questions around the Lawyers and Conveyancers Act and the financial advisers legislation had to be taken into account when coming up with this bill and its purpose which is contained in Part 1. I know that Gerry Brownlee Lindsay Tisch Christopher Finlayson Kate Wilkinson and others will be talking about this matter in some detail. 
I want to finish by saying this to the promoter of this bill: it is not too late; we can still fix the bill. I know that the Minister has made a substantial shift in producing Supplementary Order Paper 243. If he had just gone a step further I am sure the bill would be moving at a much faster pace than it will be moving at this afternoon and this evening. 
GERRY BROWNLEE (National—Ilam) 
: 
 I wonder whether the Minister in the chair might be good enough to turn his attention to clause 6(3) of the bill which states: “For the purposes of this section it is immaterial whether or not a person carries out any agency work as a business in its own right or as part of or in connection with any other business.” The reason I am raising this is that when we see legislation rushed through Parliament we are left with the impression that there must be a few things in here that have not been properly considered. I take the Committee back to the definition of “real estate agency work or agency work” which is contained in the interpretation clause. It states: “(a) means any work done or services provided in trade on behalf of another person for the purposes of bringing about a transaction;”. Well that immediately raises the question about the status of private sales and about the status of deceased estates being sold within a family or for that matter outside a family—private sales between parties who are perhaps consenting over the values and property swaps. It raises the question about mortgagee sales and the way in which for example banks might cluster and group those sales. 
And then it raises other questions. Let us look for example at the recent purchase of a number of properties by the Christchurch City Council from a property developer in that city. Given that those properties were on the market but the parties did an off-market deal there is no doubt that the staff of the council effectively put themselves into a position under this legislation of being the agents who facilitated that particular transaction. It is interesting to note that the catch-all provision of “any other business” would tend to rule out the suggestion that it has to be a related business—a business related to the activities of a real estate agent. There is no suggestion of that at all. 
I think that that potentially causes quite a bit of a problem because we know that off-market sales occur frequently. We know that quite often if someone is the executor of an estate he or she may go out to relatives or family friends or others who are not direct beneficiaries of any particular estate indicate that there is a property for sale and then start to negotiate a deal. Well it would seem that under this particular law that will now not be possible. It will force people to accept the expense involved in taking on a licensed operator in order to give effect to that transaction. 
I am sure that is not the intention of the committee or even of the Minister. It will I think substantially slow the transfer of properties which might rightly be done outside the usual practice of working through licensed real estate agents. It is of course a fact that lawyers’ offices the Public Trust various banking institutions and others will not have a great interest in lining up with their papers all put together to become licensed real estate agents. 
That may not be the worst of it. I think by the reading of this bill the worst of it is that private sales between individuals are most certainly caught. It would be interesting for the Minister to offer the Committee his view on that particular point. 
It is interesting to note too that agency work “includes any work done by a branch manager or salesperson under the direction of or on behalf of an agent to enable the agent to do the work or provide the services described”. There are hundreds of people in this country who work as assistants to real estate agents. They are not real estate agents in their own right and they do not advertise their services. They may well under the instruction of the agent open up a property so that someone can view it. But they do not turn up with the papers that get signed in order for the transaction to take place. They are simply an assistant yet it would seem they are now caught under this bill and will need to meet all the requirements that this bill puts on real estate agents. 
Hon PETER DUNNE (Leader—United Future) 
: 
 I will take a brief call to give notice to the Committee of four amendments that I will be moving to various clauses in Part 1 of the Real Estate Agents Bill. There are three amendments to clause 4 and I just want to draw the attention of the Committee to those. The first amendment relates to clause 4(c)(i). The proposal is to omit that wording because what that definition does is define the scope of activities of real estate agency work or agency work. The amendment effectively says that the removal of a prohibition on the provision of general advice or materials to assist owners to locate and negotiate with potential buyers is actually logical. If we say that that activity by agents is excluded from the definition then in fact one of the major areas of concern that people might have is also being excluded. 
My second amendment relates to clause 4(c)(v) and that is to remove the reference to the provision of investment advice. At the moment we have this rather strange situation where real estate agents providing what might be described as investment advice to clients is permissible. That is permissible under this bill because it is deemed not to be a definition of real estate agency work or agency work. It seems that that is actually a major omission. It may well owe something to the rather negative way in which this particular clause has been drafted. 
The next amendment is a more technical one to the definition of a transaction being “the sale purchase or other disposal or acquisition of a freehold estate or interest in land:”. I am proposing to add the word “grant” because otherwise we do not have any capacity to deal with the issue of letting and leasing. An amendment along those lines would bring in the scope that the legislation intends. 
My final amendment to this part relates to clause 8. I simply propose the deletion of clause 8 for a very simply reason. Clause 8 as it stands introduces an exemption for licensed auctioneers. In fact in the bill as it stands auctioneering generally is excluded yet it is a major part of the real estate industry and the amendment would bring the auctioneering side of the business into the scope of coverage of the legislation. 
I have some other amendments to subsequent parts of the bill and will deal with those as we come to them. But I would ask the Committee to give consideration to those matters. I do not think they are in the main contentious. I think they are designed to make this legislation work as intended and laying aside one’s opposition to the principal Act it is always a responsibility of the House to make sure we get the best legislation in place. I simply ask the Committee to give consideration to those amendments. 
LINDSAY TISCH (National—Piako) 
: 
 I congratulate the previous speaker Peter Dunne on the amendments he is bringing forward. I think they add value to the bill. I do not find the bill as it stands to be a negative one. It is a gut reaction to a concern in the market place. I think the deletions the member proposes add value. I cannot speak for National as to whether we will support them but certainly from my point of view— 
Eric Roy 
: Yes we will. 
LINDSAY TISCH 
: We will be supporting them. The first amendment he mentioned affects paragraph (c)(i) of the definition “real estate agency work” in clause 4. It was the next one that really caught my attention and it affects subparagraph (v) dealing with “the provision of investment advice;”. I am sure there are a lot of experts out there in the market who say to people that if they purchase such-and-such a property they will get a rate of return guaranteed cash flows or whatever. If members have ever been to property seminars they will know that those sorts of things are very much to the fore. Unwilling people have been captured by too-good-to-be-true growth potentials and returns. I am sure that if this subparagraph is not taken out we will have a problem. The issue goes back to other bills the House has been debating over the months. I think the Financial Advisers Bill also encapsulates it. The point the member makes in terms of his amendment deleting that subparagraph certainly would add value. I did not catch what the fourth amendment was but the other one I did pick up on was to omit clause 8 “Exemption for licensed auctioneers”. I am sure that when we further debate these provisions Peter Dunne will have the support of National for his amendments. 
I want to go back to the genesis of this bill. It is interesting that although there has been some concern about the cowboys out there—people who have not operated in the professional way that one would expect—that situation is not unique to this industry. It happens in every occupational class. One can identify it happening right throughout other professions whether it be the medical profession the accountancy profession or the field I come from. I am a valuer by profession. [ 
Interruption 
] I did not quite catch the point of the Minister in the chair the Hon Clayton Cosgrove; would he like to repeat it or is he going to mention it when he responds to my questions? Even in the valuing profession which I was a member of for many years there has been a question mark over some of the practices that have been carried out. The situation is not unique to real estate agents. 
The industry has said that some people should not have been in it and they have disengaged after bringing the industry into disrepute. There is no place for those people in the industry. It does not matter where such people come from; they should be removed. When I look at the interpretation of “agent” in clause 4 I see that it “means a real estate agent who holds or is deemed to hold a current licence as an agent …”. Well so what? What does that actually mean in the market place? To my mind it gives absolutely no protection. If this bill is designed to protect people who are using an agent I have to say that it absolutely does not do that. 
One has to ask where the mischief is. What has actually gone wrong that makes this bill necessary in the format it is in? Where is the harm? That question was put back on 11 December 2007 when my colleague Simon Power spoke in the first reading debate. I will quote him specifically. It is in  
Hansard 
 Volume 644 at page 13817. He quotes people as asking “Where’s the evil?” “Where’s the harm?” and “What is it that this legislation is trying to address?”. Do members know what the Minister said at that time? I shall quote the Minister’s response in an interjection: “A listening Government.” Well if he is part of a listening Government—and that is what we read on page 13817—if the Minister is in tune with and is prepared to look closely at the issues that have been identified he would not be making comments about agents being “land sharks” and “B-grade goon shows”. That is what the Minister said. It is mentioned here. 
Hon Clayton Cosgrove 
: Just the bad ones. 
LINDSAY TISCH 
: Well a “B-grade goon show” is not a way to describe this sort of industry. If one wants to build goodwill with an industry one has to get alongside the people in it and work with them. The Minister says the Government is a listening Government; I say he is out of tune. He is out of step— 
Hon Clayton Cosgrove 
: Tell the victims. 
LINDSAY TISCH 
: The Minister talks about the victims. What about the “willing seller willing buyer’ concept? What about caveat emptor? What about somebody who is about to make an investment actually getting some independent advice whether from an accountant or a lawyer? A lot of the problems have happened because people take at face value what they are told and believe that it is kosher. They do not look behind the scenes. We have always advocated— 
Hon Clayton Cosgrove 
: So it’s their fault. 
LINDSAY TISCH 
: No it is not their fault; it is just that they do not understand and they do not know. But the Minister cannot label land agents a “B-grade goon show”. That does absolutely nothing I say to the Minister for the reputation of this Government in trying to work out a programme going forward. 
The industry is looking for change. It has identified that. It is not averse to change. It is saying that it wants legislation of the time. It wants to make sure that in this new century it meets the demands of the market and safeguards its customers. The worst thing that can happen is that agents get a bad name and people do not use them or look elsewhere. At the end of the day most agents are on a commission. Their jobs are based on a commission. They have to build up goodwill because if they do not they are down the road. Possibly the one good thing about the commission system is that only the good agents survive. 
Gerry Brownlee talked about the excessive fees paid to agents. Well there is no harm—and I have done this in the past—in negotiating a deal in negotiating a flat rate. That is acceptable. If people are in a position to do that then moving to a flat-rate arrangement can work extremely well. 
In the final minutes of my speech I want to ask the Minister a question. He can respond after the lunch break. The interpretation clause talks about “real property”; does that term include mussel and oyster farms? I do not know the answer to that. I have asked about it because we are talking about property. But if we are talking about leases on mussel farms— 
Hon Tariana Turia 
: I’m wondering whether real estate agents are involved in selling mussel farms. 
LINDSAY TISCH 
: Well we are talking about property are we not? I am talking about a lease which is tradable. People have an interest in it. There are mussel and oyster farms throughout my area. There are farms in the Firth of Thames the Coromandel the Marlborough Sounds and in Big Glory Bay on Stewart Island. There are a lot of such properties out there. 
Sitting suspended from 1 p.m. to 2 p.m. 
LINDSAY TISCH 
: I put to the Minister a question specifically relating to clause 4 “Interpretation” about what was included in the term “land” the definition of which talks about “real property”. The question I asked—and I would be interested in a response from the Minister—is whether mussel farms and oyster farms are included— 
Hon Clayton Cosgrove 
: No. 
LINDSAY TISCH 
: Well I would like a more specific answer than just “No.” When the Minister takes a call he might like to explain it to the Committee to me and also to Tariana Turia who was interested in the question I was asking. If those farms are not included in “real property” we want to know why. 
Hon Clayton Cosgrove 
: Only land. 
LINDSAY TISCH 
: The definition talks about “interests”. A mussel farm does not just float there; it is actually on something and I want a more specific answer than just “No.” 
My colleague the very learned lawyer Kate Wilkinson who has interests in the real estate world and understands the complexities of it and who in her time as a lawyer handled many real estate transactions has asked some specific questions that we would like the Minister to respond to. Again they relate to clause 4 “Interpretation” and specifically to the definitions of “agent” “residential property” and “transaction”. Specific questions were put to the Minister by Kate Wilkinson. I hope that over the luncheon break the Minister’s advisers were able to come forward with some very clear answers to those specific questions. They are not difficult questions. We want to know what those terms mean because they form part of legislation that will be voted on shortly. 
I end with those words finalising what I was saying prior to the luncheon adjournment. I look forward to the Minister’s response. 
The question was put that the following amendment in the name of the Hon Peter Dunne to clause 4 be agreed to: 
to omit subparagraph (i) of paragraph (c) of the definition of real estate agency work or agency work. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Noes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Peter Dunne to clause 4 be agreed to: 
to omit subparagraph (v) of paragraph (c) of the definition of real estate agency work or agency work. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Noes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Peter Dunne to clause 4 be agreed to: 
to insert in paragraph (a) of the definition of transaction “grant” before “sale”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Noes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Peter Dunne to clause 8 be agreed to: 
to omit this clause. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 52 
New Zealand National 47; ACT New Zealand 2; United Future 2; Independent: Copeland. 
Noes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 243 in the name of the Hon Clayton Cosgrove to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Part 1 as amended agreed to. 
Part 2 Real Estate Agents Authority 
Hon CLAYTON COSGROVE (Associate Minister of Justice) 
: 
 I do not want to labour the process because I know that National Party members are very keen to debate the bill. They have sought to debate this bill; it is the one they will fight every inch on. It is a bill that is inherently about consumer protection but I feel it is incumbent on me to address some points that have been made and will continue to be made as we move through the parts of the bill. 
I would like to make this point. One of the charges against me personally and against the Government is that somehow in putting forward robust consumer legislation to protect consumers as a representative of the Government I have labelled and sprayed the entire real estate industry as a bunch of land sharks. Well I will say just two things. I invite members to get my press statements from the first one that I put out right through to the latest. I invite them also to listen to this. On 7 June 2007 Murray Cleland the National President of the Real Estate Institute said in that wonderful journal of our time the  
Papakura Courier 
: “We want to get rid of unethical operators as much as the Minister does because they damage the industry’s reputation and do a great disservice to all the good”—and I invite members to listen to this—“hard-working people in the industry who as the Minister acknowledges are the very great majority.” Despite the fact that the National Party has continued to perpetrate the myth that this Government in the form of myself has labelled everybody in the real estate movement as a shark as a deadbeat and as dishonest the fact is as reported in many papers and as acknowledged by the president of the institute on 7 June 2007 the vast majority of this industry are good honourable folk. In fact I appointed one of them Mr Murray Giera of Christchurch—I know that Ms Wilkinson did not like this—to the Real Estate Agents Licensing Board. 
But real estate folk who are also the victims have said to me that they have had a gutsful of being tarred by the same brush as members of their industry who through their actions bring the reputation of all of them to the floor. Murray Giera said that to me at a function the other night. He is a good honest person as many real estate agents are but all occupations are judged by the lowest common denominator. 
I will also comment on a couple of other points that have been raised. I found it exceptionally interesting that Mr Finlayson said that the time frame and the transition period for this bill were OK. Members should bear in mind that the time frame for the lawyers and conveyancers legislation—a massive piece of work—was 2 years but the time frame for this bill is 14 months. Mr Worth had risen 5 minutes before him and said that it was not OK that it was far too short. I invite those members to get their act together. 
Part 2 provides robust legislative protection for consumers. I have been asked and I will continue to be asked—I am told that Mr Tisch said he would be asking the question continually—what the mischief is that we are trying to solve. Those members are typical Tories. They listen to one side of the argument. They have not quoted one consumer who has had problems. They have not quoted one victim who has had problems. Those members stare into the stratosphere and ask us to please provide them with some answers to please tell them where the problem is that we are trying to solve. Well let me illustrate it. Caitlin and John Ottaway estimate that they lost $35000 because their agent Shaun Cosgrave—who is no relation to me I say for the record; it is a different spelling; it is from a different part of Ireland—did not tell them that an apartment complex was planned for the site right next to their doorstep. Shaun Cosgrave was fined $750. I believe he was warned by some of our agencies about his conduct. Then what happened? 
Christopher Finlayson 
: I raise a point of order Mr Chairperson. Could the Minister tell us which aspect of Part 2 he is addressing? Part 2 deals with the Real Estate Agents Authority. He took no part in the debate on Part 1. His first intervention this afternoon has been to comment on clause 2 the commencement clause which we can deal with later on. He seems to be all over the place. It is quite entertaining to watch him because it is like watching feeding time at the zoo. If he could confine himself to Part 2 it would be very helpful. 
The CHAIRPERSON (H V Ross Robertson) 
: Thank you Mr Finlayson. I am sure the Minister is aware of the situation and I ask him to come to Part 2. 
Hon CLAYTON COSGROVE 
: I am talking to Part 2 “Real Estate Agents Authority” and the authority is charged—as the member may know given that he is a learned lawyer—with protecting consumers. To illustrate the need for an authority to look after consumers and also to address some of the points that have been made I will quote another case. But first I will just add that Mr Cosgrave was then given the Harcourts gold award for customer service. 
The second case I will quote also illustrates the need for an authority such as the one in Part 2. [ 
Interruption 
] Yes because there is a need for an authority to stop these cases from happening again. Bronwyn Hilbron died after waiting almost 3 years for the Real Estate Institute to deal with her complaint over the sale of her house. She claimed that an agent had undersold it by $88000. She chose the existing legislative route which was the institute. 
An honest agent said to me that there is a need for a Real Estate Agents Authority. He has had a vexatious claim—in his view—taken against him and he has waited for years and years for the legislative body to deal with his case. The authority is not just for those who are selling and buying property; we need an authority to expedite cases so that honest honourable real estate folk do not have the sword of Damocles hanging over them for years. To use the popular phrase that Ms Wilkinson uses justice delayed is justice denied. That also applies to the real estate agents who cannot get cases against them heard because there are delays in the system. 
Real estate agents have said to me that they need an independent authority because the system does not work. I believe that it was the Chief Executive Officer of Harcourts Mr Bryan Thomson who said that even if his people are innocent even if they are good honourable folk if they go before a body that is perceived to be in-house—the industry policing the industry—and that body declares them to be innocent folk because they are honourable people then no one believes it. We hear bleating from the guy opposite who did not quite make it to Queen’s Counsel level; he says he is a lawyer but he has not cited one case. I find it interesting that National Party members have not cited one case or given one example of a constituent coming to them with a problem with this industry. They probably do not go to them because it would be a waste of time. I think the setting up of an authority will provide a wonderful opportunity to get rid of the bad guys in the industry. Those good honest souls like Murray Giera and others who toil away and do a damn good job of representing their clients and their profession will have their reputations restored and the profession’s reputation will be restored. 
As we go through this debate I will count how many times members opposite cite a case relating to any victim. If we listened to them we would think that there was no problem—absolutely no problem at all—and that we do not need any consumer protection. Well I invite them to talk to Sue Chetwin of Consumer New Zealand. I invite them to lift up a few pages from the newspapers and look at the research work done by the fourth estate—no friends of ours from time to time—that highlights the need for legislation to protect victims. The victims also include the honourable honest real estate folk who get done over because they cannot have their cases heard. 
We hear a lot of posturing from National members and they are digging in but what are they digging in over? A basic piece of consumer protection legislation. The security guard people asked us to license them. Why? Because they wanted to get the rogues out of the system. Builders did the same. They wanted to get the bad guys out of the system because their reputations were being tarnished. I say to Mr Brownlee that I gave the Real Estate Institute two opportunities. And I said publicly that I believe in self-regulation because often it is tighter than what Parliament can do. But what the institute wanted to do was to up a few fines twist a few penalties but leave the process non-transparent non-independent and non-accountable. I think that would do a disservice to the many honourable folk in the real estate industry. 
This is good legislation. The authority that we are setting up in this part of the bill will deal to the bad guys will reinforce the good honest folk who work in the industry and will ensure I hope that cases like that of Bronwyn Hilbron who died and whose estate now has to take up the cudgels to try to recover what was rightfully hers do not happen again. It would be really nice it would be really wonderful to hear some sort of sympathy from Opposition members for some of the people—the many hundreds of people—who have been done over who have had bad experiences in this industry. But we will not hear those members say that and do members know why I say that? Because Opposition members voted against the amendments on Supplementary Order Paper 243 to Part 1 after saying that they supported them. They are all over the place. 
GERRY BROWNLEE (National—Ilam) 
: 
 I wonder whether the Minister in the chair the Hon Clayton Cosgrove might tell us why there is no fidelity fund attached to this authority. Why is he so confident that—[ 
Interruption 
] Well he is the honourable member of Parliament one minute and has a tattered career the next. That is how it happens: an honourable member one minute and a tattered career the next. That is how it goes. 
The CHAIRPERSON (H V Ross Robertson) 
: Get to the bill. 
GERRY BROWNLEE 
: I am not surprised that the Minister of Foreign Affairs is in the Chamber taking a great interest in the real estate bill because after the election he is likely to have to get a job selling real estate. 
Rt Hon Winston Peters 
: I raise a point of order Mr Chairperson. This Parliament has put up for long enough with this member getting up disregarding Standing Orders and Speakers’ Rulings day in day out and acting like a prize buffoon. I only raise this because there are some young people in the gallery today and they should not be subjected to this nonsense. 
The CHAIRPERSON (H V Ross Robertson) 
: Thank you Mr Peters. 
GERRY BROWNLEE 
: Speaking to the point of order I want to apologise to this Chamber and to members like Mr Peters for any concerns they might have. I would note though that today in evidence to the Privileges Committee— 
The CHAIRPERSON (H V Ross Robertson) 
: Both members will be seated. I just remind members that when there is a point of order it is supposed to be heard in silence. In both cases there was chipping by both members. I take it that it is one all at the moment. 
Rt Hon Winston Peters 
: I raise a point of order Mr Chairperson. You just saw what has become the practice by this member. He sits on a very august authority as an arbiter and a neutral judge. He walks into this Chamber on the very day that he is meant to be a jurist somewhere else and he now wants to tell you about the evidence. That is my complaint about this kangaroo court that he is making of it. Not only is he just about to infringe Standing Orders on the Privileges Committee procedures which apparently this morning were very very big in his mind but now he wants to offend against the rules of this Chamber as well. I ask you to bring him to order or to stop him speaking. 
The CHAIRPERSON (H V Ross Robertson) 
: I just say there was an exchange and I was listening very carefully. I ask the member now to address the bill. 
GERRY BROWNLEE 
: I will but I expect that there will therefore be no further reference to Gerry Brownlee Crown prosecutor or for that matter the “Rt Hon” Gerry Brownlee—which I do not mind in actual fact. 
Rt Hon Winston Peters 
: I raise a point of order Mr Chairperson. You were asked by Mr Finlayson to bring the Minister to order—wrongly of course because he was addressing the issue before the Committee. Now Mr Brownlee is now trying to raise an interjection under the Standing Orders that he finds offensive. Frankly if he cannot take an interjection—if the kitchen is too hot— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I have a yellow card in my pocket. It is just about to come out. 
GERRY BROWNLEE 
: That would be the last thing I would want to cause you to have to do. [ 
Interruption 
] I beg your pardon? Yeah right! 
The CHAIRPERSON (H V Ross Robertson) 
: Can we get on with the debate. We have had our fun. 
GERRY BROWNLEE 
: It is serious. It is a serious point and Mr Cosgrove the Minister was quite right to say there should be concerns about people getting ripped off in real estate transactions. He pointed out the very case that I believe was the genesis of this legislation in the first place: the extraordinary situation of one real estate agent in one of our northern cities who was given a real estate agent of the year award through an agency and then later was found to be quite corrupt in his practice. [ 
Interruption 
] The Minister says that perhaps it stopped short of that. Certainly his practices were not acceptable in normal business practice and people got burnt as a result of it. Indeed the Minister himself outlined a number of cases where people got badly burnt. 
But I think simply putting together an authority to manage aspects of real estate agency functions with the authority entirely appointed by the Minister with practices developed only with the Minister’s approval and with ethical standards and statements of responsibility only according to what the Minister is prepared to approve does little if there is not some sort of fidelity fund attached to it. New Zealanders pay some of the highest real estate agency fees in the world and I would have thought that if the Government was so keen to establish yet another bureaucracy that comes under the purview of a Minister then there might well have been a case for a fidelity fund to be established. I will lay this bet: that subsequent to the passing of this bill and subsequent to the establishment of the Real Estate Agents Authority the Minister himself will not accept any liability where there is bad dealing by those people. 
I think that makes the whole thing just a little bit thin. It makes it slightly a sham and it tends to indicate that the costs associated with this legislation loaded on to the costs of selling—and ultimately purchasing—property will simply increase without any greater protection than is in place at the present time. It would be interesting for the Minister to take a call and say exactly what will come out of the new authority that will give people any greater surety about their dealings with real estate agents than they have at the present time. That would be an interesting answer from him. 
We do not doubt the sincerity with which he has brought this bill to the House; we do not doubt that. We know that everyone in this House is concerned about those cases that he raised. But each of us in our constituencies would observe that hundreds of houses are sold in a year possibly even in a month without the sorts of difficulties he outlined earlier. So we are a little perplexed by the need to set up this particular authority and are even more perplexed that the authority’s seven members are apparently all going to be appointed by the Minister according to normal appointment practice. 
Christopher Finlayson 
: Normal Labour practice. 
GERRY BROWNLEE 
: My colleague makes a comment that I will not dwell on because we have had more of those appointments today. 
Hon DAVID CARTER (National) 
: 
 Again there is a particular clause in Part 2 that I want to discuss. It is clause 17 “Membership of Authority”. I want the Minister in the chair the Hon Clayton Cosgrove to confirm that he must name members of the authority within a couple of days of this legislation receiving Royal assent. If that is the case then I say to the member he should have done some homework now as to whom he is going to appoint as the seven members of the authority. I think the Minister should rise and tell us who they are. I am suspicious that we will see a repeat of what we saw at the weekend when the Minister of Conservation appointed 52 Labour lackeys to the conservation boards around the country. 
Hon Dr Michael Cullen 
: Ha! 
Hon DAVID CARTER 
: The Deputy Prime Minister laughs but there is a history of this. We had a member here; nobody knew her name and I had to ask the Parliamentary Library what it was. Her name was Dianne Yates. She got shunted out of Parliament at the whim of the Prime Minister and got about three or four prize appointments. 
Hon Maurice Williamson 
: Four. 
Hon DAVID CARTER 
: Four appointments. Well one thing is for sure. She is too busy to be a member of this authority. [ 
Interruption 
] I am talking about clause 17. I want to know who the members are. We know that two of them will be experienced people as licensees or former licensees but that leaves the appointment of five others. I want the Minister to confirm that when we talk about the member who must have “not less than 7 years’ legal experience” that is one Russell Fairbrother. He was the member of Parliament who was told he was not allowed to go on the list and does not have a show of winning the Napier seat from our excellent candidate Chris Tremain. 
So three slots are now filled—there are four left. I want to know whether the Minister himself would consider whether he would have a conflict of interest if in fact his name were to be advanced. I notice that he is well down the list that came out the other day at No. 18. Against Kate Wilkinson in Waimakariri he will not be back as a member of Parliament so will he fill the first of the four vacancies still remaining on the membership of the authority? Then I want to know who the others are. Charles Chauvel No. 27— 
Hon Maurice Williamson 
: Who? 
Hon DAVID CARTER 
: Charles Chauvel. He has not been here long and he certainly has not done much to contribute. He is standing in the seat of Ohariu so he does not have a show there and he knows it. He has been put down at No. 27. 
Rt Hon Winston Peters 
: I raise a point of order Mr Chairperson. With respect this member has been here some considerable time. One would think he might have learnt something in that time about the Standing Orders. This is a narrow debate yet here he is speculating on all the people who will not be on the authority under the pretence that he wants to know who will be. That was his opening gambit. Frankly this is a lazy indolent way of conducting a debate. It is typical of him and we could expect better. I want you to make sure he does do better. 
The CHAIRPERSON (H V Ross Robertson) 
: I ask the member to continue. I had actually indicated to the member a couple of times— 
Hon DAVID CARTER 
: Mr Chairperson I know you waved your hands but the point I make is that within 2 days of this legislation receiving Royal assent seven members of this authority are to be named. That is in the legislation. Now that we know the date for the election is 10 weeks away there is a longstanding convention in this House that there will be consultation between at least the parties in this Parliament on the appointments— 
Christopher Finlayson 
: There was a convention. 
Hon DAVID CARTER 
: There used to be a convention? Well I would hope that this Minister despite his bullying belligerent and arrogant attitude would actually stick to the convention. I therefore think we have every right to know what plans he has for consulting members of the National Party about appointments to this authority. 
The authority will have a very important job to do. It will deal with these hundreds of cowboys and land sharks who Mr Clayton Cosgrove says are in the industry. 
Hon Clayton Cosgrove 
: That’s right. 
Hon DAVID CARTER 
: He agrees now! Only 5 minutes ago he took a call to say that there are not many of them yet he now says there are hundreds of them. 
So the authority will have a lot to do and I want to make sure that it is not stacked with Labour Party lackeys and members of Parliament who know that they are in the last few weeks of sitting in this House because they have been put down on that Labour list well and truly towards the unwinnable positions. I think it is a very fair question for us to be asking. 
Hon Maurice Williamson 
: Lesley Soper? 
Hon DAVID CARTER 
: What is happening to Lesley Soper? She would probably be all right on this. But I think we have a very fair question to ask about the process for appointment—what work has been done so far to find who those seven members are and most important whether the Minister is prepared to consult before those appointments are made. They are very clear questions and I look forward to the Minister taking a call and answering them. 
Hon PETER DUNNE (Leader—United Future) 
: 
 I draw to the Committee’s attention a string of amendments that I have moved to various clauses in Parts 2 3 and 6 of the Real Estate Agents Bill. The amendments are designed to achieve two principal objectives. There are amendments to clause 16(3) to clause 19(c) to insert new clause 34A and to omit clause 155(a) because of the provision in new clause 34A relating to industry training procedures. Those amendments are designed to ensure that the industry training organisation for the real estate sector is actually consistent with all other industry training organisations in the tertiary sector in terms of the way that it operates. 
One of the amendments for instance—that to clause 19(c)—proposes the radical suggestion that “The authority must consult with the industry training organisation for the real estate industry.” It is very hard to see how that will be opposed but I suspect the Government and the Minister in the chair the Hon Clayton Cosgrove who gave my original amendments not even cursory consideration because he is so committed to the future of this industry will find a way to oppose it. He will also find a way to oppose my amendment to clause 16(3) which omits the words “subsection (1)” and substitutes “this Act” because that is clearly subversive. Those amendments are in the best interests of making this unworkable legislation more workable than it could ever hope to be as it stands at the moment. I have also included amendments to three provisions in clause 34 relating to consumer protection. 
I would have thought the Minister and this Government would relish these amendments because—as we have heard right throughout this debate—this is a consumer protection bill. It just imposes more costs on consumers and it will not work but according to the Minister it is a consumer protection bill. So anything that is in the interests of consumer protection I would have expected this Minister who clearly knows all and understands all to be supportive of. I would have expected the Minister to embrace my amendment to clause 34(1)(c) which inserts the words “in the interests of the public”. That is what he says this bill is all about. 
I submit those amendments for the consideration of the House and I make the observation that the Minister who professes such concern about consumers is actually engaged in a political vendetta. I have heard the cases that he has cited as evidence. The trouble is that they are the same cases I have heard cited for the nearly 18 months that this bill has been on the drawing board. In my 24 years as a member of Parliament I have not had one case involving a real estate agent drawn to my attention. 
Hon Clayton Cosgrove 
: Doesn’t that say something about you? 
Hon PETER DUNNE 
: The member says that says something about me. Well that is actually a wonderful summary of what this member actually believes that this legislation is all about. The issue— 
Hon Clayton Cosgrove 
: You’ve dished it out for the last 2 days so don’t get holier-than-thou. 
Hon PETER DUNNE 
: The Minister is indulging in all sorts of petty abuse when he should actually be indulging in making this bill workable. 
The Minister has presided over complete disruption: a regime that is unworkable and a bill that will have to be amended irrespective of whatever happens in this Committee because of the bull-at-a-gate way in which he has gone about it. If he wants to say to the homeowners of New Zealand that that is the standard he seeks that is well and good. If he wants to say to the real estate industry of New Zealand that he does not care what it thinks that is well and good. But let him be up front in the House and say those are his motivations not resort to crocodile tears about a few a handful of cases that have been drawn to his attention. Earlier on when this bill was around in its early stages I made a criticism of the Minister and I received one public response in support of him—one public response that supported his stand. 
There is a need to tidy up the legislation. I think we all accept that. But this bill does not do that. The amendments I am proposing will actually make an unworkable piece of legislation workable. If the Minister was serious in his intent he would adopt them but I bet that he will not. 
KATE WILKINSON (National) 
: 
 I put on the record that National will be supporting the amendments of Mr Dunne because they are sensible. We want good consumer protection legislation but this is not it. I rise to take a call in relation to Part 2 which relates to the Real Estate Agents Authority but I would like to just mention a couple of things that the Minister in the chair the Hon Clayton Cosgrove has said. First of all he said I did not like the appointment of Murray Giera on the board. The Minister might like to recollect that actually I was approached by the Christchurch real estate agents wondering what the delay was in making the ministerial appointment on the board in the first place. It was not until my office contacted the Minister’s office that that board appointment was actually made. So I think it is a little trite of the Minister to suggest that I did not like it. 
Then he challenged the National members to come up with one case—just one case. Well I will come up with two and if he cares to read them rather than just quoting some populist bylines he might know more about the industry and might learn more about the industry. Those cases were Sime and Lethbridge in 2002—both High Court cases. In both those cases the High Court noted that the alleged misconduct was insufficiently serious to meet the high statutory criteria for suspension and cancellation and would have been more properly dealt with by the regional disciplinary committee if it had been operating. 
One can ask why we do not have a regional disciplinary committee. The reason is that the Government did not appoint one. It was its responsibility but it did not appoint one. In fact I see that it has not appointed one for 10 years. So the delay that has been referred to by the Minister is a delay of his own making and not a delay by the Real Estate Institute. 
The answer was “because they had other priorities”. In fact 4 years ago—even then 4 years ago—Dr Worth asked the question: “Is it correct that there is a review of the Real Estate Agents Act 1976 in progress and if so what is the status of that review?”. That was 4 years ago. The response was: “The review was suspended at the start of the 2004/2005 financial year due to other legislative and policy priorities.” So any question of delay is certainly not due to the Real Estate Institute of New Zealand. It is due to the Minister’s own department. 
In fact we talk about the fees fines and small quantum of fines that are provided for under the old Real Estate Agents Act. I will come to that issue later but I have corroboration that there were 4 approaches—officially—in the last 10 years when the respective Minister responsible had been approached to increase those fines. So any suggestion of delays on behalf of the Real Estate Institute is frankly quite fatuous. 
Turning to the Real Estate Agents Authority that is to be established as a Crown entity under Part 2 of the Real Estate Agents Bill I say that we support measures to have good consumer protection legislation. But this is not it. As Mr Dunne has rightly said if the Minister in the chair had bothered to set up regional disciplinary committees and had bothered to increase the fines we would have had some workable legislation but instead he has taken a huge sledgehammer to what is just a nut. 
The authority’s functions are set out in clause 16 and it is really rather interesting because throughout the bill it talks about a registrar. This shows the incompetence of the Minister in the chair to be honest because throughout the bill it talks about the registrar but it had no provision whatsoever as to who that registrar was and how that registrar was to be appointed. That had to be amended at the Justice and Electorate Committee. 
I would like the Minister in the chair to seek the call. He did not seek the call in relation to my queries on Part 1 as to what exactly real estate agency work was what the definition of residential property was—whether it did or did not include lifestyle properties—and what the definition of transaction was so I would imagine that he will not seek a call on this question either which is in relation to the membership of the authority. As has already been pointed out by my colleague the Hon David Carter the authority is to have a membership of no more than seven members. Members will recall that in the original draft of the bill there was going to be no industry representation on this authority whatsoever. Nobody with any knowledge whatsoever of the real estate business was going to be a member of this authority and when we think of what the authority’s function will be which is to administer the whole regime for the agents we see it as totally negligent to have even thought about having an authority appointed by the Minister with no industry representation. Admittedly there now is industry representation and the Minister must appoint at least two members who are licensees or former licensees. So at least now there will be some industry representation on that authority. 
I would like to ask the Minister what he means in his Supplementary Order Paper when he is amending clause 17 to say that the Minister must consult with the Real Estate Institute when making the first appointment of licensees or former licensees. Why just the first appointment? I would like the Minister in the chair to answer that. Why just the first one? Surely the consultation should also apply to the second appointment and the third and subsequent ones. Why just the first appointment? That question may be too difficult for the Minister in the chair but we still hope that perhaps he will take this matter seriously. 
The other issue I would like to raise is in relation to the practice rules. Clause 20 in Part 2 states: “Practice rules are made by the Authority with the approval of the Minister . . . ”. If it is anything like the code of ethics and conduct under the Lawyers and Conveyancers Act I suspect there will be considerable delays in the Minister approving even those. Under the Lawyers and Conveyancers Act it took over 6 months for the code to come off the Minister’s desk with some sort of approval. If that is the sort of expeditious treatment that this Minister will seriously give the real estate industry then I suggest that perhaps he should take another look at it. 
Clause 24 also relates to the prescription of fees that the authority can impose. There are fees payable from time to time. There is then an operational levy to fund the costs of the authority and a disciplinary levy. That is three different types of fees. The question that has to be asked is what sort of quantum of levy and fee the Minister envisages because with the bureaucracy he has built into this real estate agent regime which is similar to what he built into the housing and building regime we might expect a somewhat hefty operational levy disciplinary levy and fee. As we know those fees will be handed down and passed on to the consumer. At the end of the day it will be the consumer not the industry who will be paying for this legislation. If this bill is being enacted for the protection of the consumer—to give the consumer confidence in the real estate industry to promote public confidence in the performance of real estate work and to protect the interests of consumers—then it seems to me that one of the striking things this legislation will do is increase the costs to that consumer. I wonder whether it is the consumer the Minister has in mind or whether it is just more political posturing. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 As somebody who has had considerable experience of working with the legislation and the real estate industry over a long period of time I thought the Committee and the public should be alerted to the kind of debate that is taking place today on Part 2 of the Real Estate Agents Bill. I am hearing from the National Party that everything is fine out there and nothing needs to be done. But I cannot find anybody in the real estate industry with any experience who says that. I cannot find anybody who says everything is fine and nothing needs to be done but I have just heard a procession of National Party members illustrate the fact that they understand nothing about business in New Zealand and claim that everything is fine and above board right now. They cannot point to anybody associated with the industry who would argue that nothing needs to be done but nevertheless they say their idea is to do nothing which is their policy on everything really. 
Hon Clayton Cosgrove 
: Carter said that. 
Rt Hon WINSTON PETERS 
: Mr Carter said that; Kate Wilkinson said that. She did not get to talk about KiwiSaver but I want to know whether she had a clearance from John Key to say what she did say. 
Let us be honest. Here we have a circumstance— 
Hon David Carter 
: Where did the cheque go? 
Rt Hon WINSTON PETERS 
: I will tell the member what the cheque did not do and that is dodge GST. That is a criminal offence and the GST has still not been paid. That is what the cheque did not do. But to come back to the point here— 
Hon David Carter 
: Just pay up. 
Rt Hon WINSTON PETERS 
: My argument to the member is to look in the mirror and just pay the GST or else to keep quiet. How Mr Carter has made the front bench is a matter of bewilderment to all his colleagues. It must be because of something else like patronage of the party. 
Members are concerned about who will make up the seven people on the so-called authority. Who suggested that there should be people from the real estate industry with substantial and requisite experience on the authority? It was New Zealand First that argued for that; I am sure the Minister will not argue against that. That is what we did. We sought the opinion of the industry and tried to get some balance put into legislation that seeks to protect the consumer. 
After all it was Adam Smith who said that men of business seldom meet for food or entertainment without their conversation soon turning to a conspiracy against the public. And that in the case of this industry has happened far too many times. Oh I know why Gerry Brownlee is shaking his head. That is all he knows. 
Gerry Brownlee 
: Where’s the fidelity fund? 
Rt Hon WINSTON PETERS 
: Where’s the fidelity fund? 
Gerry Brownlee 
: Yeah—not there. 
Rt Hon WINSTON PETERS 
: Well here we go; is this not wonderful? The member shouts out that. He is meant to be the spokesperson from National on this bill but he does not know what its provisions are—or are not—and now he is asking me about them. That is typical of Gerry. 
The CHAIRPERSON (H V Ross Robertson) 
: The member should keep to the debate. This is a narrow debate. 
Rt Hon WINSTON PETERS 
: One has to wonder how someone like that could get promoted so far up the ranks in what used to be a great party when he acts like an absolute buffoon knows nothing about the law or legislation and thinks noise means volume. Well I tell Mr Brownlee that it does not mean that. Substance in the end is what matters around here not just a bombastic display of Billy Bunter-ism. It will not work any more and that is a fact. 
I come back to the point which is— 
Gerry Brownlee 
: Tell us about the fidelity fund. Who gets the fidelity fund? It’s not in there. 
Rt Hon WINSTON PETERS 
: I am talking about the membership of the board. Does the member mind if I just get through that first? 
It is rather critical that we have people who when they come to a tribunal situation understand the requirements of the industry and I tell Mr Brownlee it is important that those people are not biased are not prejudiced and have not made up their minds before they hear a case. It is important that they are prepared to wait until all the facts before them are heard before they make up their minds. As Mr Finlayson will tell members that is how good tribunal people show responsibility rather than acting like those with so much arrogance—a quality I have seen Mr Brownlee display—that they make up their minds before they hear any of the evidence. We do not want that sort of person to be on the Real Estate Agents Authority. 
The authority should have people on it who are neutral independent but experienced enough to ask on behalf of the consumer and on behalf of the real estate person against whom the complaint has been lodged what the facts are and where the truth possibly lies—but who first of all ask to hear all the facts all the provisions that relate to the case. That is rather important because it is no use to have an authority if we put people on it who walk in and before the case is half heard rush out go to the media and start to say something else. 
Christopher Finlayson 
: I raise a point of order Mr Chairperson. I am sorry to interrupt the right honourable member but he is concentrating on Part 4. He is talking about the bodies that will adjudicate on complaints. There are two types of committees: there is the complaints assessment committee and the actual disciplinary tribunal. The authority appoints those bodies which then adjudicate. So the member really has to come back to Part 2. It would be quite a novelty to hear him say something about Part 2. 
The CHAIRPERSON (H V Ross Robertson) 
: Thank you Mr Finlayson. Actually the member’s time is just about up. 
Rt Hon WINSTON PETERS 
: I have just heard Mr Finlayson “QC (Failed)” with his argument. It is not correct of course because all of the other authorities arise from the Real Estate Agents Authority. 
COLIN KING (National—Kaikoura) 
: 
 I will take up a couple of issues in Part 2 of the Real Estate Agents Bill. 
The first is subclause (3) of clause 16 “Authority’s functions”. It talks about the industry training organisation and raises the spectre in my mind that we will have two very strong competing bodies. I would like the Minister to explain to me what the relationship will be like between the Real Estate Authority and the industry training organisation. Clause 16(1) runs through the various functions of the authority. It will set up a register to register licensees: “(b) ensure that the register of licensees is established kept and maintained;”. It will develop rules it will develop consumer information and it will “(f) develop and provide consumer information on matters relating to the provision of real estate services including providing the public with information on how to make a complaint;”. There is a list of provisions. 
I come to a provision pertaining to the amendments on the Supplementary Order Paper of the Hon Peter Dunne which National will be supporting. Subclause (3) states: “For the avoidance of doubt nothing in subsection (1) affects the role of an industry training organisation for the time being recognised under the Industry Training Act 1992 as an industry training organisation for the real estate industry.” That is the first point on which I want some clarification. Is there an intention to move the industry training organisation to the Real Estate Agents Authority? If we read that provision carefully we see that it states “the role of an industry training organisation for the time being …”. I would like the Minister to clarify what he intends there. 
Secondly I would like the Minister to tell me whether he heard any complaints from the Real Estate Institute of New Zealand about recognition of qualifications obtained in Australia. When I visited the institute in Auckland I heard a lot about the inequity in terms of the qualification that agents require to be registered in Australia. Effectively what was happening was that a lot of people would go from New Zealand across to Australia for a course of about a week and when they came back they would be recognised as fully fledged qualified real estate agents. The second question I would like the Minister to address is whether while he was developing this bill he took that matter into consideration or was it in actual fact outside the scope of the bill? 
When we turn to clause 19 and read of the continuing education function of the authority we can understand the confusion and concern that exist among the industry training organisation. Clause 19 “Continuing education” states: “The Authority may by notice in the  
Gazette 
 make practice rules …” and it talks about continuing education. That is professional development and it will require qualifications to be designed and signed off. There will be tremendous friction within the industry unless action is taken immediately to make sure there is seamlessness between the authority and the industry training organisation. Qualifications will have to be developed and the authority is being empowered to do that but I do not see any ability to bridge that issue. 
We go on to clause 21 “Criteria in relation to approval of practice rules by Minister”. The provision talks about the authority’s relationship with the Minister. It talks about principles and I say to the Minister that paragraph (c) talks about “the consistency of the rules with New Zealand’s international obligations:”. I know that it might be drawing a long bow but I would like to think that serious consideration was given to the need for equal qualifications between Australia and New Zealand. 
CHRISTOPHER FINLAYSON (National) 
: 
 I want to ask the Minister a couple of questions about Part 2 several clauses of which as the Hon David Carter said will come into effect the day after the date on which the legislation receives the Royal assent. That particularly relates to the establishment of the authority to which members have been referring with the exception of the Rt Hon Winston Peters who was really addressing the organisations in Part 4. 
I want to make one point immediately and that is that the Supplementary Order Paper of Mr Dunne raises a very sensible point which I believe the Committee should adopt. It involves an insertion into clause 17 of subclause (3B) which I will come to in a minute. Once the authority is set up clause 16 provides that one of its functions will be to set professional standards for agents and the Committee inserted a subclause (3) into clause 16 that made it clear that the industry training organisation currently in existence would continue to have a role. That is a very important point because when we come over to clause 19 there is a new provision that deals with continuing education. And I suggest to the Committee that that is a very good suggestion because all industries and professions should have mandatory continuing education. 
This is where clause 17 is so important. If there is to be mandatory continuing education then it makes sense that the industry training organisations which are charged with the training required before one can enter the real estate industry should continue to have a role in the area of continuing education. That is why it is important for the Minister to have a duty to consult with the industry training organisations when making the first appointment of licensees or former licensees. The proposal of Mr Dunne makes a lot of sense about the industry training organisations. 
The second point follows on from what Mr Carter said. Immediately after this legislation comes into force the authority will be established. It is to consist of no more than seven members. It will immediately have a role to undertake and given that this legislation could receive the Royal assent very quickly if it is passed I think we are entitled to know the sorts of persons the Minister is proposing to appoint and whether there will be consultation. Are we going to have a repeat of what has been going on with the conservation board the New Zealand Symphony Orchestra Creative New Zealand Te Waka Toi and the Human Rights Commission? All sorts of appointments are being made without any reference to the National Party whatsoever. Will we see Ann Hartley Mike Williams Eamon Daly Georgina Beyer—well probably not Georgina Beyer because she has outlived her usefulness to the Labour Party and it has not done anything for her—or Gary Moore the former Mayor of Christchurch in this position? Are these the sorts of people who will be appointed to this authority? I think we are entitled to know and we are also entitled to know whether there will be consultation. 
The next issue I want to touch on is that of fees and levies. It was addressed in a preliminary way by Ms Wilkinson because as she said clauses 24 25 and 26 deal with certain types of fees and levies and the Real Estate Agents Authority will be in a position to prescribe fees. As we have said all along the National Party has concerns about the bureaucratic nature of what is being set up under this legislation and we are concerned that fees and levies could be enormous especially in the preliminary stages as the authority the complaints assessment committees and the disciplinary tribunal are set up. I would like to have some kind of indication as to whether the Minister has received any general advice on the sort of levy or fee that would be payable because one can rest assured that those fees ultimately will end up being borne by the consumer. Indeed one of the issues that was raised which was the subject of a submission to the select committee was that of consultation over fees and levels of fees. What sorts of levels does the Minister think are acceptable? Should there be consultation? 
JACQUI DEAN (National—Otago) 
: 
 In rising to address Part 2 I say that it is a bit of a concern for National that there are some glaring omissions within legislation that is meant to provide good consumer protection. The exclusion of property managers from the regime is a matter of some concern because it creates inequities within this bill. I would like an explanation from the Minister in the chair the Hon Clayton Cosgrove as to why that is the case if this is such a good piece of consumer protection from the cowboys and the land sharks—so-called by the Minister on a number of occasions. It is interesting. In my travels throughout New Zealand I frequently pop in and out of real estate agents’ offices and they say things about the Minister that are never very complimentary. They ask me about that man— 
Hon Member 
: The angry man. 
JACQUI DEAN 
: —the angry man—who will lose his seat at the next election and why is he going to lose it— 
Hon David Carter 
: Which one? 
JACQUI DEAN 
: Clayton Cosgrove. I will restrict my comments to the Minister in question Clayton Cosgrove. He is the man who is hated by every real estate agent I come across—probably every real estate agent in the land. Why do they hate him? Who wants to be called a land shark? Who wants to be called a cowboy by a Minister of the Crown? And what does this Minister do to fix these land sharks and cowboys? He brings forward to the House the Real Estate Agents Bill. The trouble with the bill is that it has some glaring omissions. It does not even address the issue of property managers. 
I did not sit in on the submissions but I understand that a number of very strong submissions were made to the select committee about the inequities in not making provision for property managers within this bill. Those of us who have children going out into the world and becoming tenants in properties or flatting if they are students or going into the workforce know that they are the very vulnerable young people who have to come into contact with property managers. It seems to me to be a glaring omission on the part of this Government which touts itself as the champion of consumer protection to turn a blind eye to those very people within this Real Estate Agents Bill. 
This bill is not worth much if it does not address the real issues being faced particularly by young people who have to deal with property managers. The submitters to this bill did not consider that the provisions for property management in the Residential Tenancies Act 1986—which of course relate primarily to relationships between parties as tenants owners and property managers—are sufficient to ensure that consumers are protected in property management transactions. So what does the Minister propose to do about it? He proposes to conduct a review. Well that does not provide much comfort to those people who deal on a day-to-day basis with property managers. National’s view is that this bill should include property managers within it and without doing that the Minister’s fine words about cowboys and land sharks remain very pertinent. 
The Hon Peter Dunne really hit the nail on the head when he said the Minister was indulging in petty abuse. That is what he has been doing and that is what he has been doing out in the electorates all around New Zealand. Well I say to the Minister that the real estate agents have heard him they have made up their minds about him and they have no faith in this bill that the Government is putting forward. There are glaring omissions in the bill and just one of those is the exclusion of property managers. This is not a good consumer protection bill. National supports good consumer protection legislation but this is not it. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Motion agreed to. 
The question was put that the following amendment in the name of the Hon Peter Dunne to clause 16 be agreed to: 
to omit from subclause (3) “subsection (1)” and substitute “this Act”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Noes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Peter Dunne to clause 19 be agreed to: 
to omit paragraph (c) and substitute the following paragraph: 
(c)The Authority must consult with the industry training organisation for the real estate industry. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Noes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 243 in the name of the Hon Clayton Cosgrove 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 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Part 2 as amended agreed to. 
Part 3 Licensing 
Hon DAVID CARTER (National) 
: 
 As we move to Part 3 “Licensing” we come to the very nuts and bolts of this legislation. This is the part where we are talking about how one becomes licensed how a licence is suspended how a licence is cancelled how a licence is renewed etc. We come to the very essence of this legislation as it impacts on the real players within the industry and I am talking about the real estate agents themselves. 
I want the Committee to note that we now have a fresh Minister in the chair the Hon Shane Jones and to note also that some valuable questions raised in the previous discussion remain unanswered because Mr Cosgrove who was then the Minister in the chair decided not to answer the legitimate questions put by members of the National Party. In referring to clause 16 I notice that when we are talking about the nuts and bolts of the licensing as in Part 3 this is a significant function of the authority. Therefore I say it is important that we are absolutely assured today by the Minister in the chair that consideration has been given to who the members of the authority are. It is my understanding that following the conclusion of the Committee stage of the debate we will move to the third reading later on today. If that is the case then this legislation will have the Royal assent in the early part of next week—say on Monday or Tuesday depending on how busy our very distinguished Governor-General is. On that basis the Minister has to have revealed on the day after that who the members of the authority are because those members will then have responsibility for administering the licensing regime of Part 3 which affects every person participating as a real estate agent within this industry and affects people who want to enter the industry. 
I think that the least the Minister in the chair the Hon Shane Jones could do is to rise to his feet and assure the members of this Committee that due consideration has been given to the appointment of members to the authority. Furthermore he should assure members—and maybe this has happened with my colleague Simon Power with regard to the normal conventions that have applied in this House for a long long period of time; decades in fact—that there has been a reasonable consensus between and consultation with other political parties as to the membership of this authority. If as we are discussing in Part 3 we are to end up with a licensing regime administered by an authority that has not been appointed in a fair and open manner then this legislation will not be enduring. For example it might be an authority that could be stacked with Labour Party lackeys. I note that it is now 32 years since we last had reforming legislation involving the real estate industry and I do not want to see this legislation coming back because it was rammed through without a fair and consensual discussion in Parliament on the membership of that authority. 
I hope that Shane Jones will be more cooperative than the bullying arrogant Minister whom we had earlier the Hon Clayton Cosgrove but I think that this Committee has every right to know whether those appointments have been considered whether they have been approved by a Cabinet process and if so I ask why the Minister cannot simply tell us who they are today. Unless that authority has the confidence of this Parliament and more important has the confidence of the industry this legislation and the licensing regime we are now debating in Part 3 will not be enduring and I think it would be a shame for this House if that is the process the Minister Shane Jones is prepared to endorse in Parliament this afternoon. 
CHRISTOPHER FINLAYSON (National) 
: 
 I will deal with several aspects of Part 3 “Licensing”. I endorse the comments Mr David Carter has made because a key person in this licensing regime will be the registrar and in the part that we have just dealt with clause 31A provides that the authority is to appoint the registrar. So it is extremely important that the body that appoints the registrar is made up of competent people and that it is not a pay-off for simply leaving Parliament. 
But I come to Mr Dunne’s proposed amendments because I submit that they are very good indeed. He says that he would make three changes to clause 34 and they are designed to ensure that the authority will have broad and full criteria on which to make the decision on the granting and retaining of licences. Again this is intended to ensure that the consumer is properly protected. Clause 34(1) deals with the entitlement to a licence as an agent or a branch manager and an individual must satisfy the registrar that he or she meets the criteria set out in that subclause. 
One of those criteria is that the person is to be a fit and proper person to hold a licence. Mr Dunne is suggesting in the first of his proposed amendments that before the words “is a fit” we should insert the phrase “in the interests of the public”. I fail to see how there could be any objection to that proposal. It emphasises the fact that it must be consumer protection legislation. Ultimately it is in the interests of the public and to spell that out very carefully causes no harm whatsoever. 
The second proposal relates to clause 34(1)(e) which deals with the experience that the proposed agent or branch manager must have had before appointment. Mr Dunne’s suggestion is that instead of having 2 years’ experience within the 10 years preceding the application this person must have had during the preceding 5 years at least 3 years’ practical experience working full-time or working primarily and predominantly in real estate agency work. Again I suggest that as this is supposedly consumer protection legislation the Dunne formula is to be preferred. 
The third and final change is to clause 34(2) which provides that an individual may be licensed as a sales person if the individual satisfies the registrar of various matters. The critical one for current purposes is clause 34(2)(c) and again it is the fit and proper person test and Mr Dunne has suggested again the insertion of the phrase: “in the interests of the public”. I suggest to the Committee that these changes are sensible. They make the clause that much better and I certainly support them. 
The other point I wish to address concerns clause 50. This is another backdown by the Minister. There was extensive debate in the Justice and Electoral Committee about the desirability of this clause and whether the chief executive of the Ministry of Justice should report to the Minister as to whether clause 49 which deals with the employment status of a salesperson should continue to be appropriate. There was considerable debate. The Labour members were adamant that clause 50 should be retained but it is very interesting to observe that the Minister’s Supplementary Order Paper 243 proposes to omit this clause—another win for the National Party which had argued the clause was inappropriate and did not sit happily in consumer protection legislation and if it was to be retained it should be in employment legislation and the person doing the review should be the chief executive of the Department of Labour. So having adopted a stubborn approach to clause 50 and having had his minions argue the case strongly for the retention of clause 50 in the select committee the Minister has cut them off at the knee caps because clause 50 is to go. 
KATE WILKINSON (National) 
: 
 I rise to speak to Part 3 of the Real Estate Agents Bill and following on from my colleague Mr Finlayson I do urge the Committee to consider the proposals submitted by Mr Dunne with those very sensible and consumer protection-related amendments. I do urge the Chamber with some scepticism because when one has the Government of the day voting against a provision that says the authority must consult with the industry training organisation for the real estate industry one has to wonder whether they are trying to create and legislate good law or whether it is still just that political posturing. This is a so-called listening Government but it does not listen to common sense. These amendments suggested by Mr Dunne as he rightly said are hardly subversive they are hardly radical and they actually do improve the consumer protection of this bill. 
Like my colleague Mr Finlayson I want to touch on a few clauses in Part 3. The first one is the entitlement to the licence which is in clause 34. It states that “An individual may be licensed as an agent or a branch manager if … the individual (a) has attained the age of 18 years; and (b) is not prohibited from holding a licence … ; and (c) is a fit and proper person to hold a licence; and (d) has the prescribed qualifications; and (e) has obtained 2 years’ experience in real estate agency work within the 10 years preceding the application to be licensed … ” . 
I am aware that the Minister has an amendment in Supplementary Order Paper 243 that will increase that experience to 3 years in the 10 years preceding the application. Mr Dunne’s amendment will tighten that and add more protection for the consumer by specifying the experience as 3 years’ experience in real estate agency work within the 5 years preceding the application. That is much better for the consumer and if this Government really were a listening Government then it would certainly vote in favour of the amendment proposed by Mr Dunne. 
It was raised during the select committee process whether 18 years of age was actually old enough for a person to be buying and selling on behalf of another person his or her most valuable asset—a home. Often it is the most important significant purchase that any family in New Zealand makes and I wonder whether a person who is 18 years of age is sufficiently old or sufficiently experienced to do that. I think that when we talk about ages there are so many different age limits littered throughout our legislation but when one has the very same Minister who on the one hand says that a person of 18 years of age is not old enough to buy a beer—because he voted against that in the sale of liquor legislation—but that an 18-year-old is old enough to buy and sell someone’s most prized possession a house then one has to wonder about the consistency of that Minister’s judgment. 
The other clause I really want to mention in relation to Part 3 is clause 48. Clause 48(1) states: “A salesperson must in carrying out any agency work be properly supervised and managed by an agent or a branch manager.” It then specifies: “In this section properly supervised and managed means that the agency work is carried out under such direction and control of either a branch manager or an agent as is sufficient to ensure—(a) that the work is performed competently; and (b) that the work complies with the requirements of this Act.” 
On first reading that might seem quite sensible but if one goes back to the original Real Estate Agents Act section 54(2) contains the phrase “effective control”. The wording of that is: “Every branch office of a real estate agent … shall be under the effective control of a person approved by the Board”. So we have changed the terminology from “effective control” to “properly supervised and managed”. The difficulty with changing phraseology and terminology in legislation is that one has to build up a whole new supply of cases to actually explain and verify what that means. Considerable case law already exists as to what “effective control” is. We have now changed that to “properly supervised and managed” and my concern is that this will lead to uncertainty and now a new load of case law which will try to interpret Parliament’s intentions. It will also try to distinguish the difference between “effective control” and “properly supervised and managed” and will try to work out what the intention of Parliament was in relation to this new definition. 
We have to ask ourselves whether this actually adds anything to the consumer protection nature or element of this legislation that could not have been satisfied by using the tried and true terminology of “effective control”. I would like the Minister to take a call on that because I think that is very important and that we have a duty as legislators not to be reckless when we are making law and to me it is certainly not contentious but it is going towards better law-making. I would like the Minister to give us his views of that change in terminology. 
The other clause that I will briefly mention is clause 50 which has been deleted by the Minister’s Supplementary Order Paper 243. National will certainly be voting in favour of that one. It concerns the 5-yearly review of the employment status of salespersons. Having that 5-yearly review hanging over the heads of salespersons was just too untenable and uncertain and really did not add much to the debate. There is no reason whatsoever why salespeople cannot make the choice to be employed on an employment basis or on an independent contract basis—a contract of service as opposed to a contract for service—and accordingly that review has now been deleted from the bill by virtue of the Minister’s Supplementary Order Paper and we certainly approve of that. 
Another concern however in relation to the employment status of salespersons is whether changing the terminology to “properly supervised and managed” as opposed to “effective control” implies changes to the employment status of salespersons so that they may in fact be deemed to be employed rather than self-employed. I am concerned that there might be a plethora of cases that would try to interpret the difference in that terminology and that will lead to uncertainty within the real estate industry as to whether these salespeople are employed or are indeed self-employed. I think it is important that the Minister does address this issue because I think that is the responsible thing for him to do. It is one of the important clauses in Part 3 that we have highlighted and I really would appreciate the Minister taking a call. No calls for the Minister to answer any questions have so far been taken seriously whether in relation to the definition of “transaction” the definition of “residential property” or the definition of “real estate agency work”. Now I am asking the Minister to take a call to explain the definition of “properly supervised and managed”. I would appreciate the Minister’s advice or his getting advice from officials as to the ramifications of that change of definition. 
COLIN KING (National—Kaikoura) 
: 
 I am addressing Part 3 and I would like to pick up on a theme I was discussing in relation to Part 2. Part 3 “Licensing” deals with how to become licensed and again we see that it is done by the registrar as appointed by the authority. I see a very strong similarity here to the potential relationship that existed between the Plumbers Gasfitters and Drainlayers Board and the industry training organisation. When we look at the terms and reasons in respect of a person becoming licensed we find that it goes beyond a lot of what has been normal and into areas where the authority has the ability to cancel licences as one would justifiably understand it could. But when we actually look at it we see clause 53 states that the registrar must cancel a person’s licence and remove that person’s name from the register for various reasons and paragraph (c) states: “if the person has failed to maintain the prescribed qualifications;”. 
That in itself may not mean a heck of a lot but when we look at the relationship that can exist between an authority and an industry training organisation we find that there can be quite a conflict of relationships as was the case as I said earlier between the Plumbers Gasfitters and Drainlayers Board and the plumbers and gasfitters industry training organisation. That was borne out in Hazel Armstrong’s report which stated that there were strong personalities and in that case they were between the registrar and the chief executive officer of the industry training organisation; it just did not work. 
The question I raise is whether a shelf life is now being put on to the real estate agent qualification. It is understood that after 3 to 5 years real estate agents will need to resit to keep those qualifications whereas in the past there was an understanding that once people gained those qualifications they did what was reasonable around the variations of the industry at the time and as long as they were not bankrupt or were not facing criminal charges they were able to keep their licences. The basis on which that qualification kept rolling on was to do with recognising prior learning and current competencies. 
When I look at Part 3 I see that there will need to be continual conversation between the authority especially the registrar and the industry training organisation with regard to the construction of those qualifications. It could get quite personal and it could get very bitter especially if the relationship breaks down and in the end the Minister would have to step in as Dr Cullen did with the Plumbers Gasfitters and Drainlayers Board and sack them. That in itself creates its own reverberations around the industry and it does not do anything to instil confidence. We can see that there is a lot of good within the proposed framework. 
Again I come back to the other point. Are there conversations with Australia and developments along Australian lines so that we are developing similar standards so that these standards are compatible with New Zealand and so that we do not allow a standards issue to develop within the qualifications and start a division that could set the licensing authority up against the industry training organisation? That is the one point I think we really need to be very mindful of. 
The second point of course concerns the definition of a salesperson and how he or she must be supervised. That in itself I think opens a can of worms around litigation and confusion as will the aspect of the independent contractor versus “services of” and “services for”. The Minister has wisely taken the step to take away clause 50 and we certainly see that as being a positive move. 
JACQUI DEAN (National—Otago) 
: 
 The real estate industry is already reeling from the description of it given by Minister Clayton Cosgrove. He described real estate agents as land sharks and cowboys. The real estate industry knows that it does not have the confidence of the Minister because he has told it so. The real estate industry has a view of the Minister because of that position and the grandstanding of that Minister on real estate agents and their profession. Now the Minister brings to the House a bill called the Real Estate Agents Bill which we oppose. The bill intends to provide good consumer protection but it contains some glaring omissions. I raised one omission during the debate on Part 2 and that was the exclusion of property managers from the regime which of course creates inequalities. Minister Cosgrove’s response to that was I suppose typical of him. He indicated that he would conduct a review. When? We do not know. How? We do not know. Who will be conducting that review? We do not know. 
That brings me to another part of Part 3. Part 3 is to do with licensing and how to become licensed. There are a number of clauses dealing with how to become licensed the provisions relating to licences the effect of licences the status of licensees and the renewal cancellation suspension and surrender of licences and so on. The person who considers the granting of licences to become a real estate agent is of course the registrar. The person who appoints the registrar who grants licences is somebody who has been appointed by the Minister. Given the recent occurrences against all the conventions of this Parliament in the appointment to boards— 
The CHAIRPERSON (Hon Marian Hobbs) 
: I just wonder whether I can stop this. I have been upstairs and I have been in this Chamber and that issue really was addressed in Part 1. We are here talking about licensing. You are trying—as did the first speaker on this part—to link it back to two steps back. I think that is really pushing the definition of what is talked about in Part 3. Thank you. 
JACQUI DEAN 
: I think it is important to the real estate agent who is coming under the regime of becoming licensed that he or she has confidence in the person or body that is granting that licence. That is why I raised that issue in the context of the debate on Part 3. We are talking about people’s livelihoods here. We are talking in the debate on Part 3 of this bill which concerns licensing about people’s professions. There are real estate agents in New Zealand who take the profession of real estate agent for a number of years of their working lives. There are real estate agents who are in the job in the long term for maybe 20 years. They enjoy the role and they are good at the profession. 
Hon TAU HENARE (National) 
: 
 I want to have a look at clauses 43 44 and 45 in Part 3. Clause 43 “Duty to produce evidence of issue of licence” states: “A licensee must if asked by any person produce for inspection by that person either—(a) the evidence of the issue of a licence sent to that person under section 41; or (b) a copy of that evidence.” 
Does that mean if I am employed by Barfoot and Thompson and I am walking down the road somebody can ask to see my licence? Is that what it means? I wonder whether the Minister could turn his mind to maybe answering that question. It seems to me that it is a bit like the regime they had in South Africa where one could be walking down the road and somebody would ask in a South African accent—which I will not even try to do—to see one’s pass to see one’s licence to be there. That is what this clause means. That is exactly what it means. 
Charles Chauvel 
: Good point! 
Hon TAU HENARE 
: Mr Chauvel says that it is a good point then shakes his head. It is no wonder these guys are on their way out. 
The CHAIRPERSON (Hon Marian Hobbs) 
: We are debating Part 3. 
Hon TAU HENARE 
: I am just responding to an interjection from the other side of the Chamber. I was on track. [ 
Interruption 
] 
The CHAIRPERSON (Hon Marian Hobbs) 
: We were going along very quietly. On we go. 
Hon TAU HENARE 
: Thank you Madam Chair for bringing the Government members back to order. Fancy having to produce one’s licence! We have licences for driving cars which the police have the power to look at any time day or night when one is in a car or whatever. But fancy anybody from Joe Public upwards downwards and sideways having the ability to stop a person and ask where his or her real estate licence is. That is what clause 43 does. That is exactly what clause 43 does. 
The term of the licence continues in force for a period of 12 months. Well what happens if somebody is late in getting relicensed? I have looked through Part 3 and it has no reference to somebody who is late in getting relicensed. The bill talks about the cancellation of a licence the renewal of a licence and the expiry of a licence but nowhere does it tell us what happens when somebody unfortunately misses the renewal date. We have all been guilty now and then of missing the date on which we have to get some paperwork in. I wonder whether the Minister can turn his head to that issue. 
The interesting clause in Part 3 is clause 45 “Licence may not be transferred”. How stupid is that? Of course it cannot be transferred. Can we transfer our own driver’s licence? No. Can we transfer any other sort of licence? I tell members that it is actually easier to get a gun licence than it is to get a real estate agent’s licence. There will not be a real estate agent left in this country if the Government has its way. But here is the doozy: clause 51 “Renewal of licence”. I commented briefly yesterday about the same issue. Subclause (1) states: “An application for renewal of a licence must before the date on which the licence expires—(a) be made to the Registrar in the prescribed form; and”—here is the little doozy—“(b) be accompanied by the prescribed fee (if any).” Why is it that for the last 9 years this Government has been intent on putting the word “fee” behind everything it does? 
CHARLES CHAUVEL (Labour) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Motion agreed to. 
The question was put that the following amendment in the name of the Hon Peter Dunne to clause 34 be agreed to: 
to insert in paragraph (c) of subclause (1) “in the interests of the public” before “is a fit”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 52 
New Zealand National 47; ACT New Zealand 2; United Future 2; Independent: Copeland. 
Noes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 243 in the name of the Hon Clayton Cosgrove to clause 34 be agreed to. 
Amendment agreed to. 
The CHAIRPERSON (Hon Marian Hobbs) 
: Peter Dunne’s amendment to clause 34(1)(e) is ruled out of order as it is now inconsistent with a previous decision. 
The question was put that the following amendment in the name of the Hon Peter Dunne to clause 34 be agreed to: 
to insert in paragraph (c) of subclause (2) “in the interests of the public” before “is a fit”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Noes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Peter Dunne be agreed to: 
to insert the following new clause: 
34AThe Industry Training Organisation for the real estate industry shall prescribe the qualifications necessary before a person is entitled to be licensed as an agent branch manager or salesperson. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Noes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Amendment not agreed to. 
The question was put that the remaining amendments set out on Supplementary Order Paper 243 in the name of the Hon Clayton Cosgrove 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 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Part 3 as amended agreed to. 
Part 4 Complaints and discipline 
The CHAIRPERSON (Hon Marian Hobbs) 
: The debate includes schedule 1. 
CHRISTOPHER FINLAYSON (National) 
: 
 Part 4 is almost the heart of the legislation because the Minister’s yelling and screaming before the bill was introduced indicated he was concerned that there was an inadequate complaints procedure under the 1976 Act. We agree that it was timely to look at the complaints and discipline procedure because any system that regulates a profession or an industry group needs to be effective so that disputes can be resolved justly quickly and inexpensively. 
The problem from the National Party’s point of view is that Part 4 will not achieve that purpose. Rather it will cause added expense. Also what has been constructed is not really suitable for the particular circumstances. That is why we put in our minority view that we were very concerned about the bureaucracy created by this bill. We have mentioned the authority on the way through but we say here that an unnecessary bureaucracy is created. 
Let us take a look at the way this part is constructed. There are two types of conduct that can lead to complaints. The first type is unsatisfactory conduct which is of the lesser standard and the second type is misconduct. We have no complaint with that division of labour as it were. If one looks at the Lawyers and Conveyancers Act one sees there is a very similar distinction to be made. Instances of unsatisfactory conduct are referred to complaints assessment committees and as the Committee can see a number of changes have been made to the way in which the complaints assessment committees are set up. The existing clause 74 is proposed to be deleted and there is a new clause 74 and a clause 74A. 
There will be a complaints assessment committee that will deal with complaints and allegations about licensees. There will also be a panel. The reason for that is we received evidence about the number of complaints made and it became tolerably clear at an early stage that simply to have three members of the board as members of a complaints assessment committee would not work. This is where we say that this is too complex because this bill does not adequately address what to do with the myriad of vexatious complaints that come in. These are the sorts of complaints that should be able to be dealt with very quickly or what may start off as a complaint may be able to be resolved very quickly if the agent and the client have a quick discussion. There may have been a misunderstanding or whatever. But in the way it is constructed it almost encourages a culture of complaint and we do not think this is proportionate to the needs of the consumers. If there could be a provision that provided for in the first instance people being able to talk to their agent if they thought fit we think that would be a much better system. Sometimes of course the relationship between the client and the agent is so bad that one immediately goes to this complaints procedure and that is understood and accepted. 
That is the first aspect of the complaints procedure. I do not think it is a bad idea to have something like clause 84 in the bill. It deals with modes of resolution of disputes and it has been picked up from the Lawyers and Conveyancers Act. It will be possible to resolve matters by negotiation conciliation and mediation. I certainly hope this clause will be invoked if the legislation is passed because that is a much better way of resolving a dispute between the client and the agent than simply going to this more formal complaints procedure. I note it is not compulsory. At some stage we will have to debate the desirability of having compulsory mediation because it is certainly the case in Australia in various tribunals and I think there is a lot to commend it in this country as well. 
The second tribunal I am not so worried about. This is the Real Estate Agents Disciplinary Tribunal set up under clause 97 and the following clauses. There will need to be a tribunal of this nature to deal with the serious complaints. These are complaints about misconduct. 
CHARLES CHAUVEL (Labour) 
: 
 I want to make a couple of brief comments on Part 4—in particular on the Real Estate Agents Disciplinary Tribunal. I would like to address two issues. 
One relates to the composition of the tribunal. The Minister’s Supplementary Order Paper 243 would add to clause 97 a requirement that there be consultation with the Real Estate Institute of New Zealand when making the first appointment of a licensee. That is a useful provision I think on reflection. It probably only restates the requirements of the Crown entities legislation which would apply in any event to the tribunal—that the Minister should appoint only properly qualified people to the tribunal. Clearly in order to determine who was properly qualified the Minister would have to go through some sort of consultation exercise and it is likely that one of the bodies with which he would consult would be the Real Estate Institute. I think it is a useful restatement in effect of an existing requirement on the Minister and it is to be welcomed. 
The other point that I want to make briefly is to deal with the suggestion that somehow the legislation allows insufficient time to set up the various bodies that are required under it. The analogy that has been drawn time and time again by ill-informed members of the Opposition is with the Lawyers and Conveyancers Bill. Well what members who cite that legislation clearly do not know or have not bothered to check is that about 50 or 60 sets of different regulations and rules were required to be promulgated under that legislation in order to bring it into force. It was a very different exercise from and of a very different order of magnitude to this legislation which has got a much simpler set of bodies that are required to function under it. The time allowed for those bodies to be brought into being is ample in my submission. 
Hon TAU HENARE (National) 
: 
 Well I suppose we could call Part 4 “When real estate agents go bad they go feral”. That is the meaning of the current title “Complaints and discipline”. 
It is interesting to look at clauses 71 and 72 which set out provisions to do with unsatisfactory conduct and misconduct. Who decides what is unsatisfactory? There is no list here. There is a wide view of what is unsatisfactory. It could be anything from spitting to whatever. But who decides that? Does the Minister decide that does the tribunal decide that or what? It is not pointed out here. I know that at school it was always the principal who decided what was unsatisfactory or the dean. But I am wondering— 
Charles Chauvel 
: You are wandering all over the place! 
Hon TAU HENARE 
: I am just wondering how long that member has got left in this House. 
Moana Mackey 
: Oh nice one stick around. 
Hon TAU HENARE 
: It should not be very long. Then I turn to an issue that my colleague—[ 
Interruption 
] Oh here we go. One puts a little bit of bait out there and bang they just love to get it— 
Charles Chauvel 
: It beats having to give a speech on the subject. 
Hon TAU HENARE 
: I cannot help that fact. 
The CHAIRPERSON (Hon Marian Hobbs) 
: Come back to the bill and could those people not provide the base. 
Hon TAU HENARE 
: Absolutely I will come back to the bill! Clause 97 talks about some sort of disciplinary tribunal. Well who is going to appoint those people? Oh it is the Minister. So who does the Minister appoint? His mates. 
Hon Member 
: It’s not the National Party. 
Hon TAU HENARE 
: Oh no. It is all about appointing mates. Who do members think will get appointed to the tribunal? Well for a start it will be all the members of the Labour Party who lose their seats in the next election because they will not have anything to do for the next 3 6 or 9 years—most probably 9. But never mind. 
Moana Mackey 
: That member did lose his seat. 
Hon TAU HENARE 
: There we go: out goes the bait and bang there they go again. Well at least I did work when I was out of Parliament not like some people in this House who relied on—but I will not go there. 
The fact of the matter is that we all know that there are bad eggs out there. We all know that there is the odd rogue element out there but boy I tell members that it is easier to get a gun licence and walk down Queen Street with an AK47 than it is to comply with the sort of stuff we see before us. For years and years we have had a system whereby real estate agents who go bad are turfed out run out by the industry itself. Part 4 like the other parts is nothing more than overkill nothing more than smacking a little nut with a huge sledgehammer. That is all it is. 
The disciplinary tribunal is all about Government members selecting their mates for their jobs. 
Moana Mackey 
: Their mates? 
Hon TAU HENARE 
: Their mates for their jobs and I tell that member who it will be. Lynne Pillay will be there because she will not win her seat and she is not high enough on the list to get back in. Paula Bennett will win her seat. That is what it is all about—protecting their mates and jobs for their mates. That is all it is. 
Lynne Pillay 
: National Party hopper! 
Hon TAU HENARE 
: Oh absolutely and absolutely proud of it and absolutely proud of the fact that I have come from small to big and from being not so good to being brilliant. That is all I have to say on Part 4 at the moment. 
The CHAIRPERSON (Hon Marian Hobbs) 
: I call Kate Wilkinson and my apologies to you Kate before. Sometimes your voice needs to come through the bulk of the person in front of you. But go on. 
Hon Tau Henare 
: I raise a point of order Madam Chairperson. When we get some asides we have the opportunity to ask for a withdrawal and apology. 
The CHAIRPERSON (Hon Marian Hobbs) 
: I withdraw about your bulk. It was a geographical feature. 
KATE WILKINSON (National) 
: 
 Thank you Madam Chairperson and it is an honour and a privilege to follow from the oratory of my colleague the Hon Tau Henare. I rise to speak to Part 4 of the Real Estate Agents Bill which relates to complaints and discipline. Really if one thinks about the Minister’s preambles about the so-called “carnage” in the industry and land sharks and cowboys then really this should be the most important part of this bill that we are debating in Committee this afternoon. I have to say that it is disappointing that the queries we have raised and the calls we have asked the Minister to take have been very serious sensible questions and the Minister in charge of this bill unfortunately has failed to answer any of them and doubtless will not be here to even listen to the discussion on the complaints and discipline provisions of this bill. 
I want to talk about the complaints assessment committees. Under the original bill as presented to the Justice and Electoral Committee there was to be one complaints assessment committee of three members. The complaints assessment committee was sort of replacing the regional disciplinary committees that were provided for under the 1976 Real Estate Agents Act. And I will just put on the record that section 101 of the 1976 Act basically stated: “a Regional Disciplinary Committee shall consist of— (a) a barrister or solicitor as its Chairperson: (b) Three members appointed by the Council from members of the Institute within the region for which the Committee is established: (c) One lay member (not being a real estate agent) appointed by the Minister.” Then it goes on to state: “Three members of a Regional Disciplinary Committee including its Chairperson shall constitute a quorum.” 
Now the difficulty that we have and I think some of the difficulties that have arisen with the complaints that have been made in this industry are because we do not have regional disciplinary committees approved by the Minister. I asked the Minister back in June last year who were the current lay members appointed by the Minister to each regional disciplinary committee—that is each disciplinary committee for the region. He said: “I am advised that there are currently no lay members appointed to the regional disciplinary committee pursuant to section 101.” The power of appointment resides in the Minister and for the last 10 years or so the Minister has totally failed to appoint lay members of the disciplinary committee and therefore have them properly constituted. It is no wonder there have been problems at that level in relation to the complaints. 
A Crown Solicitor’s letter addressed to the institute and dated December 2006 states: “The absence of the regional disciplinary committee has effectively left a significant lacuna in the disciplinary structure. Mid-range misconduct either had to be taken to the licensing board or the regional disciplinary subcommittee. In some cases the misconduct was deemed too serious to be dealt with by the regional disciplinary subcommittee but insufficiently serious to warrant an application for suspension or cancellation to the licensing board. This left the Real Estate Institute in a difficult and quite unsatisfactory position.” 
That “difficult and … unsatisfactory position” could easily have been fixed by the Minister merely appointing the lay members of the regional disciplinary committee pursuant to the powers contained in section 101 of the 1976 Act. We have to take with a grain of salt some of the criticism of the processes under the old Act which the Minister believes have failed. The failure is in some ways due mainly to the failure of the Minister to comply with the existing legislation. 
I really want to talk about the complaints assessment committee which is the lower level to where complaints are to be directed; it is the regional level. My colleague Mr Finlayson has already referred to the disciplinary tribunal which is for the higher level complaints. The complaints assessment committee is for the lower level of complaints. The original bill provided for one complaints assessment committee and that shows the Minister’s lack of knowledge and ignorance as to how the real estate industry operates. When we think about the nature of the complaints they are the smaller minor complaints. It might be complaints about a telephone call that was missed or not returned which meant that the person missed out on buying the property of his or her choice—it is those sorts of complaints anything up to misrepresentation rudeness or whatever. 
Some of those levels of complaint go to the complaints assessment committee. The select committee was concerned that if there was only one complaints assessment committee then there might be a logjam of complaints. The committee has made a recommendation but I have to say I am somewhat concerned because it will impose additional bureaucracy the costs of which will be imposed upon the consumer. The Real Estate Agents Authority appoints the complaints assessment committee and it appoints as many complaints assessment committees as in its opinion are required to deal effectively with complaints and allegations about licensees. 
The reason for the committees being appointed as required is that rather than being prescriptive and having a complaints assessment committee for each region it was dependent upon where the complaints were coming from. If there was a pattern then at least this gives the authority the power to enable it to form those complaints assessment committees. Each of those committees consists of three members. One of the members of each committee must be a member of the authority two must be appointed from the panel which I will come to in a minute and one appointee must be a lawyer of not less than 7 years’ legal experience. 
Then of course we had to have a panel of eligible complaints assessment committee members. The authority must maintain a panel of up to 20 persons who are suitable to serve as members of that complaints assessment committee. When assessing and considering their suitability the authority has regard to the person’s personal attributes and also his or her knowledge and experience of matters likely to come before the committee which include without limitation experience and knowledge of the law of the real estate industry and consumer affairs. So we have a panel of 20 persons who are eligible to be appointed to complaints assessment committees as required. The term of office is 5 years after which they resign from the panel. 
I have to ask the Minister what the difference is between this and the regional disciplinary committees under the 1976 Act. Surely when criticism of the real estate industry relates to two main aspects one of which is the regional disciplinary committees and the process when the regional disciplinary committees have not been approved by the Minister it would be a very simple exercise for the Minister just to have approved those regional disciplinary committees without having to go through all the paperwork involved in this major reformation of the industry. 
The other issue that was criticised and that the industry wanted reform on was the quantum of the fines. Again it would be a simple matter to amend the law just to increase the quantum of the fine from $750 to whatever is appropriate. There could be two small amendments rather than this major escapade of a sledgehammer to crack a nut that really has not been handled well. This legislation should have been easy; it should have been simple. The legislation was wanted by the industry and wanted by consumers but for reasons that have become apparent a meal has been made of it. 
COLIN KING (National—Kaikoura) 
: 
 In speaking to Part 4 of the Real Estate Agents Bill I draw the Committee’s attention to the issue raised in the National Party’s minority report that we have certainly got ourselves into a fair-old state around a bureaucracy structure. The interpretation of the various parts talks about complaints assessment committees and the Real Estate Agents Disciplinary Tribunal. After I had conversations with various real estate agents about industry training—and I had a short excursion into that particular industry—I saw that this aspect of it really did need to be tidied up but not with such a massive bureaucracy. 
If we look at some of the fines that have been attributed to the committees to determine we see that they have been stretched out to appropriate levels in a 21st century legislative structure. The fine is not to exceed $10000 for an individual and $20000 for a company. Clause 107 talks about what the disciplinary tribunal can do. Subclause (2)(f) states: “an order that a licensee who is an individual pay a fine not exceeding $15000 …” and for a company it is $30000. The clause covers the level of compensation that can be sought and a specified order cannot exceed $100000. When we stop and think about those sums of money we see that they certainly are a major deterrent in themselves. 
However it leads me to question the Minister as to whether we needed such a massive bureaucracy to achieve it. When making that comment I am raising the issue of the cost of supporting such a structure. We see that there will be a self-funding model. There will be a contribution from the membership—a general fee from the real estate sector. There will be an operating levy and there will also be a disciplinary levy. We certainly hope that we do not see an explosion of costs when we consider that the authority has the ability to appoint and maintain a panel of 20 people to be able to provide what it decides to be an appropriate level of engagement over issues. I would like the Minister to help me understand how he will be absolutely sure that that provision is meeting the intent of the Act. 
I would like to take the Committee’s attention back to clause 92 which talks about the members of the committees not being personally liable. We can appreciate that there needs to be some protection for members on a committee. The track that this process takes us down goes right through to the Court of Appeal. When that occurs anybody’s head can roll. Although we recognise the need to have some level of support and protection for the members of the committees I would like the Minister’s view on clause 92(2): “Subsection (1) does not apply if the person acts in bad faith.” There is an assumption that a person may act in bad faith; however we have not dealt with issues around conflicts of interest. We would expect those to be handled in a way that did not actually bring about vexatious and frivolous claims. I think clause 92 is just a little too robust in its protection of people who are not behaving in the best interests of the situation and not being transparent. Clause 92(1)(a) states: “any act done or omitted to be done in the course of performing or exercising any of that person’s functions duties or powers under this Act or done or omitted to be done …”. 
Hon CLAYTON COSGROVE (Associate Minister of Justice) 
: 
 I will take a brief call to address some of the points that have been raised about Part 4 and about previous parts on which members have expended a lot of hot air trying to make some conspiracy— 
Nathan Guy 
: Not hot air! 
Hon CLAYTON COSGROVE 
:—or cold air in that member’s case—in respect of appointments. Let me make the position completely clear. Some member obviously could not read the bill and said the appointments would have to be made next week or the day after the bill receives the Royal assent— 
Charles Chauvel 
: It was David Carter. 
Hon CLAYTON COSGROVE 
: Of course yes a very learned member. The truth and the facts are—if we get rid of the hot or cold air—that the provision allowing appointments to the authority to be made indeed comes into force the day after the bill receives the Royal assent. However proper appointment processes especially in the period leading up to a general election will be followed. There is no need to rush these things because work can be got on with prior to appointments being made. It is not a requirement to make appointments when this section of the Act comes into force. Despite all the puffery that we hear from the Opposition side again the facts speak for themselves. 
Ms Wilkinson raised issues about the regional disciplinary committees. She seemed to put a thesis forward that had my predecessors and I over the last decade activated regional disciplinary committees with fines I believe in the order of $2000-odd and made up of members of the industry and other lay members then somehow peace would have broken out the veil would have fallen and all ills within the industry would have been solved. That is not true. On 2 October 2006 I met with the chief executive of the Real Estate Institute of New Zealand Christine Le Cren and Mr Cleland the national president and they indeed asked me to appoint members to set up regional disciplinary committees. I urged them and have continued to urge them to use the full extent of the old law. The 1976 Act despite the conjecture that the bar is too high to refer cases to the licensing board gives the Real Estate Institute of New Zealand the facility at any stage to refer any complaint. Whether it be flogging tea bags at smoko defrauding somebody of hundreds of thousands of dollars or acting inappropriately or unethically the institute has the ability as the gatekeeper to decide where these complaints go. I urge the institute rather than setting up another structure—National members talk about bureaucracy and then call on us to activate another structure—to use the powers in the Act that have existed since 1976. 
The other bonus of referring cases to the licensing board is that the board has the ability to impose fines up to $5000—not $2000 or $750 as the other subcommittees did—and it has the ability to suspend delicense or run the errant real estate agent out of town. If the member is trying to suggest that had we activated after 10 years more bureaucracy by activating a regional subcommittee that somehow would have solved every ill then I invite her to revisit her law classes because she appears to be a tad naive. 
Somebody I think it was Mr King asked what this authority is going to do. I can tell the member one thing it will do. It will produce codes of ethics and practice. It will not produce codes of ethics such as the code of ethics prior to Mr David Russell’s redrafting of it. The Real Estate Institute of New Zealand code of ethics states in 13.5: “Members shall never publicly criticise fellow members.” There will be an era of openness when anybody can make a complaint and have it heard. The complaints assessment committees will be set up to expedite deal with and investigate complaints and will recommend courses of action. They will be well resourced indeed and there will not be the delays that we have had with the institute. As I said before I am told that a real estate agent had a case hanging over his head like the sword of Damocles for 3 years. He was not able to have his day before the institute—his day in court as it were. That will not happen under this system. 
Then we come to the issue of costs which somebody raised. Let me just say this. I have said publicly that there are around 18000 or 20000 folk in this industry. If I was to charge them a flat fee of $500 a head to fund this whole framework which I am told is on average the equivalent fee they would pay to the Real Estate Institute of New Zealand depending on where they are in the hierarchy of the structure I would have twice as much money as I need to make this structure work. It may be that as with the Real Estate Institute of New Zealand fees now a manager might pay a slightly higher fee than an agent and a salesperson might pay a lower fee. But when the average commissions prior to last year totalled $1.2 billion and the average commission which I acknowledge has probably gone down a bit given property prices was $15000 per sale or purchase members cannot tell me that the world as we know it will end and that massive costs will be visited on the property seller or the buyer because the real estate person may pass on $500 or thereabouts to the consumer—if that is what the figure is. 
National members do not like the facts. “Old Smoko” the tumbleweed over there does not like them. A spurious case is being made to try to scare people in our communities. If we set up an independent transparent authority consumers who feel that they may have been done over can go and test their case before independents so that even if they lose their case they can feel as if they went to a court that they have had their day and that independents with no vested interest and no axe to grind have assessed their case. Opponents say that all that will be put asunder because massive amounts of money will be visited on the consumer house prices will fall costs will go up and the world as we know it will end. But it is like other professions—lawyers pay more builders with licences pay more and electricians pay more to be licensed. I say come on let us get a life! The time for scaremongering is over. National members are getting a bit desperate in respect of Part 4. Those are the facts. 
I conclude by saying this. Somebody asked what the change in the disciplinary regime will be. In the current regime there is the ability to fine somebody $750 and I note that there is no legal or moral impediment on the Real Estate Institute to pass on that small fee to the victim as dictated by the legislation but it never happens. There is the ability within the tribunal if the case gets that far to have compensation—that wonderful thing where if someone has been wronged especially in respect of his or her home a large asset that person can get compensation. The fines have been lifted as the Real Estate Institute wanted. The level of discipline has also been lifted as the Real Estate Institute wanted. The ability to set up multiple complaints assessment committees and to increase and reduce the number depending on the volume of complaints is again allowed. As Ms Wilkinson says frequently: “Justice delayed is justice denied.” Well she has a dose of amnesia when she talks about this sector. She is not worried about the delays. She is not worried that in the past very few if any complaints have been referred to the licensing board when there was the power to do so. This is a board that can fine people $5000 and throw them out. That is not enough; that is why we are changing it. But that facility is not new in legislation I say to the party that says we do not want bureaucracy and that we should use the existing legislation. When it is not used there is a problem and when we cannot compel people to use it there is a problem. I say to National Party members that what I have said addresses some of their points and I ask that we get a bit of fact back into the debate rather than all the hot air and hyperbole—or cold air in the case of Nathan Guy. 
NATHAN GUY (National) 
: 
 Well after 5½ hours of debate today on the Real Estate Agents Bill we have finally heard from the Minister. What a lot of piffle we have heard! The Government has had to put the House into urgency—we are sitting till midnight this evening and having 13 hours of debate—to get through this bill. 
This Minister could have had a chance of reforming this Act but what a shambles! I cannot believe that he actually took a sledgehammer to crack a walnut as my colleague Kate Wilkinson described this Minister doing in her very very good address. This Minister had the opportunity to win over 18000 to 20000 real estate agents’ votes for this election. But do members know what? Labour will not get any of those votes because it has made an absolute shambles of this legislation. We are seeing that here today with the Government having to move the House into urgency to get this bill passed. It is just so interesting that the Minister had the opportunity to get this legislation right. One of my constituents presented a submission to the Justice and Electoral Committee—and I acknowledge the good work of Christopher Finlayson Kate Wilkinson and Chris Auchinvole on the select committee. My constituent went home and rang me that night and said that he had presented a pretty good submission but that it seemed to be just the National members who had their heads around the bill. He said that the members of the select committee who are sitting on the other side of the House did not have a clue. 
Christopher Finlayson 
: What did he say about Lynne Pillay? 
NATHAN GUY 
: Which one is Lynne Pillay? I want to talk about Part 4 because that is all about complaints and discipline. All of the real estate agents from the region where I live Horowhenua and Kapiti have a complaint for the Government. They have a complaint about the reform of this legislation—that the Government should have got it right. This process is not right and the House needs to acknowledge that today. This part is so bureaucratic. Is that not typical of this Government? The way to correct things is to have more bureaucracy—just put more bureaucracy in the way of trying to correct the complaints and discipline procedure. It will not do it. What it will do in my opinion is encourage a culture of more complaints and that is where we have a real concern about this part. 
I think the Government had a wonderful opportunity to get this reform right. The industry wanted it and the sector wanted it but it is not right. We have some real concerns about this legislation. This part addresses the nub of the issue which is the Government creating more and more bureaucracy to try to address the problem—a sledgehammer that is cracking just a walnut. 
It is an embarrassment that the Labour Government is ramming this Clark-Peters legislation through in urgency tonight—we are debating through to midnight. We are coming to the end of the term of this dying Government. It just shows that the Government has had to put the House into urgency to rattle through the legislation when it could have done it a lot sooner if it had been able to get the numbers. The Government has managed just now to do a deal with New Zealand First to get its support through Parliament. 
We have some real concerns about Part 4 “Complaints and discipline” and about how there will be this wonderful panel of 20 persons who will try to administer the complaints procedure. I heard Chris Finlayson talk about clause 97. He made some wonderful contributions on the establishment of the Real Estate Agents Disciplinary Tribunal which in part we are supporting. But fundamentally we have a real issue with this legislation this afternoon and with the House being in urgency to yet again create more bureaucracy. 
LYNNE PILLAY (Labour—Waitakere) 
: 
 I move  
That the question be now put 
. 
Motion agreed to. 
Nathan Guy 
: Party vote. 
The CHAIRPERSON (Hon Marian Hobbs) 
: I am sorry; I said “All those that are of that opinion say ‘no’. ” I heard nothing and then declared the result. I am sorry. 
NATHAN GUY (Senior Whip—National) 
: 
 I raise a point of order Madam Chairperson. I was having a glass of water at that point in time then I put my glass down. I ask the Committee that we recast the vote because it is vitally important that National votes against this legislation. I raise it as a point of order that you please recast that vote. 
The CHAIRPERSON (Hon Marian Hobbs) 
: This is a procedural motion. You will have a chance to vote against the legislation. I am sorry. If every time I had to do a procedural motion I had to watch whether people were drinking—I know it sounds very unfair but I took the procedural motion and I cast the procedural motion. [ 
Interruption 
] To the member who makes these comments I would rather you take a point of order than constantly chip from the side. 
The question was put that the amendments set out on Supplementary Order Paper 243 in the name of the Hon Clayton Cosgrove to Part 4 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 67 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1. 
Noes 53 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independents: Copeland Field. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 4 as amended be agreed to. 
Ayes 67 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1. 
Noes 53 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independents: Copeland Field. 
Part 4 as amended agreed to. 
Part 5 Duties relating to real estate agency work 
KATE WILKINSON (National) 
: 
 I rise to speak in relation to Part 5 of the Real Estate Agents Bill. This part deals with the duties relating to real estate agency work. I will refer to a few issues in relation to this but not on a clause by clause basis. The first is in relation to clauses 137 to 141 which I appreciate are being deleted pursuant to the Minister’s Supplementary Order Paper 243. I think it is important for the record to know what we are deleting. We are deleting the clauses providing for the bidders record for auctions the proof of identity for anybody who wants to bid the confidentiality of the bidders record and bids being taken only from registered bidders. This shows a huge ignorance of how auctions are conducted. It was so impractical and so unrealistic it was just not going to be workable. 
For example if one turned up to an auction and decided to bid for a property—bearing in mind that it is the auctioneer’s duty to get the best possible price—unless one had filled in the bidders record one would not have been able to bid for that property and the vendor might have missed out on the top price. But not only that bidders also had to fill in details identifying who they were and provide proof of identity which was limited to a driver’s licence a New Zealand passport an overseas passport or other proof of identity as prescribed by regulations whatever that might be. 
The Real Estate Agents Bill then stated that the person engaged to conduct the auction had to keep the bidders record for at least 3 years. Why on earth would one want to keep for 3 long years a bidders record of unsuccessful bidders who might have been interested in a section or house? At least in relation to this provision and these clauses some common sense has prevailed and those provisions will be deleted with our endorsement pursuant to Supplementary Order Paper 243. 
But I come back to something I mentioned when I spoke about Part 1 the interpretation and definitions clause because it relates to clause 129 in Part 5 and that is the definition of residential property. I point out to the Minister that residential property has been defined twice. It seems that it has been replicated both in clause 125 and in clause 129 where it says exactly the same thing. We do not need both of those definitions so for the sake of saving a few words maybe one of those definitions—which are word for word the same—could be omitted without seriously affecting the integrity of this part. I see that the Minister in the chair the Hon David Parker is looking at the bill with some interest because he at least is a lawyer and does know the importance of having sensible readable legislation that has some sense of professionalism about it. 
I asked earlier for the then Minister in the chair the Hon Clayton Cosgrove to take a call on the definition of residential property. Residential property has been defined in the interpretation clause as “property used or intended to be used exclusively or principally for residential purposes.” It has been further defined and this is both in clause 125 and in clause 129 where it is replicated by excluding “property that—(a) has been developed with other properties in a continuous area; and (b) is proposed to be sold or otherwise disposed of by a vendor who also proposes to sell or otherwise dispose of or who has sold or otherwise disposed of some or all of those other properties.” 
During the select committee process submitters were concerned about this provision because the relevance of it is that a sole-agency agreement for residential property can be cancelled 90 days after it has been entered into. This provision deals with residential property such as for example subdivisions that may take longer to sell than the 90 days or staged developments that could take longer as well. It recognises that there are some types of property like those staged developments that may take longer than 90 days to sell and some that will be staged over several years. It recognises that exception to the cancellation of the sole-agency agreement but what it does not do is adequately define residential property so we do not know what property can or cannot be included in that sole-agency agreement that can be cancelled 90 days after it has been entered into. 
During the debate on Part 1 I gave the example of lifestyle property and asked whether the definition of residential property included lifestyle property. So far I think that question has been too difficult for the Minister to address but it is an important question because in relation to agency agreements as I said earlier many of the difficulties are that a person will sign up with a sole agent wanting to sell a property and may then want to choose another agent further down the track. After 90 days that person can cancel the first sole-agency agreement and enter into another with a separate real estate agent but if there is confusion as to the definition of residential property that person might end up having in effect two agency agreements neither of which is cancelled and may end up being responsible for paying double the commission. If the Minister thinks that is unlikely I can tell him that it is not. There have been several disputes that involve two agents or more claiming commission for one sale. One of them is entitled to the commission not both but it is a dispute and an action that vendor clients do not want hanging over them especially if it can be clarified by the Minister in the Committee stage before it is entrenched in legislation. 
I think that is an important point; I do not think it is filibustering. It might be too technical for the Minister who seems just to want to make personal comments about National members but it is a serious point that should be addressed by the Minister or perhaps he could get advice from his officials. It is irresponsible to pass legislation through this House that contains uncertainties especially as to such basic definitions as residential property. I seriously ask the Minister to address this point without being too emotive about it because it is a sensible point. 
I have had 28 years of conveyancing experience so I have read several agency agreements and I have had several conveyancing transactions and I have to say that the signing of agency agreements is one of the most fraught issues that vendor clients have. There is fine print in the agreement and people are often confused as to whether they have a sole-agency or a multi-agency agreement who works in with whom how to cancel that agreement and after the cancellation of the agreement whether the sale has been affected because of what that agent did and whether the agent is still entitled to the commission. A very important practical point from the point of view of selling one’s property is what the agency agreement entails and what the definition of “residential property” includes and excludes. 
ERIC ROY (National—Invercargill) 
: 
 I have become kind of immersed in this bill. It is a fascinating over-prescription. In a lot of ways it is a bit like using a bulldozer to weed the radishes with a heap of prescription and overbearing high-handedness. We are on Part 5 “Duties relating to real estate agency work” and I am drawn firstly to clause 119 which requires that any money in respect of any transaction be held for 10 working days. But what if both parties do not want it to be held for 10 working days? In the last transaction that I was involved in—a rather modest transaction—both the vendor and the purchaser wanted a much quicker turn-round. On the one hand the vendor wanted to go unconditional on another option and needed the money and on the other hand the purchaser—moi—wanted to avoid having money sitting in a GST situation for 6 months until it could be retrieved. In this bill we have a prescription that would totally write off the opportunity for common sense when both the vendor and the purchaser want an alternative. No doubt the Minister in the chair the Hon Clayton Cosgrove will now seek some advice and come forth with a very good explanation as to why that is there. 
Then I am drawn to clause 121 “Agents’ trust accounts to be audited”. That is a really good idea. If I was a real estate agent and I had an audit account called say the “Spencer Trust” or something like that I would really want it to be audited because of its association with other names that might not be quite so wholesome. So I am quite in favour of that. 
Then we come to the latter part of Part 5. I was interested to learn from the comments made by my colleague Kate Wilkinson that all of the provisions in regard to auctions are to be withdrawn. I ask the Minister whether that is right—he could perhaps nod. 
Hon Clayton Cosgrove 
: Yes. 
ERIC ROY 
: Thank you; I commend the Minister for a sensible outcome. I am not sure why he did not seek some advice before those provisions were put in. 
This is where I have had some trouble with this bill; it has been thrown together with all kinds of aspersions cast about skulduggery shysters and every other kind of wrong involvement in the real estate industry when in reality there have been some serious overstatements. Can I confess to actually being an auctioneer? I was going to have some very stern words to say about those provisions if they had not been withdrawn. 
I will make this point for a start. There are a series of mechanisms by which a person can sell a property and it is up to the vendor to decide what mechanism to use. The vendor may not want an auction; there is sale by tender private treaty or negotiation. There is a whole range of things so I have to say that I was very very disappointed in the Minister when I saw those heavy-handed requirements about auctions included. The very nature of an auction is that it is about nuance and entertainment and it is actually about engagement in a process of negotiation verbally so it was disappointing to have had these prescriptions about bidders records times at which people cannot arrive etc. 
I tell the Minister that if I were selling something and an auction was underway and someone rolled up in a Rolls Royce—or let us say a red Hummer or something like that—and wanted to bid and went on the bidders record I would have been distressed if that provision removing the opportunity for someone to bid in that way had not been withdrawn. Then of course— 
Hon Clayton Cosgrove 
: But you’re a happy man. 
ERIC ROY 
: In this little regard. I commend the Minister for dropping out his absolutely hopeless and heavy-handed series of prescriptions about auctions. Auctions do not play a huge part in sales. Quite often they are set up to draw some attention to a property and identify those people with whom negotiations can take place. But I was just wondering what the mischief was. I mean how many people do a runner and are not around after they have had the bid? I think the Minister would struggle to come up with some numbers on that. He was happy to give us some examples before—two only—on another part of the bill when we were asking— 
Hon Clayton Cosgrove 
: If you yield I’ll give you a lot more examples. 
ERIC ROY 
: I ask the Minister which people do runners. I am not sure that that actually is the case. 
LYNNE PILLAY (Labour—Waitakere) 
: 
 What an appalling speech from the previous speaker. I will take a very short call on this part. Opposition to it comes from the party that is not a party of compulsion. What are we seeking to do with this regulation? We are seeking to have some transparency some clarity and what is wrong with that? But again from the party opposite anything that puts any duty for any clarity for consumers is seen as over-regulation. As I have said before to treat protection for consumers so flippantly in relation to the most important and biggest purchase they will ever make in their lives is just downright appalling. 
There were many submissions on the bill and the Justice and Electoral Committee did a lot of work on it. Kate Wilkinson contributed quite a bit of common sense to the bill but at the end of the day National members see some political gain in opposing it. What is so terrible about a provision whereby parties want the money held for 10 working days? This is about accountability in the system but I expect nothing more from members opposite who are members of a party that in no way believes in compulsion of any kind. They just leave it to the free market. 
COLIN KING (National—Kaikoura) 
: 
 I will address Part 5 of the Real Estate Agents Bill. The previous speaker from this side of the Chamber the very learned Eric Roy who is a very capable auctioneer—he is very capable at whatever he does—addressed the piece that I will start on which is the amendment on Supplementary Order Paper 243 in the name of the Hon Clayton Cosgrove that removes the provisions relating to auction requirements from clause 136 through to clause 141 of the bill. But I will approach that amendment from a slightly different angle. It tends to leave behind the footprint culture and attitude in which this bill was drafted. It clearly relitigates the situation when the Minister was very much on the front foot and deliberately attempting to capture a public perception but that effectively faded away very quickly and was not there. 
I will take a moment to move people away from the massive body we hear about: the approximately 20000 real estate agents. In this case we are talking about the auction system. But in a region like Marlborough if a person puts a foot out of place and does not perform with integrity that person is out of that town. That was really brought home to me when this bill was in its early stages of gestation and was being spoken to in its first reading and I was approached by the real estate principals who operate out of Blenheim. When one stops to think about them one realises they are business owners. They were First National Bayleys Harcourts LJ Hooker Ray White PGG Wrightson and CRT Real Estate. Those companies have incredible recognition and a very high profile in Marlborough including in Blenheim and they are actively involved in many many transactions so I find it very very difficult to understand how the Minister could have so simply and effectively alienated the members of those businesses from his line of thinking. 
Hon Clayton Cosgrove 
: Only the bad ones. 
COLIN KING 
: We had no bad ones in Marlborough. Those business people were very very offended. They come across as very genuine people. They were quite concerned that they were being vilified and all of the comments that have come from this side of the Chamber in a way should be seen from the point of view that there was huge angst amongst those people. 
That is referred to here in Part 5 of this bill. There is the mere fact of the need to have so many amendments come forward on the Supplementary Order Paper. A lot of the amendments are common sense but a lot of those provisions should have been there in the bill in the first place. Sure we can go on about the odd person who does get things wrong and who has done things wrongly. We realise that there needs to be a process but as is illustrated by Part 5 the intention to so accurately prescribe the registration of bidders the keeping of records for 3 years and the requirement to give bidders something to wave so they are identifiable is indicative of the whole approach that was taken to this bill. As we go through this Committee stage it has been very clear that the chairperson of the Justice and Electoral Committee Lynne Pillay feels that in this Parliament we legislate and get things incredibly right—that we are the experts. But what we often do not have is the ability to connect with the coalface where these matters are sorted out. What will come out of this legislation will be a bundle of law that when it hits the ground will turn considerably pear-shaped. 
I will talk for a couple of seconds about an incredible competition I saw when I was with the Real Estate Institute of New Zealand. It was the Australasian championship of auctioneering and it was an incredible experience. The competitors were at a really nice hotel in downtown Auckland and they had got themselves into a competition that was very similar to a Golden Shears final. There were six finalists and they had to auction off a property which they did very well. It was incredible to see the detail that those people had to keep in mind and to manage. I take my hat off to those auctioneers who see themselves as professionals and who see themselves as adding an amazing amount of flair and as getting the very best explanation and description of a property. They are able to market a property in a way that draws out the people who are interested in that sort of property and value and then on the day just like a wonderful chef does—a Jamie Oliver deal—they are able to get the very very best outcome. 
All I have to say to the Minister is that the road to hell is paved with good intentions. Sadly the Minister started off by trying to vilify those people and he tried to maximise the political opportunity. Unfortunately the perceived support that he thought would be out in the population for his position evaporated away and I have noticed a considerable back-down from him. Thank you very much. 
CHRISTOPHER FINLAYSON (National) 
: 
 Part 5 deals with the duties relating to real estate agency work and I want to take a call on just a couple of matters. The first is clause 117A which requires the agent to display certain information. That provision is picked up from section 53 of the 1976 Act. It requires that every agent must clearly exhibit a notice of his or her name and the fact that he or she is a real estate agent licensed under the Act at his or her place of business. One issue that arose is what happens if people do not have an office as such. If they have an office clause 117A(2)(a) requires that that information be provided there. What if they operate out of a car and they simply have signs that they put up outside an apartment block if they are selling an apartment block or outside a house—and we see all these signs around the place at the weekends? Are they required to comply with clause 117A? My understanding is that they are required to do so so some changes may need to be made to the notices that they put up if they are working out of their car at the weekend. 
The purpose of this clause is to require this information to be shown on notices advertisements and other publications that are issued by or on behalf of the agency or the agent. As the report of the Justice and Electoral Committee says this will hopefully promote transparency and help to protect consumers by ensuring that information about the agent is readily available. So that is why that provision was inserted and on its own we have no particular problem with that. 
The second point I want to make is to reiterate the excellent points made by Mr Roy and Mr King about the requirements where the land is sold by auction. There were a number of submissions on those particular provisions and I am referring to clauses 136 to 141. As can be seen from the clauses some of them are derived from the Property Stock and Business Agents Act 2002 of New South Wales. The evidence we received from submitters was that these were designed for a particular problem that had occurred in New South Wales some years ago thus necessitating the legislation and they did not really fit into the New Zealand legislation. We made that point and if one reads the National Party minority report one will see that we said we thought the auction bidders record was impractical. We have heard this afternoon from several of my colleagues that this regime would not have worked at all and that it would have been cumbersome and frankly silly. 
Even though we are concerned about various aspects of the bill that remain we are pleased that the Minister has heard what we were saying and has ignored his colleagues on the Justice and Electoral Committee. This proposal would not have worked and we are very pleased that it has been deleted. Because we need to get on with other parts of the bill and deal with the title and the third reading I will not detain the Committee any further on Part 5. I just wanted to bring the Committee’s attention to those two matters. 
JOHN HAYES (National—Wairarapa) 
: 
 This legislation is opposed by the National Party not because we do not want good legislation to apply to the industry but because I can assure members that the majority of the real estate agents in my Wairarapa electorate are seriously opposed to many of the provisions of this bill. They also took considerable umbrage at being invited by the chair of the Justice and Electoral Committee Ms Pillay to come and make representations to the committee and after driving for an hour and a half from Masterton being invited to appear before the committee for 5 minutes only to face another hour and a half drive back to Masterton. That is at best totally rude and arrogant treatment by a Government that I hope our community will be putting the skids under. 
In my view the legislation in Part 5 is faulty and reflective of our typical nanny State over-prescriptive attitude to developing legislation in this country. Let me give the example of clause 119 “Money to be held by agent for 10 working days”. As someone who has bought and sold the odd property during his life I can say that it is often absolutely out of the question that one would want to enter into a transaction that leaves the money sitting dead in an account for 10 working days. GST for example may apply to the transaction and because of the phasing-in of GST income and payment arrangements it may be entirely inappropriate to keep this requirement for money to be held by the agent for 10 working days. 
However it is entirely appropriate that agents’ trust accounts should be audited as provided for in clause 121. I have no difficulty with that at all. But I turn to the provisions concerning agency agreements—in particular clause 124 “No entitlement to commission or expenses without agency agreement”. As in my colleague Colin King’s electorate down in Marlborough a lot of transactions in my electorate of the Wairarapa are made on the basis of word-of-mouth trust between people who know each other. Very many transactions are never actually put on paper. At the moment I am involved in a transaction with a land agent that has nothing on paper. Each party entirely trusts the other to act in an honourable way. We do not need the over-prescription that is coming from a Government that is trying to prescribe the detail around every breath of every individual for his or her life and his or her behaviour in that life. 
It also strikes me as very strange that a client can cancel a sole-agency arrangement by 5 p.m. on the next working day. What would be the difference between cancelling it then and cancelling it on the spot? Why are we engaged in interfering in the multitude of possible transactions between people and between individuals? The law cannot ever prescribe in detail the behaviour between two people. This legislation is attempting to over-prescribe and over-regulate behaviour. 
It is of concern to National that auctioneering is removed from this legislation. Many transactions around property in the Wairarapa involve auctioning; it does not matter whether we are dealing with farm properties residential properties business properties livestock or other bits and pieces of agricultural material. 
I think it is also of concern that we should be winding up the Real Estate Agents Fidelity Guarantee Fund because I was caught up in this sort of problem myself 20 years ago with the lawyers’ fidelity fund where a particular lawyer who was representing me banked some money that was owed to me as if it was his own. When one comes to seek the guarantee of these funds it is actually quite hard to extract the payments from these bodies even though one has been done down by a professional person. I think it is quite appropriate that there should be some arrangement so that if agents transgress the small people in the community are able to recover some sort of compensation for being done down by somebody else. I will finish at this point but I reiterate that there is strong opposition to this bill amongst the real estate agents in my electorate and I do not support voting for it. 
Hon CLAYTON COSGROVE (Associate Minister of Justice) 
: 
 I will take a very short call to answer quickly a couple of questions members have raised. 
I think Mr Roy and Mr Finlayson and latterly Mr Hayes had a question around clause 119. They asked what would happen if the two parties do not want the money to be held for the 10-day period. Well clause 119(2) makes it clear that the parties can sign an authority requiring the agent to pay the money before the 10-day expiry if there is mutual agreement. It is quite simple quite logical. I do not think many people would disagree with it. 
There were two other points. Mr Hayes lambasted my colleague Lynne Pillay in respect of the Justice and Electoral Committee and said that people who had come from Masterton had had only 5 minutes before the committee. Mr Hayes has been on select committees for a few years now and should know what happens—and I think Mr Finlayson who was a member of the select committee quite rightly made reference to this matter. I am advised that as there were a large number of submissions the members of the committee agreed that where submitters were going to make exactly the same point over and over again they would be taken as a group. That is not unprecedented in the life of this Parliament or of other Parliaments and it even occurred under a National regime some years ago. 
Similarly having chaired a select committee myself I agree—and I think most other members would agree—with the observation made by Mr Finlayson that where a committee receives hundreds of xeroxed submissions with different people’s names on them but saying exactly the same thing—either that one supports a proposition or that one is agin it—then hearing all those submitters is possibly not the most effective way to deal with the political process. Those submissions are noted of course but they are treated in a similar vein to a petition which is very valuable but serves a different purpose in a different process. I think that where submitters come in simply to make a point that is going to be made over and over again they should be grouped in order for the parliamentary process to be used in an efficient way. Maybe Opposition members of the committee would not say so publicly but I suspect some of them appreciated Ms Pillay’s management of the situation. 
The final point I want to make is that Mr Hayes waxed lyrical about the fact that he is in a professional relationship when he is doing a deal with a real estate agent and does not need any protection at all. 
Hon David Parker 
: Waxed dissonant. 
Hon CLAYTON COSGROVE 
: He waxed dissonant says my legal colleague—I was going to say my learned friend but he is a lawyer and I am not—about the fact that he was in a professional relationship with a real estate agent over a property he did not need any protection and all would go well. Other members have asked about caveat emptor; what about buyer beware? To heck with it if something goes wrong and to hell with the fact that some people in our society through no fault of their own do not have the legal qualifications or the professional skill to deal with these commercial arrangements; the market will sort it out. The market will sort it out Mr Hayes said. 
John Hayes 
: If the market can’t the nanny State will. 
Hon CLAYTON COSGROVE 
: I would just make this final observation to Mr Hayes. He railed against our having any protection for the poor folk who may actually be done over—and there are many examples of that happening. I bet that Mr Hayes would have a completely different attitude if he were on the receiving end if he were being done over by an unethical person. I bet that Mr Hayes would stroll—I was going to say sprint—into the House and demand protection for consumers. 
If he does not demand protection for consumers what does he say to his constituents who come to him with exactly the same proposition saying that they did not think they needed any protection because they felt confident that all would go well? They will ask Mr Hayes as their local MP to help them because they have been dealt to and Mr Hayes will turn round and say: “Oh it is nanny State to provide any protections for you lot—my constituents in Wairarapa. Ii is nanny State. Go and fix it yourselves. It is your fault; you messed up.” I wonder what his constituents would then say to him or whether he could look them in the eye. 
It is a sort of global cliché to say that having any protection for consumers amounts to having a nanny State. Well if that is the case we would not need a legal system would we I say to Mr Hayes. We would not need a legal system or a court system to protect people. We would not need a small claims tribunal where people can take small issues—under a monetary limit—to have them sorted out because that would be nanny State would it not? I look forward to hearing what happens when Mr Hayes fronts up to his constituents. Well he will be protected now because we will have brought in this legislation but I look forward to his telling us what he would do if he were in that situation. Even with his great academic prowess his diplomatic career and his experience there is still a possibility that somebody in a professional relationship with him might act inappropriately. 
The question was put that the amendments set out on Supplementary Order Paper 243 in the name of the Hon Clayton Cosgrove to Part 5 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 67 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1. 
Noes 53 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independents: Copeland Field. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 5 as amended be agreed to. 
Ayes 67 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1. 
Noes 53 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independents: Copeland Field. 
Part 5 as amended agreed to. 
Part 6 Miscellaneous provisions 
KATE WILKINSON (National) 
: 
 Thank you for allowing me to take a brief call on Part 6 the final part of the Real Estate Agents Bill. This part relates to the miscellaneous provisions. It includes the offence and penalty provisions provisions regarding civil remedies provisions for regulations to be made by the Governor-General and some transitional provisions such as those concerning the Real Estate Agents Fidelity Guarantee Fund existing claims and applications that are pending. 
I will start by talking about the penalties regime. The penalties regime is interesting in the sense of its relativity with that in other legislation. I think sadly it indicates that there has been a bit of a personal vendetta against the real estate industry. If we look at the penalties in this legislation and compare them with those in other legislation we see that there is not a lot of relativity. I refer for example to the penalty for failure to notify the registrar of a change of circumstances. Under this bill the penalty for an individual is $25000 and for a company it is $50000. That is just for changing one’s address and not notifying the registrar in time. It could be a mere administrative slip which of course New Zealand First knows about. But the fine under the bill for that is $25000 which I say does seem to be a bit excessive. 
That is not to demean whatsoever the importance of making sure that changes of circumstances are notified. But under the bill the penalty is $25000. If we compare that situation with for example the penalty for failure to notify the registrar of a change of circumstances under the Motor Vehicle Sales Act 2003 we find that the fine in that Act is only $2000. There is a big difference between $2000 and $25000. Yes one piece of legislation relates to selling cars and the other to selling property and they have different Ministers in charge of them. Perhaps we should also go to the Plumbers Gasfitters and Drainlayers Act which is a recent Act. The fine for failure to notify the registrar of a change of circumstances under that Act is $500 as opposed to $25000 under this bill. The fine provided for in the Immigration Advisers Licensing Act is more in keeping with that in this bill; it is $10000 for failure to notify the registrar of a change of circumstances. But again that is significantly less than the penalty provided for in this bill. 
There is a penalty for failure to provide information and again I will look at that from the point of view of relativity. Under this bill the fine is $25000 for an individual and $50000 for a company. If one compares that again with a similar offence under the Motor Vehicle Sales Act 2003 one finds that the fine for failing to provide information under that Act is $2000—not $25000 for an individual as it is under this bill. In the Plumbers Gasfitters and Drainlayers Act and also in the Immigration Advisers Licensing Act by way of comparison the penalties under both Acts are $10000 for the same offence which is still significantly less than the $25000 fine or penalty that is proposed to be imposed under this bill. 
There are also offences set out in the bill that are not comparable with offences in the other Acts that I have used for the purpose of comparison. The failure to provide an approved guide again carries a fine of $25000 for an individual and of $50000 for a company. The fine for failure to provide a copy of a contractual document is again $25000 for an individual and $50000 for a company. 
I really would be interested in the Minister in the chair the Hon Clayton Cosgrove taking a call—although I am not particularly optimistic about that—and telling us how he has calculated and assessed the quantum of penalty for offences that in some situations can be just the result of a mere administrative oversight. I would also like the Minister to take a call even just to answer one question which I have asked three times so far today. It is a very simple question: does the definition of residential property include or does it not include lifestyle properties? I will ask it again because I really would like to receive an answer to it. Although I did say this would be a short call I have got carried away obviously in relation to the penalties. 
I turn to the provision in Part 6 relating to the winding up of the Real Estate Agents Fidelity Guarantee Fund. We questioned the submitters on whether it should be wound up and most of the submitters mentioned for a start that the two claims in recent history on the fund have related to property management and not to real estate agency work itself. If one looks at the purpose of a fidelity fund one sees it is a fund of last resort so one first has to go through the courts. The fund is available in relation to theft of course and the ability of real estate agents to misappropriate money is possibly limited to the extent that they hold the deposit—this is normally monitored by both the vendor’s solicitor and the purchaser’s solicitor—during the conditional period of a contract until it becomes confirmed as unconditional and thereafter perhaps for the statutory period of 10 days which was mentioned by previous speakers unless of course that 10 days has been waived which quite rightly can be done by agreement. The opportunity for an agent to actually misappropriate the funds is quite limited so from that rationale it is possibly sensible to wind up the fidelity guarantee fund. 
But from the point of view of property management for which the claims have been made against the fund it does not make the same sense because sometimes the funds are being held for overseas owners of property who might perhaps not check their accounts more than once a year when they have to do their tax returns. So property managers have more scope than real estate agents to misappropriate the money of clients. None the less Part 6 does provide for the winding up of that fidelity fund. 
There are other transitional provisions as well that cover things where there are pending disciplinary proceedings and that cover the effect of agency agreements that have been entered into before the new legislation comes into effect. The law that is applicable to them is the old 1976 Real Estate Agents Act. That provision had to be inserted in the bill at the behest of the Justice and Electoral Committee because it had not been thought of by the Minister. And there are other miscellaneous provisions in Part 6. 
I think Part 6 is generally fairly uncontentious except for the quantum of the penalties which seems to be somewhat high. One does have to wonder about the motivation behind setting such a high penalty for what is in some cases purely and merely an administrative oversight. 
Nathan Guy 
: Another tax? 
KATE WILKINSON 
: It could indeed be another tax but it is just another way of taking a personal vendetta against real estate agents and the real estate industry. The offences for which a real estate agent could be fined $25000 or $50000 are such that the circumstances would rarely affect the integrity of a transaction or actually have much of a detrimental effect on clients. In terms of relativity certainly we have concerns about the quantum of those penalties. I think Mr Chair that I will probably leave my discussion of Part 6 at that. 
CHRISTOPHER FINLAYSON (National) 
: 
 I want to make a few brief points about Part 6. I endorse what Kate Wilkinson has said and I certainly do not intend to repeat her comments about the strange level of the fines for some offences that simply do not seem to warrant it. During the select committee stage she undertook a very careful comparative analysis with other regulatory legislation. As she said under the plumbers and gasfitters legislation a fine might be $500 but under this legislation it is $10000. So it is out of kilter and it would be good if the Minister in the chair the Hon Clayton Cosgrove would take a call. If he does not want to talk about the generality of the legislation I ask him to just take a look at clause 150 which deals with offences that will be committed if one fails to notify a change of circumstances. 
What is a change of circumstances? Well if one refers to what is still clause 66 we see that one has an obligation to notify the registrar of any change of circumstances and that will mean as subclause (2) states: “(a) any change in the information recorded in the register; and (b) any change in the real estate business for which the agent branch manager or salesperson works (if any); and (c) any change that may be prescribed.” 
If one looks at the purpose of the register set out in clause 63 one sees that again it really is a consumer protection mechanism to enable the public to determine for example whether a person is a licensed agent or a branch manager and how to contact that person. So in the overall scheme of things it is pretty low-level regulation. So it does seem rather strange that clause 150(2) has these penalties up to $10000 in the case of an individual or $50000 in the case of a company. I could go through each of the offences provisions in some detail but I think Kate Wilkinson’s excellent overview should suffice and my particular reference to clause 150 enables the Minister to come to grips with it if he chooses to. 
The second point I want to make concerns the insertion of new Subpart 2A in Part 6 which makes it clear that the civil remedies a person may have against an agent branch manager or salesperson are not affected by the passage of the legislation. This bill as we have said is consumer protection legislation. Although there are compensation provisions it is primarily a disciplinary matter if there is misconduct of any sort but civil remedies are preserved and they will include claims against an agent under the Fair Trading Act or for breach of contract or negligence if we have concurrent liability in this country now and we probably have. 
The third point I make concerns the regulations. We have not yet had an answer from the Minister to the points Dr Worth raised in relation to clause 155(aa) and 155(2) and (3) and I hope that before the Committee stage draws to a close we will be able to hear from the Minister on those points because the whole regulation-making power of the bill is important and needs a response from him. 
I would just observe in passing—and it is in the category of a minor slip—that although there are references to subclauses (2) and (3) in clause 155 there is no subclause (1) so that may need to be tidied up. The major changes that were made to the regulation-making power dealt with moving into clause 155 the provisions relating to exemptions that were formerly contained in clauses 12 and 13. There is still the rather strange reference in clause 11 to exemptions that may be granted under regulations; as I said some inquiries were made and it seemed to relate only to a very few agents in the central North Island. 
What are the other changes contained in the regulations? The regulations relating to audit have been tidied up. More detail is provided about the content of regulations regarding an audit. There are better regulations relating to the prescription of offences so we have an amendment to clause 155(k) which sets the maximum penalty for any offence at in the case of an individual an amount not exceeding $25000 or in the case of a company not exceeding $50000. 
Then there is a change relating to compensation. One sees that clause 155(m) which has been deleted stated that regulations could prescribe the maximum amount of compensation payable under section 107. We had a useful discussion about that and indeed we sought the advice of the Regulations Review Committee on the appropriateness of allowing such a matter to be set by regulation. Dr Worth and his committee reported to us as a result of which we have acted on their recommendation and the maximum compensation the tribunal can award is contained in the bill itself. 
So there are a couple of inconsistencies in the regulations which the Minister may care to address. As Ms Wilkinson said much of Part 6 is unexceptional and is in fact quite sensible but there are the issues we have raised and it would be good if the Minister would condescend to provide us with an answer. 
Hon CLAYTON COSGROVE (Associate Minister of Justice) 
: 
 I rise to make one point and it concerns the point Ms Wilkinson made about residential property. She will know that clause 4 states: “ ‘residential property’ means any property used or intended to be used exclusively or principally for residential purposes”. Of course it depends on the principal use. In case she is thinking of concocting some fear amongst the owners of lifestyle blocks in my wonderful electorate of Waimakariri I just say that the only impact of whether their properties are deemed to be commercial or residential is that if they are commercial the agent of which those people are a client does not have to provide them with a guide as to their rights and responsibilities and bits and pieces and the maximum 90-day provision does not apply. Just in case Ms Wilkinson is thinking of banging out a press statement and frightening all the lifestyle blockers in Swannanoa where she lives and in other places I say to her that there is no material effect on them at all. If their property is deemed to be commercial they are dealt with in the same way effectively that they are dealt with now. If their properties are deemed to be residential then they sign up for 90 days and they are protected because they have the option of pulling the pin on the sole-agency agreement. Also the agent must provide them with a guide in respect of their rights and responsibilities. 
Just in case any scaremongering was about to happen—as the member is wont to do from time to time in my patch—those comments should allay her fears. 
The question was put that the following amendment in the name of the Hon Peter Dunne to clause 155 be agreed to: 
to omit clause 155(a). 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independents: Copeland Field. 
Noes 63 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Progressive 1. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 243 in the name of the Hon Clayton Cosgrove to Part 6 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 66 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 3; Progressive 1. 
Noes 53 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independents: Copeland Field. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 6 as amended be agreed to. 
Ayes 66 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 3; Progressive 1. 
Noes 53 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independents: Copeland Field. 
Part 6 as amended agreed to. 
Schedule 1 
The CHAIRPERSON (Hon Clem Simich) 
: The question is that schedule 1 stand part. Those who are of that opinion please say— 
Kate Wilkinson 
: I raise a point of order Mr Chairperson. I would like a call on schedule 1 if that is possible. 
The CHAIRPERSON (Hon Clem Simich) 
: No that will not possible—nor on schedule 2—but you may have a call on clauses 1 and 2. 
A party vote was called for on the question  
That schedule 1 be agreed to. 
Ayes 66 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 3; Progressive 1. 
Noes 53 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independents: Copeland Field. 
Schedule 1 agreed to. 
Schedule 2 
The question was put that the following amendment in the name of the Hon Peter Dunne to schedule 2 be agreed to: 
Under heading “Lawyers and Conveyancers Act (2006 No 1)” to omit “unless the person has had at least 6 months experience as such as a licensee”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independents: Copeland Field. 
Noes 66 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 3; Progressive 1. 
Amendment not agreed to. 
A party vote was called for on the question  
That schedule 2 be agreed to. 
Ayes 66 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 3; Progressive 1. 
Noes 53 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independents: Copeland Field. 
Schedule 2 agreed to. 
Clauses 1 and 2 
KATE WILKINSON (National) 
: 
 I will be taking just a very short call in relation to clauses 1 and 2—in particular clause 2 which is the commencement date. The bill has certain sections that come into force on the day after the date that it receives the Royal assent with the rest of it coming into force—according to the bill—12 months after it receives that Royal assent. I am aware of course that there is a Supplementary Order Paper containing an amendment by the Minister in the chair the Hon Clayton Cosgrove that increases the 12-month commencement date in relation to those sections by 2 months to 14 months. Concern has still been raised that the commencement date is far too soon to enable an industry to change its rules. This bill is reforming an industry and that industry needs sufficient time to be able to do that properly. As a comparison the Lawyers and Conveyancers Act had a 2-year transitional period for that regime to come into place. We would suggest—and submitters have suggested it—that 2 years is actually much more realistic than the amended 14 months that has been prescribed in this bill. 
When we look at what is required to put into effect this new real estate regime we see that there has to be a Real Estate Agency Authority set up. That authority has to appoint complaints assessment committees. The authority has to maintain a panel of 20 persons for those complaints assessment committees and the Real Estate Agents Disciplinary Tribunal also has to be formed and constituted. So we have to make sure that we are responsible in allowing sufficient time for those various bodies to be set up. 
When we are looking at time limits it is also interesting to note that—as I understand it—the current code of conduct for the real estate industry has been on the Minister’s desk awaiting approval since February of this year which is some 7 months. If the Minister’s amendment to the commencement date of 14 months is agreed to in the Committee this afternoon it will take half of that time just to approve the code of conduct. I think we have to be realistic and I think we have to be responsible in enabling a sufficient time for this regime—it is a totally new regime and a total reformation of the real estate industry—to be put in place. I seek the Minister’s assurance that he is confident that 14 months is sufficient to do this job properly. 
Hon Clayton Cosgrove 
: Absolutely. 
KATE WILKINSON 
: I thank the Minister for that interjection. He has given us his absolute confirmation that 14 months is sufficient. Obviously in the event he is proved incorrect we will certainly be reminding him of the assurance that he has given in this Committee this afternoon. 
Apart from that we still have concerns about the commencement date. We do not think that the concession of increasing it from 12 months to 14 months will be that material. The industry believes—and National supports it in that respect—that 2 years is a more realistic time frame. But once again let it be recorded for the record that the Minister gave his absolute assurance that he is confident that 14 months will be sufficient for this purpose. 
NATHAN GUY (National) 
: 
 We are speaking to the Real Estate Agents Bill under urgency. It is a bill that the Government wants to ram through the House. At present we are debating the title and the commencement date. 
I have been thinking about appropriate names for the bill which is overseen by the Hon Clayton Cosgrove. I wondered whether it should be called the “Cosgrove Sledgehammer Bill” or indeed the “Cosgrove Hates Real Estate Agents Bill”—that is another option—or the “Cosgrove Calls Them Land Sharks Bill”. I have heard several interviews with the Minister where he has berated real estate agents in public and called them land sharks and shonky crooks. I cannot believe he would belittle people in our community who are actually doing their best. 
This bill is all about Clayton Cosgrove wanting to make a name for himself. The Labour Party list has just come out. It is interesting to see the literature that has come into my hands. In the past Clayton Cosgrove has wanted the people of Waimakariri to elect him to Parliament but I see that that member who is overseeing this bill is now reliant on his placing on the list. It is ironic how things change when one puts one’s finger in the air. The member overseeing this bill is now reliant on his placing on the list. How times have changed! I am sure that when we are on the campaign trail the good people of Waimakariri will be reminded that that member says one thing then delivers another. 
I think an appropriate comment on this bill would be whether although some in the industry support reform its commencement date just 14 months from now gives sufficient time. It is a fairly big reform of the industry. National members would have thought that an appropriate commencement date would be in about 2 years’ time and in our minority report we put that recommendation. It is good that the Minister has acknowledged it but he has moved the date by only a little bit—about 2 months. It is also good to have on the record that the Minister and his officials believe that the date gives sufficient time for the measures to be implemented. 
The National Party has some real concerns about this bill about the commencement date and about whether the wording of the title is appropriate and I have commented on those concerns this afternoon. I look forward to making even greater remarks when we move to the third reading this evening under urgency. The Government will be ramming legislation through the House for 13 hours today—we will sit until midnight—and I look forward to my colleagues making some very good contributions in the third reading. We believe that this item is significant for the real estate industry and that the Government is being too bureaucratic. It has got it wrong. That was conveyed during the select committee process which attracted hundreds of submissions. It has taken the Government a long time to get the numbers to have this bill go through the House under urgency this evening. I look forward to the third reading which will probably be after the dinner break when we can make some further contributions. 
Hon CLAYTON COSGROVE (Associate Minister of Justice) 
: 
 I rise just before the dinner break to answer finally an issue on the commencement date. My learned friend Mr Charles Chauvel a lawyer of some eminence has pointed out to me that the Lawyers and Conveyancers Act which has been aptly quoted in the Committee as having a 2-year transition includes some 50 sets of regulations and rules that require ministerial and Cabinet approval etc. With this legislation there are 16 matters—not sets of regulations but matters—to be regulated and there are also practice rules to be put in place. 
I have been asked whether I am confident we can achieve the objective within 14 months. Yes I am. Why? Because it is core business of the Ministry of Justice. We are blessed with officials who have guided this process and have provided very very sound advice—despite the Opposition’s nay-saying. I am confident the objective will be met given that there are precedents for the setting up of these agencies. 
It is interesting to note in passing as we debate the title that there are a number of titles we could have given this bill. We could have called it the “Consumer Protection Bill” or we could have given it a name showing that the Labour-led Government was doing something that the National Government—by Mr Worth’s own admission—did not do even though throughout its 9 years in office the real estate folk had asked it to do something. It had other things to do so it did nothing about this issue. I may be doing Dr Worth a disservice; it was one of the National Party members who said that. So yes the Real Estate Institute came to this Government yes we have acted and no we have not acted I suspect in the way that certain people in the real estate leadership wanted us to. One learned lawyer in this place—I do not think he is here—advised me that they spent about a million dollars of their members’ money on hiring the most expensive lobbyists in New Zealand. I even saw a video that those lobbyists—who I am told also represent those eminent and morally upstanding party pill manufacturers—made on how to make a submission and 1300-plus people wrote submissions. 
We have got to a place now where we could quite rightly if we wanted to call this bill consumer protection legislation because it has been endorsed by Sue Chetwin of Consumer New Zealand and before her by David Russell who was pre-eminent in drawing a number of these issues to my attention and to the attention of others. We could call this bill a number of things. 
The Government started this process not 2 years ago. We took it from an idea to reality. Issues had been raised by people like Deb Leask and other victims and by the real estate folk who wanted the name of their profession restored. We put out a discussion document we met on several occasions with the Real Estate Institute we put a bill before the House and here we are. I believe that the extra 2 months—because of the legislative schedule there will be a delay of a couple of months; we are moving to an election—will allow a little more flexibility. 
To come back to the Lawyers and Conveyancers Act I think it is erroneous to compare this bill with that Act—and I suspect the lawyers on that side including Ms Wilkinson may have worked this out—because that Act is major legislation. This bill is basic consumer protection legislation. This is not rocket science. This is basic consumer protection legislation in which standards are set and monitoring is put in place. People who run amok can be hammered—I make no apology for it—victims can be compensated and the name of the profession can be restored. But I think it is a bit rich for members opposite to say we should make consumers wait 2 years when those members were approached by the Real Estate Institute time and time again when they were in Government and in 9 years did nothing. 
It is interesting that today throughout this lengthy debate not one member of the National Party or anyone else who opposes this bill has come up with one alternative proposal. I look forward to National announcing its real estate policy and telling us whether it would repeal this legislation. I look forward to that. Do those members have an alternative? Does the eminent lawyer Ms Wilkinson present an alternative to us? Oh no those members bleat on and bemoan the fact that this Government has got off its chuff and actually looked to protect consumers. I respect the fact that those members do not agree with the vehicle. That is fine. I respect the fact that they do not agree with a lot of the propositions although I still do not know why—apart from the fact that they keep levelling at me that I have a vendetta against real estate folk. Well I understand that to have a vendetta one has to have been wronged I think—the eminent lawyers to my right will tell me. Normally with a vendetta—if one wants revenge—one has to have been wronged. Well I have been involved in real estate transactions and I have had no problem at all with any of the real estate folk I have dealt with. There is no vendetta. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 66 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 3; Progressive 1. 
Noes 53 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independents: Copeland Field. 
Clause 1 agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 65 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 3; Progressive 1. 
Noes 53 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independents: Copeland Field. 
Amendment agreed to. 
The CHAIRPERSON (Hon Marian Hobbs) 
: The amendment from the Hon Peter Dunne to clause 2(2) is now ruled out of order because it is inconsistent with the previous decision of the Committee. 
A party vote was called for on the question  
That clause 2 as amended be agreed to.  
Ayes 66 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 3; Progressive 1. 
Noes 53 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independents: Copeland Field. 
Clause 2 as amended agreed to. 
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon CLAYTON COSGROVE (Associate Minister of Justice) 
: 
 I move  
That the Real Estate Agents Bill be now read a third time 
. I take great delight in doing so. I open the debate by making a couple of thankyous. Firstly I thank a number of people outside this place. I thank a woman called Deb Leask who is a victim of some of the disreputable behaviour of the minority of agents in the real estate industry. When these issues were brought to my attention she was brave enough to expose her personal issues in respect of her transaction and to demand that there be change. As for other victims who deserve to be noted I mention also the late Bronwyn Hilbron and her family who have yet to see justice for what she went through. I pay tribute to the Ottaways and to all the other folk who either wrote to me or went to the media and outlined situations where they felt rightly or wrongly they had been wronged. 
I also note that throughout the debate on this bill the National members have brought up only two examples of consumers who had been wronged. Rarely did they acknowledge that there was any issue in the industry to address. In the National Party’s view of course we have nirvana: there is no issue there is no problem and no real estate agent has wronged a Kiwi. I tend to disagree with that. 
It is often said that the three most important things in real estate are location location location. Well in just over an hour the four most important things in the real estate sector will be the consumer the consumer the consumer and as well those innocent and professional real estate agents whose professional skill and reputation is degraded every time one of their number runs amok. I have been accused in this debate of all sorts of things: of being vengeful and of having a vendetta—I think that colourful language was used. Even Simon Power cringes at that. Some of his colleagues actually used that term. 
Hon Member 
: Oh come on. 
Hon CLAYTON COSGROVE 
: No Simon Power did not use it. I make this point: I have no vendetta against the real estate industry. I have engaged in private real estate transactions and used agents before and they were outstanding. By definition to have a vendetta means that I personally have been wronged. Well I personally have not been wronged. I am one of the lucky people who have had good dealings with reputable professional agents. But I and this Government make no apology for perhaps using some colourful language. 
I respect Mr Dunne. He knocked off the common-sense Mr Nice Guy routine today put the boots on and had a good crack at me. That is OK—that is called democracy and I respect his view. But I make no apology for calling those who did consumers over land sharks and I make no apology for saying there are rogues in the industry because there are. Agents told me about and wrote to me with examples of them. I make no apology for taking the Queen’s shilling doing my job and as a public servant standing by every Kiwi who has been done over. That is called doing one’s job as a member of Parliament. I heard propaganda from National members who said I had lambasted everybody in the industry for being a land shark a rogue or whatever the term was. Well they will keep saying that; they will say it again in their repetitive speeches tonight. The facts are and the press statements show that that was never the case. That was a myth created by some in the industry and perpetuated and promoted by the National Party. But who cares about that? 
The most important people in this whole deal are the honest real estate agents and the consumers. Tonight they will have protection. There has been criticism for instance that this bill does not deal with property managers. Well we have announced that there will be a review—a review that will take place within the 14-month period before this legislation is implemented after it is enacted. If the review provides evidence and fact not hearsay and piffle—such as the ring-arounds from various people in the industry who said that one in five complaints was about property managers but who provided no evidence of that—and if legislation is required that legislation will be brought to the House enacted and implemented and it will come into force at the same time as this legislation in 14 months’ time. It will be a concerted measured approach to an issue on which very little evidence has been provided. 
I thank the officials. I will not name them because they may at some time want to buy or sell a property and they may get into some difficulty if it is known they worked on this bill with me. But the officials are from the Ministry of Justice and they know who they are. They did a stunning job under I might say some duress. I pay tribute to the Justice and Electoral Committee but I say one of the disappointments in the process concerned the way that committee members were treated by some people. There was some bullying of officials. I am told that highly paid lobbyists got a million bucks from the industry. I think Ms Chen was the key lobbyist—I am told that she also represents the party pill manufacturers so members should work that one out. I think those people did not act as they should have acted in terms of the pressure that was brought to bear on some people. 
I thank my colleague Lynne Pillay and Simon Power. We did have a difference of view but I respect Simon. Mr Finlayson who I think also became tired of hearing the rote submissions made a contribution as did Ms Wilkinson and others and on our side of the select committee of course Charles Chauvel a learned lawyer and Louisa Wall. They managed a very difficult process. The committee members managed a huge number of submissions and they came under pressure and took the hit from many in the industry. 
I look forward to working with this industry. I think this bill gives us a wonderful opportunity to get rid of the bad guys. We will restore recover and promote the positive work of those in real estate restore the faith that consumers in our community should have in this industry and people—men and women—will be able to hold their heads up high. This is not rocket science; this is basic consumer protection legislation. 
I just say to the National Party members as they warm up and put the liniment on getting ready to go into this debate that they have not served consumers or the New Zealand public well. They have talked about the industry at length promoting and safeguarding it; they have not talked about ordinary Kiwis. And I make this point to those who have listened to the debate on this bill: there has been not one policy not one idea and not one alternative from National. I do not mind criticism; I think it is good to have a contest of ideas. If Simon Power and Kate Wilkinson get into Government will they repeal this legislation? Will they tell us that? Will they announce their policy on the real estate industry? I do not think so. Once they go into the communities and talk to constituents and real people will they find people who disagree with having their biggest property transaction and the biggest asset in their lives protected? People will know that if something happens and they feel aggrieved they can go to an independent authority. If a person wins his or her case the offender can be struck off and can be fined and the victim can get compensation and feel good about himself or herself unlike the situation now where it costs 750 bucks to bring a complaint and the gatekeepers determine whether they will even look at it. 
I do say this: I think there are times in this Parliament when we should put a bit of the pettiness aside and I think Mr Power—I will not talk about the other National members—as a lawyer genuinely believes that consumers should be protected. I think he genuinely knows they need to be protected because he has probably dealt with a number of constituents so he knows that people have been done over and there was a need for change. This industry was given a couple of chances to implement change itself and it chose not to. Communities demanded that we act and we have acted. That crew over there on the National benches had 9 years. They were approached by concerned people—they admitted that; I think it was Mr Carter or Mr Worth who did so—and they said by their own admission in the debate that they did nothing about the industry. I am prepared to cop the criticism the name-calling and all that drama. But I say where is National’s policy where are the ideas and where is the alternative to this bill? I thank the Justice and Electoral Committee Parliament the officials the victims and the honest real estate folk who will be able to hold their heads up high as they proceed through these reforms and their industry is restored to the status it should have. 
KATE WILKINSON (National) 
: 
 I am delighted to lead off on behalf of National in relation to the third reading of the Real Estate Agents Bill. Can I say from the outset and we have always said from the outset that we support wholeheartedly and absolutely the purpose of this bill. The purpose of this bill is to promote public confidence in the performance of real estate agency work and to protect the interests of consumers in respect of transactions that relate to real estate. The Minister mentioned before that the three most important things in real estate are consumer consumer consumer. During the Committee stage he actually said he was part of a listening Government. I would just like to put on the record that the Hon Peter Dunne had some very sensible and practical amendments to this legislation that National did support. One of those suggested amendments was that the authority must consult with the industry training organisation for the real estate industry. The second one was that the qualifications—the experience of real estate salespeople—should not be 2 years out of 10 years or as amended by the Minister 3 years out of 10 years but 5 years out of 10 years. That is to protect the consumer. That is all about the consumer. There was nothing subversive about that nothing radical about that but did the Government members listen to that? No they did not. They ignored it completely. 
This bill should have been an easy bill. This is not an industry that was dragged kicking and screaming—to quote the Minister—to reform. This was not that situation at all. The industry itself has been asking for reform for over 10 years. Yet the Ministers of the day said that it was not part of their policy priorities. The industry had been saying for 10 years that it wanted reform. Mr Dunne mentioned two matters that could quite easily have helped the situation and protected consumers. One was to actually put in place the regional disciplinary committees. They are already provided for under the existing legislation. What did the Minister do? He had the opportunity and he had the power. In fact he was empowered to appoint lay observers on that committee and to validate that committee. For more than 10 years he did not do so so we did not have any regional disciplinary committees to deal with some of those complaints at that early stage to expedite the complaint process. 
The other suggestion and again the industry had been asking for it for over 10 years was to increase the amount of the fines; $750 admittedly was not sufficient. The industry did not think it was sufficient the Government did not think it was sufficient we did not think it was sufficient but for 10 years or more the Minister had been approached by the industry. The Government has had four official approaches in the last 10 years by presidents and others of the real estate industry to address these matters and what did this Government do? It did absolutely nothing until this Minister decided he would go on a real estate crusade and talk about land sharks in the industry talk about carnage and talk about cowboys—he decided that this would be his crusade. 
Well we now have a bill at its third reading. The National Party minority report—and we did do a lot of work during the select committee process—actually expressed some concerns. It is at least satisfying to some extent that some of our objections have been addressed. The uncertainty created by the 5-year review of the employment status of real estate agents has been addressed. That is no longer hanging over the heads of salespeople not knowing whether they are employed or self-employed. There is still the issue that has to be addressed between what is meant by supervision as opposed to effective control under the existing legislation which has been tested in the courts. Now we have new phrases and I am sure they will be tested in the courts as well. 
The auctioneers provisions in this bill had a bidders record and it was the most unrealistic impractical section of legislation that I have seen for a long long time. Thankfully again that was taken out of the bill by a Supplementary Order Paper of the Minister and so it should have been. Who on earth would want to have to keep a bidders record for 3 years even before a bidder knew he or she was going to bid because it might be a spur of the moment bid for a property and the vendor wants to get the best price and he or she had to produce identification—had to produce a passport. Now who takes a passport along to an auction if he or she wants to buy a property? Thankfully— 
Simon Power 
: They could take one of those new ones of Rick Barker’s! 
KATE WILKINSON 
: Oh one of the microchip ones; maybe that would work. But thankfully that provision was also deleted. 
This bill is about consumer protection and it should be about consumer protection. But it should also be about making responsible law and certain law. Now I asked the Minister and I had to ask him about five times during the Committee stage what the definition of residential property was because that is very important and it is actually covered several times in the bill. I said: “Are lifestyle properties included or not included in the definition of residential property?”. That is material to whether the client can cancel a sole agency agreement. Finally after the fifth question he did say that yes it is. The reason I asked that question is that I wanted an assurance. Believe it or not some people actually read the  
Hansard 
 transcripts to get some idea of what is intended by the legislation and by the parties in this House. I wanted it recorded in  
Hansard 
 that the Minister intended by his legislation that lifestyle properties would be defined and included in the definition of residential property. Although that might seem a small matter it is not a small matter if one has a vendor client who has the uncertainty of not knowing whether his or her lifestyle property is residential and cancels one sole agency agreement and enters into another and suddenly finds out that his or her property does not come within that definition it is not excluded and therefore he or she has to pay two commissions. That on the ground is one of the very practical things that has to be addressed by this bill. 
We also heard the definition of real estate agency work and the definition of transaction and the situation regarding shares and whether for example a rural property owned by a company which the parties decide to sell by way of shares rather than by way of real estate would be caught by this bill. We have had no clarification whatsoever. This bill still leads to a lot of uncertainty and uncertain law is not good law whatsoever. 
Property management is not included in this bill. We have heard arguments that it comes outside the scope of the bill but that did not seem to matter with KiwiSaver in relation to the meal breaks bill. Even though it was outside the scope it was included. So why is it not included here? Property management is an integral part of the real estate industry. We heard that the only claims in recent years against the fidelity fund were in relation to property management. We have seen in the headlines the scenario with Blue Chip. Property managers have more opportunity to misappropriate funds than do real estate agents because of the length of time that the money is held in their trust account. Now that property managers are not regulated they do not have to have a trust account and they do not have to be audited. In fact one real estate agency in Christchurch said that this will save it $10000 a year in agency fees. And this is supposed to be legislation for the protection of the consumer! This is not legislation for the protection of the consumer. This bill waters down that protection of the consumer. Property management is such an integral part of real estate that it should have been included. I think it is negligent that it is not included. 
Can I just finish by saying that of course we support legislation that protects the consumer. Of course we support legislation to reform an industry when that industry itself wants it and needs it and the consumer wants it and needs it. But this legislation does not do that. This legislation is a missed opportunity. It is a disappointment and it is a missed opportunity because of the attitude of some Government members and in particular of the author of the bill. I think that is sad because we do not have workable legislation and at the end of the day the consumer will not be more protected by this than under the existing legislation. 
CHARLES CHAUVEL (Labour) 
: 
 I am pleased to be able to speak in the third reading debate of legislation that provides for a long-overdue overhaul of the Real Estate Agents Act 1976. It delivers on the Government’s promise to bring accountability transparency and openness to the real estate sector and to establish an independent complaints system that really does protect consumers and supports honest real estate professionals who as the Minister has said time and time again and as we saw at the select committee constitute the vast majority of participants in this industry. It is correct and right that this bill should put an end to the industry’s self-regulation and introduce a range of consumer protection measures including compensation on a proper basis for consumers who have been ripped off. I was astounded to hear the previous speaker say that this legislation waters down existing protections. All one needs to do is read through the bill to see that in fact the protections are massively strengthened and that is great for consumers and for those honest hard-working real estate agents who form the backbone of the industry. 
The select committee process was robust and I was really pleased to participate in it as a Government member. I think the chair of the Justice and Electoral Committee my colleague Lynne Pillay did a terrific job of making sure that people had dignified hearings and understood that they were being listened to with respect which is an important part of the process of Parliament interacting with the people. I am also interested in the reforms that are enacted in the Supplementary Order Paper and on reflection I think they are sensible. 
Rescinding the requirement to review the employment status of salespersons is appropriate but I do not think we should lose sight of the issue that alone in New Zealand employment law along perhaps with sharemilkers real estate agents have this odd statutory provision that entitles them to be regarded as employees whether or not all the other indicia and tests as to employment status exist. We heard evidence in the select committee that this leads to a race to the bottom in boom times. We are not in those times any more so it might be that we have a temporary reprieve from the problems that having a compulsory employment status lead to. Let us face it the reality is that should a review of the status of real estate agents be required at some point it can always be done at the behest of the Minister. It does not need legislation to require it. It is probably appropriate given the circumstances that we find ourselves in to rescind that requirement. 
I think also on reflection the decision to rescind the regulation of the conduct of auctions is probably the right way to go. The major evil that the original provisions were designed to deal with was the issue of dummy bidding not that that seemed to register with the Opposition ironically. But we did hear evidence that the real estate industry is taking significant steps to clean up its act in that area. I am very confident that through its consumer-education role the new Real Estate Agents Authority which the legislation will create will ensure that consumers are aware of the issues that may affect them if buying or selling real estate through auctions for example. Again we can be confident that there are measures in the legislation that will deal with the evil that it was intended originally to address by regulating auctions in the way that was intended. 
I think the decision to raise the experience criterion for a licensed agent or branch manager from 2 out of 10 years to 3 out of 10 years is the right way to go. Clearly we need to address the concern we heard in the committee that 2 years’ experience over the last 10 years is not sufficient. 
Finally on reflection the decision to formally require consultation with the Real Estate Institute of New Zealand over appointments to the authority and the disciplinary tribunal is appropriate to ensure that the transition between the current regulatory regime and the proposed one is smooth. As I said in my Committee stage speech that was probably going to be a requirement on the Minister anyway given the provisions of the Crown Entities Act to appoint appropriately qualified people. That would have required some sort of consultation process with industry anyway so we will probably end up with the same sort of result. 
I have already acknowledged the sterling efforts of the chair of the select committee. I mentioned the work of the officials in my second reading speech and I will not name them as the Minister refrained from doing but I do want to express gratitude to them on behalf of the committee for their hard work. I would also like to acknowledge the majority of agents who came before the committee and made responsible submissions. They showed us that they intend to muck in and work through the issues that they need to in their industry to make sure that there is proper public confidence in that industry. I wish them well in the tougher economic times that we are experiencing. 
I did want to comment on one other matter though. I refer to the praise that was heaped upon the Supplementary Order Paper moved earlier in the House by Peter Dunne and supported by the National Party. There is a regrettable trend in this House in my respectful view that persons who do not attend select committees none the less come into the House to speak move amendments and vote as if they are somehow greatly informed by the consultation process that we have been through. The reality is that the committee process exists for a reason and my money generally will go with the amendments that have stood the test of the select committee process rather than on a fly-by-night basis without having heard the evidence. I am afraid that Supplementary Order Paper clearly comes into that category. 
It is a matter of regret that the National Party has chosen to maintain what I regard as its pro forma opposition to this legislation—just opposing for the sake of opposing. But the public is wising up to the National Party as the Roy Morgan poll shows tonight with a gap closing from over 21 percent to just over 6 percent and over half the people saying the country is on the right track. That is because this is a Government that is in touch with what Kiwis want unlike the Opposition. The Opposition has only three approaches: copying the policies of this Government keeping secret what its policies are from ordinary Kiwis and just going through ritualistic opposition on bills like this one. 
Gerry Brownlee 
: I raise a point of order Mr Speaker. The member knows it is not appropriate to mislead the House. There is no way that we are copying Labour Party policies because there are none on its website. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Thank you Mr Brownlee. I was looking for a point of order but not that one. I thought you might think the member was being irrelevant. That being the case yours was not a point of order and the member will continue. 
Gerry Brownlee 
: I raise a point of order Mr Speaker. I am worried about the member’s relevance but I did notice that one of the Ministers took time to release one of our policies tonight. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: OK Mr Brownlee. Thank you for that. 
CHARLES CHAUVEL 
: I am sorry I have upset Mr Brownlee so much with the good poll news that the Labour Party is enjoying at the moment. 
All I would say in conclusion is that Kiwis are not fooled by the National Party’s approach and they will rightly welcome this legislation. 
SIMON POWER (National—Rangitikei) 
: 
 It never ceases to amaze me how sure of themselves the Labour Party members are on these issues. Over the last 18 months while National has been so far ahead of Labour in the polls we have modestly gone about our work. Tonight the Labour Party members find one rogue poll and they are cock-a-hoop in this House telling us it is all over and they are on the way back. Well I have news for them: they should just wait another 10 days. That is all I have to say about that matter. 
The Real Estate Agents Bill is worth a few cursory remarks on the way through. I will start by saying the Labour Government had an opportunity at the first reading to get this legislation right. When the Minister came to this House and put this bill before the debating chamber National Party members pointed out at that stage the five or six things that would have to be changed in the legislation in order to make it work. Not only did we do that but we stood and told Government members which provisions of the legislation we supported. Our position on those matters and those factors has never changed; it has been perfectly consistent from the day when I and my colleagues stood up and took first reading speeches on this bill. 
What happened on the other side of the House? On the other side with regard to this legislation we had the Minister storming through the House and announcing the fact that there was to be legislation to wipe out land sharks; he announced that at least five or six times before the legislation was finally introduced. He stood in this House and told us that the Justice and Electoral Committee would do its work. The Government refused to listen to the advice of the submitters to that committee. It brushed them aside as though they did not understand the important points that they were supposed to understand. The officials struggled with the bill because of the practicality of what was being offered by the submitters but the directions from the Government made the officials be pushed and pulled in a completely different direction. They are to be commended for weathering the appalling arrangement that we had to endure in that regard. 
Then the Minister was so sure of himself and of the numbers he had to secure the passage of this legislation that the bill was reported back to the House. Once again National took the opportunity in the minority report on the bill to put on record the five or six things—the same five or six things that we had pointed out in the first reading—that needed to be changed in order for the legislation to work. The Government said no it knew best what would work and said it had the numbers to pass the bill. Let us pause in time. The Government did not have the numbers to pass the bill; that became apparent immediately upon the report back. What position did that leave the Government in? It left the Government in the position of having to negotiate—funnily enough—on four out of the five or six things that the National Party had said right from the start had to be changed in order for this legislation to progress. 
Now I do not know about the deals that were done with other political parties to ensure that the numbers were stitched together in order for this legislation to pass. But whichever political parties were involved I congratulate them on recognising that four of the points where the Government rolled over were matters introduced by the National Party—matters raised at the first reading of this bill raised by the National Party through the select committee and raised in the report back—and still being raised by the National Party today. The question is given that the Government knew those changes had to be made why it did not hear submissions on them. What an appalling process it was when the Government said it would not listen to any of the submitters or take any of their advice. It decided it was pressing ahead but if it had to do a deal to get the numbers to make the legislation work well at the ninth hour it would introduce a Supplementary Order Paper with all the changes on it that the National Party had suggested 4½ months ago. What an appalling process! 
The problem is that the Government has left out the most important changes and that is why the National Party continues to take exception not only to the procedural arrogance and deficiencies surrounding this bill but to matters of substance as well. We know for example that the short transitional period is nowhere near the length that was made available under the lawyers and conveyancers legislation which is an equivalent industry-based statute. This bill has provided for nowhere near that period. Property management is left outside the bill despite the Government being told time and time again by submitters that it should be included in it. The Minister had the ability to fix that during the Committee stage and he declined to do so. We also know that the experience requirement for a licence has been increased from 2 years’ experience in the previous 10 years to 3 years’ experience in the previous 10 years. But we have said all along that 3 years’ experience in the previous 5 years is a preferable formula. There were missed opportunities to deal with auctioneers and their particular regime but more specifically there is the missed opportunity relating to property managers. 
The process around this bill when compared with the way Lianne Dalziel dealt with the financial advisers legislation has been nothing short of combative and unnecessary. Right from the start had the approach by the Minister and the Government been to try to get workable legislation in place we would not have had to endure the farce that ended up with Supplementary Order Paper 243 in the name of the Hon Clayton Cosgrove being introduced at the very last minute as part of a political deal stitched together on four or five matters the Government had refused to listen to the National Party on right from the start. That just proves that no one political party has all the ability all the knowledge and all the right contacts to make the process work in a way that would have seen this bill advance in a much more satisfactory manner. 
I conclude by thanking the thousands of people in the industry who took the opportunity to make submissions. It is just a shame they did not have that opportunity with regard to the amendments on the Supplementary Order Paper. But they did make submissions on the bill at the select committee hearings chaired by the honourable member Lynne Pillay. I attended many of those hearings and I say the submitters who came before the committee were by and large extremely positive in the sense that they wanted to engage on the bill—because they probably had not had an opportunity to do so up until then—and they came along with some pretty constructive and positive suggestions to make. I just think it is a shame that because of the Minister’s blind adherence to a policy that was set up in a combative and direct framework we did not take the opportunities to make those changes earlier in a decent and coherent manner—changes that have ended up having to be made at the last minute by way of the Supplementary Order Paper. So National will continue to oppose this legislation on those substantive issues and process issues. The Minister when he made his contribution said he wanted to know our policy in respect of this matter so I will advise him of it again. If the Minister is listening I tell him that it is the same five points that we made at the first reading it is the same five points that we made at the second reading it is the stuff we had in our minority report on the bill and it is the same points that we are making here again tonight. 
PITA PARAONE (NZ First) 
: 
 My presentation in this the third reading of the Real Estate Agents Bill probably will not be as dramatic as that of the previous speaker Simon Power. 
Hon Annette King 
: What about as loud? 
PITA PARAONE 
: I do not need to be. But I ought to say that I do agree with one of his sentiments and that is that no one political party has all the answers. I always thought that politics was about getting the numbers and to get the numbers one had to negotiate one’s own positions. Notwithstanding who may have been responsible for the five points the previous speaker alluded to I think the important thing for consumers in this country is that this bill will give them confidence in the profession of real estate agents. 
New Zealand First supports this bill as we have done right from the start. In the first reading when one of my colleagues made our presentation we supported this bill going to select committee. Why? To allow the people of New Zealand to have their say. As the report back from the committee indicates over 1300 submissions were received. Hearings were recorded to almost 700 of those submitters. Quite clearly there was a need for change. Quite clearly any change required responsible law. In both cases this bill does provide that. Part of the responsibility is providing consumer protection but also protection to those within the profession. This bill establishes the Real Estate Agents Authority which will essentially be a Crown entity. It will consist of seven members all requiring certain qualifications in order to sit on that board. It brings to an end self-regulation which has pervaded this profession up to this point in time. It is that self-regulation that has drawn the criticism from the general public. 
I have heard comments about the attitude taken by the Minister. Other Ministers may have approached the legislation quite differently but I think it is important that at the end of the day we end up with legislation that is responsible and provides increased protection for the consumer. The bill outlines a complaints and discipline procedure. We think these procedures allow issues to be dealt with quickly and justly. 
Another point raised by critics of the bill was the issue of property management. I said in my second reading speech that property management was outside the scope of this bill. A subsequent speaker said that it was not. However when I made reference to consideration being given by the Minister to having the whole issue of property management reviewed he indicated that that review would fall in line with the time in which this bill is to come into effect. 
As I said earlier on this bill will go a long way to restoring the confidence of the New Zealand consumer in this profession. I know that probably some members within that profession will feel that the bill goes too far; others conversely will think that the bill does not go far enough. With regard to those people who have criticised the bill in this House today I wonder what they will do if they are given the opportunity to be in Government and whether if their criticism of this bill is such that they would repeal it. No comment was made in that regard. 
I want to also make reference to criticism about the Supplementary Order Paper that allows a 14-month time frame for the bill to take place. There was comment about the fact that in the Lawyers and Conveyancers Act they required a period of 2 years. My response to that is: why should the New Zealand consumer have to wait 2 years before the protection that this bill will afford them kicks in? I personally think that even 14 months may be too long but it is much shorter than the 2 years that some people in this House would like to see. 
I do not need to go on any further about this bill. I think the Supplementary Order Paper introduced by the Minister addresses a lot of the concerns that critics of this bill had. I take this opportunity to thank the members of the select committee. I also take the opportunity to thank the Minister for allowing New Zealand First to make its submissions and express our concerns about the bill which has seen some of our concerns addressed in the Supplementary Order Paper. I commend this bill to the House. 
Debate interrupted. 
Business of the House 
GERRY BROWNLEE (National—Ilam) 
: 
 I seek leave for all bills on the urgency motion to be discharged at the end of this third reading. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The member has sought leave. Is there any objection to that course of action being taken? 
Sue Moroney 
: What is the point of order sorry? 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Would the member care to repeat it? I do not think the whips heard. 
GERRY BROWNLEE 
: They were not listening. 
Hon Annette King 
: We have to be allowed to hear it. 
GERRY BROWNLEE 
: I did. The member was on the phone. 
PITA PARAONE (NZ First) 
: 
 I raise a point of order Mr Speaker. I did not hear the point of order. I was just wondering whether the member could repeat it. 
SUE MORONEY (Labour) 
: 
 I raise a point of order Mr Speaker. Can I ask— 
Gerry Brownlee 
: You cannot have a point of order— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: There is a point of order on the floor please. 
Gerry Brownlee 
: I raise a point of order Mr Speaker. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: No no. I have a point of order. 
Gerry Brownlee 
: I sought leave— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Mr Brownlee I am on my feet. 
Gerry Brownlee 
: I sought leave. You cannot override the Standing Orders like that. You must put the leave. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Mr Brownlee there is a point of order on the floor on my right. The member is perfectly entitled to do that. 
Gerry Brownlee 
: What Standing Order gives her the right for that? 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Point of order the honourable member Sue Moroney. 
Gerry Brownlee 
: You cannot have a point of order when you already have a point of order. I sought leave—your only option is to put the leave. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Mr Brownlee please be seated. I am on my feet. You know the rules—you are a longstanding member and you know precisely what the situation is. There is a thing— 
Gerry Brownlee 
: You cannot take a point of order when there is a point of order on the floor. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: There is such a thing in the House as common courtesy. The members did not hear what you said. 
Gerry Brownlee 
: I will say it again. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I think that might help. 
GERRY BROWNLEE (National—Ilam) 
: 
 I simply sought leave for the House to discharge all bills listed in the urgency motion at the conclusion of this third reading. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Is there any objection to that course of action being taken? There is objection. 
Real Estate Agents Bill 
Third Reading 
Debate resumed. 
CHRISTOPHER FINLAYSON (National) 
: 
 Mr Assistant Speaker—[ 
Interruption 
] I do not think I need a lecture on being awake from the member for Rongotai. 
Hon Annette King 
: I wasn’t talking to the member. I was talking to his whip. 
CHRISTOPHER FINLAYSON 
: Well I am talking to that honourable member. I have spent a lot of—[ 
Interruption 
] 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Please members. It has been a long day. It has been a long night. Everyone is tired. I now call the honourable member Christopher Finlayson. 
CHRISTOPHER FINLAYSON 
: Well I am certainly not tired. I am anxious to get involved in the third reading speech. Unfortunately the justice team in the Labour Party headed by the member for Rongotai really have not the faintest idea about basic principles of industry regulation. 
Now let me tell the honourable member a couple of things that National believes. We believe that the Real Estate Agents Act 1976 is overdue for reform but we oppose this legislation and our reasons have been very carefully set out first by Kate Wilkinson then by Simon Power. Reform of this area is overdue. The 1976 Act has outlived its usefulness. That was a point made time and time again to the Justice and Electoral Committee by members of the real estate industry. For the Labour Party to stand up in this House and grossly misrepresent the position of the National Party and its principled opposition frankly makes me sick. We accept there is a need for reform but the devil is always in the detail and in the way one goes about the reform. The way one goes about reforming a major area like this is not to romp around the country like some third-rate Rambo—which is all the member for Waimakariri is—but rather to concentrate on the reform master the detail and listen to what people are saying. My advice to Mr Cosgrove would be to adopt a “Hey we’re all in this together.” kind of approach— 
Hon Annette King 
: Don’t be so nasty! 
CHRISTOPHER FINLAYSON 
: Oh the member says I am nasty. I am simply giving the member a few lessons. If she wants lessons on nastiness she should hear some of the comments that have been made in this House today by her colleagues. A ritual recitation of that kind of rubbish does her no credit at all and even though she is getting on in years it is time she grew up. 
But let me deal with the detail of this legislation instead of responding to the third-rate ravings of the member for Rongotai. It is a gross misrepresentation of the position to say that the National Party is opposed to reform. We are very much in favour of reform but certain key matters were not addressed and they have remained matters of concern to the National Party throughout. Ours has been a principled opposition. As Mr Power said they were the points that were raised in the first reading. They were dealt with in the second reading. They were dealt with by National members in the course of the select committee hearings when a number of us played a full and active role and they have been made again in the third reading. Now let us recite those concerns one more time. 
The primary concern I had was that property management is not contained in the Real Estate Agents Bill. Most submissions the select committee received emphasised the need for that particular form of real estate activity work to be included in the bill. As we said in our minority report property management is often an integral part of real estate work and if the real objective of this bill is consumer protection then it must be in there. We are not satisfied when the Associate Minister of Justice Clayton Cosgrove says: “Oh well I will look at it and maybe over the next few years we should be able to do something.” That is unacceptable. It was unacceptable when the bill was introduced and it is unacceptable now. 
The next point was our concern about the uncertainty created by the 5-year review of the employment status of real estate agents. Again we made the point that this was a sword of Damocles hanging over the real estate agents that was not justified. We said that if one was to have a review of clause 49 which related to the employment status of a salesperson then that could be done but it should be done by the Department of Labour. What we find is that the principled points in opposition to this clause which have been picked up by New Zealand First and possibly also by the Green Party have been noted by the Government because clause 50 will not be part of the bill. 
The next point we made was a very serious one about the inadequacy of the transitional provisions. We said that 12 months was not enough and I am of course referring to clause 2 which deals with the commencement provisions. The amount of work that has to be undertaken to get this legislation shipshape before it comes into force requires a period of more than 12 months. The Associate Minister has come back and listened—kind of—and said that 14 months will do. We said that he should look at the lawyers and conveyancers legislation which had a period of 24 months. I can assure the House that every one of those months was required by the Law Society the Ministry of Justice the Bar Association and others to deal with the preparatory work to get the legislation knocked into shape and now it is in force as from 1 August 2008. But when one looks at the magnitude of the change here with the creation of the authority—the creation of the complaints body set out in Part 4—one sees that an enormous amount of work is required to be done. 
In particular we note that sections 14 to 28 come into force on the day after the date on which the legislation receives the Royal assent. What does that mean in practical terms? It means that the authority immediately comes into force. The registrar will shortly have to follow because one of the first tasks of the authority will be to appoint the registrar who when one looks at Part 3 has such a fundamental role in terms of licensing. Almost immediately there will be a need to appoint authority members. Everyone knows that there will be seven of them and they will include a lawyer of not less than 7 years’ experience. It is good that there is a Supplementary Order Paper in the name of the Associate Minister that says that there should be consultation with the Real Estate Institute of New Zealand before those appointments. A large amount of work is required to be done once the authority has been established and the members are appointed if this legislation is going to be ready in 14 months. I can tell the House now that 14 months is not enough time and a lengthier transitional period will be required. 
The next principled point of opposition we have raised from day one is the issue of auctions. I am pleased to see that the Associate Minister has listened to those objections. Extensive submissions were made on this matter at the Justice and Electoral Committee as a result of which clauses 136 to 141 will be deleted. That is good because they are modelled as I said in the Committee stage on sections that come from the Property Stock and Business Agents Act 2002 which is a New South Wales Act. They dealt with a particular situation in New South Wales at a particular time and we heard that at the select committee. They do not serve any useful purpose in New Zealand. The next point we raised was that this bill is unnecessarily bureaucratic. We have referred to the creation of the authority and the problems associated with Part 4 which deals with disciplinary matters. So that remains an issue; it has been an issue from day one. 
Finally there is the issue of the amount of experience required for real estate agents. I thought that Mr Dunne’s proposals in relation to clause 34 were sensible. They are changes that were designed to ensure that those who enter the real estate profession are fit and proper persons because that is in the interests of the public. 
So these were changes. There were not many that required change. Some have been deleted and we are pleased about that but there remain some sticking points and thus there will be continued opposition to this legislation. But what I really find unnecessarily hyperbolic is the suggestion that the National Party is opposed to reform and is opposed to the repeal of the 1976 Act. That is a load of garbage. We are in favour of reform but it has to be proper reform and in four respects this bill is still lacking. That is why we are going to oppose the third reading. 
A party vote  was called for on the question  
That the Real Estate Agents Bill be now read a third time. 
Ayes 65 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 3; Progressive 1. 
Noes 53 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independents: Copeland Field. 
Bill read a third time. 
Affordable Housing: Enabling Territorial Authorities Bill 
Second Reading 
Hon PHIL GOFF (Minister of Defence) 
 on behalf of the  
Minister of Housing 
: I move  
That the Affordable Housing: Enabling Territorial Authorities Bill be now read a second time 
. In doing so I would like to thank the chair of the Local Government and Environment Committee Moana Mackey and members of the committee for their hard work on this bill. I would also like to thank all of those who made submissions on the bill. The committee considered 78 submissions on the original bill and the considerable thought and effort put in by the submitters and the committee have helped to improve the bill. The majority of the committee recommended that the bill be passed with some amendments. 
This bill provides new powers to enable territorial authorities to increase the supply of affordable housing in their area. The bill fits in with other work that the Government has undertaken to improve housing affordability in New Zealand. The way that territorial authorities use the powers in the bill will vary across the country depending on local affordable housing needs. International and New Zealand experience shows that the new tools will be effective in helping territorial authorities to achieve a range of goals such as housing essential workers on modest incomes. 
The bill is enabling rather than mandatory. Only those territorial authorities that want to need to develop an affordable housing policy. The bill requires a territorial authority to carry out a housing needs assessment so that it has a clear picture of housing needs in the area before using the powers provided in the bill. Based on that assessment a territorial authority can develop an affordable housing policy that sets out how it will respond to local housing needs. Territorial authorities must consult their community before adopting any housing policy. 
The bill will prevent the use of covenants on land or property titles where one of a covenant’s purposes is to stop the provision of social or affordable housing. Such covenants unfairly discriminate against some of our most vulnerable people. There was unanimous support for that clause by the select committee which recommended a slight change that will strengthen it. 
As the bill’s policy objective is to provide a workable tool for those territorial authorities that elect to develop affordable housing policies the select committee has endeavoured to ensure that the concerns of local government are reflected in the suggested amendments to the bill. For example the select committee has simplified the requirements of the bill by removing clauses that duplicate provisions of the Local Government Act and also by replacing six separate clauses with one simple clause regarding the process for developing and implementing affordable housing policies. The bill has also been amended to be more closely aligned with the Local Government Act. 
Those territorial authorities that would like further guidance on and assistance in using the powers that will be available under this legislation following its enactment can contact Housing New Zealand Corporation which will arrange for them to receive appropriate advice and information. 
This bill balances the need of the community for affordable housing with developers’ needs for consistent and predictable planning guidelines and with the property rights of individuals. The bill promotes housing choice by ensuring that a range of housing types tenures and costs to meet the needs of moderate-income households are being included in new developments. I commend the bill to the House. 
PHIL HEATLEY (National—Whangarei) 
: 
 The National Party has been under tremendous pressure to vote against this legislation. The pressure has come from builders district councils across the country developers across the country and community organisations involved in housing affordability issues and the provision of affordable housing to first-home buyers and even to those renting. This legislation on the face of it seemed like a good idea 6 or 7 months ago but when questions were asked about the detail it appeared that the legislation would drive property prices for first-home buyers even higher than they are today. It seemed the legislation would not help first-home buyers in the long run at all. 
National Party members were very very concerned particularly when local authorities mainly smaller local authorities across the country told us they are already struggling with their statutory responsibilities. The legislation that has been pouring out of central government in recent years has meant that local authorities have had to go to their ratepayers cap in hand year after year to ask for additional rates in order to deal with the growth in their own bureaucracies. Costs have been imposed on them because of the extra legislation coming out of this place. Local authorities have told us they do not want more legislation that will oblige them to spend ratepayers’ money. They have said that the resources they would need to undertake for example a housing needs assessment are too much in addition to what they already have to do. They have said also there is no proven gain for their local communities. 
This legislation puts another layer of expectation upon councils in their view. It is another expectation that communities will have of them and it is another responsibility that central government has imposed upon them and they do not need more compliance costs. That is what local authorities had to say at the Local Government and Environment Committee and certainly that is what they said to the media. In fact very few local authorities were happy about this legislation. 
Interestingly we know that the genesis of this legislation came from activities undertaken by the Queenstown Lakes District Council. It has an affordable housing programme whereby developers and builders when undertaking a development set aside some of that land and it goes into a land portfolio to be used for affordable housing initiatives. The reason they need that down there of course is that the cost of housing and renting is so high for people on average incomes or those we expect would normally be able to afford housing—people such as nurses policemen teachers and those in the hospitality industry which the Queenstown lakes district relies on so much. At the select committee we asked how without legislation the Queenstown Lakes District Council was able to set up a programme whereby developers set aside an amount of their land to go into such a pool. 
We asked how it was able to do that without legislation because it begs the question of why we need this legislation. Why do we need to legislate to ensure that councils go through these responsibilities and go cap in hand to the ratepayers to pay for these additional compliance costs when the Queenstown Lakes District Council is doing this activity already? The answer from that district council is that it would have preferred to have more clarity and that it was difficult at times to work through its processes but it did it without this legislation—and other councils could as well. 
The interesting thing is that Maryan Street the Minister in charge of the bill said that the bill would drive down costs for first-home buyers. But what this legislation does is force builders and developers to set aside a portion of their land and give it to trusts for affordable housing. So they might have to carve off 10 percent of their land and not sell it but essentially give it to an affordable housing trust. Instead of giving land they could write out a big cheque and put it into the trust and that could be used for affordable housing. 
That sounds great on the face of it and it certainly sounds great for that trust but the problem is that builders and developers then have to somehow make up that loss. They make up that loss by selling the sections they retain at a higher price because quite frankly they have mortgages to pay too. When builders and developers buy land they have to pay interest they have to pay rates and they have to pay for the development of that land and if we take away a portion of that land—particularly if it is as high a value as 10 percent—then clearly they have to get those gains from elsewhere. So on the 90 percent of land they retain they have to make greater profits in order to cover those costs. So the cost for the sections in the other 90 percent goes up and the cost of housing overall will go up. Again we have a problem there. That is why builders and developers oppose this legislation and we can understand why that is the case. So there we have it. Local authorities are objecting to this legislation builders and developers are objecting to it and many of those involved in community housing objected to it at the select committee. 
Members of the select committee were also very interested in another matter raised in this bill. It is certainly associated with housing but not necessarily with the issue of first-home buyers. It is the intention in the legislation to void covenants that restrict the provision of affordable public or institutional housing within a residential development. That was intended to address problems such as we see in Auckland and Housing New Zealand Corporation gave us examples of where developers have put covenants over their developments saying that social housing cannot be placed within that area. For example Housing New Zealand Corporation homes or houses provided by other social housing providers cannot be in those particular developments. 
We could understand why there was an intention in the legislation to do that. We note however that exceptionally large-scale or high-density social housing developments do need local community support in order to succeed. So if we have a development where there are say a hundred or a couple of hundred houses then surely we would want some sort of community consultation where half of them—say fifty or a hundred—are Housing New Zealand Corporation houses. It is not a minor thing. It is a minor thing where we have two three or 10 State houses in a subdivision and covenants surely should not be passed in those cases. But where there are hundreds of State houses in a particular development that is a very significant step indeed and we would want community buy-in and consultation in that case. So although we support the intention in the legislation to void covenants that restrict the provision of affordable housing or public or institutional housing we note that exceptionally large-scale or high-density social housing developments require community support and buy-in in order to succeed and we make that note here in our speeches tonight. 
This legislation does not address the real cost-drivers of housing supply. Meeting residential land needs making sure that enough land zoned is for residential housing beating back over-regulation—particularly where it comes from the Resource Management Act and the Building Act—and streamlining the planning and consent processes are key issues that need to be addressed. It must also be remembered that take-home pay pays the mortgage and the higher taxes that we have seen year on year under this Government do not help the value of take-home pay. People are getting less in their back pocket to service a mortgage. It is take-home pay that counts and only lower taxes will improve the situation and put more money in the back pockets of those who want to pay off their mortgages. Of course interest rates also need to be brought under control and there is no way that that will happen when we continue to see the low-quality spending that this Government has put into various services across the country. 
LESLEY SOPER (Labour) 
: 
 Well it does not surprise me at all that the previous speaker from the National Party Phil Heatley opposes so vehemently the Affordable Housing: Enabling Territorial Authorities Bill. It does not surprise me at all when one considers that any bill with the words “affordable housing” in its title would seem to be anathema to the National Party. It does not surprise me at all to see that the National Party would be opposing a bill that seeks to create more choice and opportunity for families by giving councils some flexibility to promote a wider variety of house sizes ownership models and costs in the new home market. Why does it not surprise me that National which brought in market rentals for State houses sold 13000 State houses and devastated the housing market should come into this House and oppose this very good affordable housing bill? 
It does not surprise me that those members are back to their old tricks of the 1990s once more. What those members do not like is the fact that this bill provides new powers to enable territorial authorities to increase the supply of affordable housing in their local areas and to do the sorts of good things that the Queenstown Lakes District Council has struggled to do. That is another very good thing that territorial authorities will be able to do under this bill and they will be able to take an easier path to do it. The fact is that this bill enables other territorial authorities—without the same problems and in consultation with their community—to require persons doing developments to facilitate the provision of affordable housing to low and moderate income households in a way that encourages that range of housing sizes tenures and costs. 
The bill fits with other work that the Government has undertaken to improve housing affordability in New Zealand and that is why the National Party finds it anathema. Those members do not like the idea that this Government has had successes in that area. When we consider the other initiatives that are under way— 
Sandra Goudie 
: Such as? Name one. 
LESLEY SOPER 
: —such things as the very good and popular shared-equity scheme the work done to start large-scale housing developments that help boost the numbers of affordable housing available and the improvement in the quality standards of houses among other things—we can see that that is why National members find it anathema. They just cannot bear the idea that this is a good Government that cares about affordable housing. The Government sees it as being fundamental to the health and well-being of families and communities that there is decent affordable housing. It actually regards it as a basic human right. And that is what those carping speakers on the other side just do not seem to be able to grasp—that this bill is actually popular and required. 
The fact is that this bill balances the needs of the community for affordable housing with developers’ needs for consistent and predictable planning guidelines and with the property rights of individuals—balance between developers and communities. The National Party cannot take it because that party seems to not want to admit that Labour can actually come up with good balanced legislation that once again delivers to ordinary people. That is what National members do not like—that this party has delivered and keeps on delivering in housing health education and in a range of social issues. That party has never delivered in any of those areas in any of its previous administrations and will have no chance to try to even think about delivering in the future because the people of New Zealand know that if they want good social provision whether it is in housing or in any other area the party they need to have leading the Government is the Labour Party. Thank you Mr Speaker. 
JOHN CARTER (National—Northland) 
: 
 I have to say that it shows how much the Government really believes in this legislation when it gets the Minister who has let the Defence Force run down to an absolute shambles and who allows prisoners out of prisons every day to come down to read a speech on it for about 2 minutes because he would not have a blind clue about this bill. The member Phil Goff would not have one iota of understanding. To make it even worse the Government puts up a lightweight member called Lesley Soper whom they brought into the House and who was then kicked out because she could not get high enough up on the list. The Government has brought her back and she will be kicked out again. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! 
JOHN CARTER 
: It is a day of sadness and shame in this country that we are addressing this sort of legislation in the depths of yesterday if we look at today’s date on the calendar on the wall. It is a shame because we have a member called Winston Peters who has purportedly stood for standards and who has been caught out having to try to explain again. He has also brought into disrepute not Helen Clark because she does not matter but the position of Prime Minister. The Prime Minister also now has to explain and that is a shame. Then the third thing we need to be concerned about is that we are here in urgency discussing this bill. 
I feel really sorry for the likes of Pita Paraone who is a very honourable person. I have great respect for that member. Unfortunately he is caught up in the trap of the Winston saga. 
Here we are tonight debating a third bill. We had the Biofuel Bill which the Government did not really support and then we have just gone through the Real Estate Agents Bill which was all about politics. And now here we are with a bill that is actually meaningless. The unfortunate thing about this legislation is that we are passing a bill that will have no impact other than to put more compliance costs into New Zealand and on to local government and it will not reduce by one diddly-squat the cost of housing to those who need it. 
Let me just explain why that is. The reason is that the Minister of Housing Maryan Street heard about what was happening in Queenstown. She thought that she would go down and look at what they are doing down in Queenstown because it actually works. What happened was that the council had got together with developers—those nasty people who actually make money—and said that it had a problem. The problem was that people who came to that town needed to be able to afford to live there and at that moment they could not. The council suggested that they all get together and give those people an opportunity to be able to afford a home. It suggested that where there was a subdivision and the developers were developing some housing the developers should set aside some funding that would allow those people to get a house that was cheaper than the average home that one might expect to buy in Queenstown. So that is what happened. 
The developers said that it was a good idea. They needed workers. They needed people to come down and help with the surveying they needed people to come down and help build houses. They needed people who are dentists they needed people who are doctors they needed people who are waitresses and they wanted to attract those people to that town. And of course they wanted the well-to-do people to retire there and they wanted to set a standard for them as well. They said that they should get together with the council and allow that to happen and that is exactly what happened. 
The Queenstown Lakes District Council and the developers—those horrible commercial people—all got together and said: “OK here is a good idea. We will make this happen.” Maryan Street heard about this so she whistled down there and said: “By gosh! What a good idea. Why do we not pick this up?”. So the Government forgot what the Queenstown Lakes District Council is doing and it brought in this silly bill that says to local authorities in New Zealand that they must provide affordable housing. 
But what does it mean? Well actually when one reads the bill it means nothing. It means absolutely nothing. All that it says to local authorities is that they shall try to do this. The fact is that every local authority in New Zealand opposes this bill with the exception of none because they know it will have no impact. I tell members opposite to go and talk to the mayor of the Queenstown Lakes District Council. 
Hon Steve Chadwick 
: He worked with the Government on this bill. 
JOHN CARTER 
: Of course he did; he worked to try to make this bill work. If the member will go and talk to him now he will tell her that it is a joke and that this bill will not work. I tell the member to go and ask him because I did. I asked him what he thought about this bill and whether it will work. He said that it was a joke and it will not work that it does not do anything that his council is not doing and that it is providing opportunities for people on lower incomes. 
Of course the sad fact is that the Government has got it wrong. What this Government will not understand is that part of the reason why we struggle in this country to provide affordable housing for low-income people is the compliance costs this Government has imposed on local government bodies which they have to pass on. Let me just talk about that for a minute. 
Lesley Soper 
: Have you read the bill by any chance? 
JOHN CARTER 
: The member can interject as much as she likes but the fact is that the way the Resource Management Act works under this Government—it has to be implemented by local authorities—means that every section subdivided in this country costs $50000 in compliance costs before one even gets started. Right now if one gets a building permit with the Department of Building and Housing which is administered by Shane Jones on top of the $50000 on average that one pays in compliance costs for a section one now has to pay another $25000 per home on average in compliance costs for building and it is nuts. So before one gets a section and house started one has to fork out $75000. 
The second point that has caused a problem and that this Government just will not believe in is not only does it cost $75000 but also people have an expectation that they will have a house valued above what they are able to afford. The fact is that in Northland right now we are starting to design and develop homes—just the house not the section; I will be very clear—working with the likes of Juken Nissho where we will have a modest three-bedroom home that is watertight and comfortable and has all the facilities for the cost of about $110000. We should be starting to provide that sort of thing on top of the cost of a section which is maybe $70000. So one might have a modest three-bedroom home for a first house costing somewhere between $180000 and $200000 and who would argue with doing that? It is a good start for a young couple who maybe have a child on the way or who are just starting out. They can get into a home as a way to step forward. That is what we should be aiming for. 
I really regret the fact that some of the other parties will support this bill because it will not achieve what they seriously want to achieve. I acknowledge that they want to achieve opportunities for young people. This bill will not do it. But the work National is doing in Northland and the work it will do around reducing compliance costs if it is fortunate enough to become the Government will certainly make sure that young people are given the opportunity to get into homes at an affordable level. It is those things that are important not making more rules and regulations and putting more cost on to local government and the ratepayers but allowing young people the opportunity to start at a price they can afford somewhere in the vicinity of $180000 to $200000 without their having to meet the $75000 of compliance costs this Government is imposing on them. 
I for one say that if I had the choice between supporting a Government that says I have to write out a cheque for $75000 before I even start or a party that is saying it will give me the opportunity to get into a first-time home modest though it may be which is a good start and is warm comfortable safe and secure for approximately $200000 without needing rules and regulations—[ 
Interruption 
] I just wish Lesley Soper would for once open her ears but she cannot because she is worried about the fact that she will not be here soon. I wish she would understand what I am saying which is that National is interested in getting young people into homes. I know that the likes of Pita Paraone also support that objective. This bill will not do it. But I do say there is an opportunity for us to make sure that we can and if we are given the opportunity then we will. 
PITA PARAONE (NZ First) 
: 
 Tena koe Mr Assistant Speaker. I stand on behalf of New Zealand First to say that we will support this bill. I start by saying that New Zealand First has always been of the mind that all New Zealanders should have access to affordable homes. Owning one’s home has always been part of the Kiwi dream and we would like that to remain so. Unfortunately the dream has become a nightmare for many people who have come to realise that access to affordable housing which earlier generations of New Zealanders enjoyed is no longer available to them. The fact that we here in New Zealand are at the end of the global economic food chain so to speak has seen the downturn in other economies impact on our own. The New Zealand Institute of Economic Research recently reported in its last quarterly prediction that gross domestic product was likely to decline for three consecutive quarters. It went on to say that inflation is still a problem and would therefore impact on a return to robust economic health. Having said that I believe it is still the Government’s responsibility irrespective of who might be occupying the Treasury benches to ensure that this country’s citizens are suitably housed and that incentives are provided to do this. 
We in New Zealand First believe that this bill will provide that incentive which I regard as being a beginning. House prices have left a large number of people on modest incomes unable to compete in the current housing market. The bill is intended to help provide additional supply-side tools for local government in order to complement the housing supply-and-demand measures that central government already provides. As the Minister who opened the debate this evening said costs vary amongst the territorial authorities around the country and therefore the cost of housing will also vary. 
I heard reference made to Queenstown and the belief that this bill will not solve the problem that Queenstown is possibly facing. However the responsibility does fall on that local authority to ensure that in order to maintain its position as one of the leading tourist centres in the country it must look after its service workers. If it wants to attract service workers to the region and wants them to stay there to be able to cater for the demands that tourism brings to the area then it will certainly have to have a plan that will provide affordable housing for those people. 
New Zealand First recognises that this bill is a stand-alone bill that dovetails with other legislation. The bill’s purpose is to enable territorial authorities in consultation with their communities to require developers to facilitate the provision of affordable housing. We have heard comments this evening that developers are opposing the notion of this bill. I say that given the economic climate at the moment I have heard of developers actually approaching the Government to see whether the Government will purchase sections from them to provide State housing. I think that that is the consequence of being at the end of the economic food chain which I alluded to earlier. 
I do not want to take too much time other than to say that this bill is just one of the many tools that will be available to provide affordable housing to our citizens and I reiterate our support for this bill. Kia ora. 
SUE BRADFORD (Green) 
: 
 The Green Party will be supporting the Affordable Housing: Enabling Territorial Authorities Bill through its second reading and remaining stages in the House today. I have to say however that ours is somewhat lukewarm support. Although we are keen to see local councils encouraged to support the development of affordable housing within their districts and to end the use of covenants designed to restrict the availability of affordable housing within developments we believe that this bill is a missed opportunity in terms of doing something a lot more meaningful. 
We have a housing crisis in this country right now. Just a couple of weeks ago I took part in a hui on housing in Northland at which representatives of numerous iwi and community organisations talked about the realities of increasing numbers of forced mortgagee sales sometimes because of ridiculously low actual arrears. They talked of private rentals being too high for people to afford even in traditionally low-cost areas like Kaitaia and Kaikohe and of people living under canvas and in sheds caravans and other insecure and inadequate forms of shelter because those were their only options. 
This morning the  
New Zealand Herald  
carried the story of Auckland City councillor Paul Goldsmith who is asking Parliament to widen police powers to allow them to forcibly move rough sleepers along. At the same time Diane Robertson from the Auckland City Mission talked about the problem in a rather more productive way saying that the real answer is to give people somewhere adequate and appropriate to live. Both responses highlight the problems of people sleeping out in Auckland City. It is not a new issue but it is one that does not look like going away any time soon unless there is a concerted response from the Government local government and the community sector to ensure that the housing needs of those most in need are met. 
Councillor Goldsmith’s “blame the victim” response is as old as time. It is reminiscent of Beijing’s recent clearance of its streets and slums for the Olympics or closer to home of the bid to remove the homeless from the streets parks and open spaces of Auckland when APEC came to town in 1999. 
The need for safe secure healthy and affordable housing starts at this extreme end with those who are literally homeless and out on the streets right now—and there are many more of them in Aotearoa in 2008 than some might imagine—and it goes through to those who are among the 9000 or 10000 households on the State house waiting lists to those who are living in substandard or inadequate housing but cannot get on the waiting lists at all and to those who are working as hard as they can but are failing to get together the money to buy a home. The inability of so many to afford or to access accommodation either rented or bought is a reality that this and the next Government must face. 
This bill takes a very small step towards at least enabling local territorial authorities to implement and enforce affordable housing policies in new developments where they have the will to do so. It was interesting to see that so many local government submitters had doubts about the bill although I have to say that a lot of these seemed to be driven more by fears of the costs of taking up affordable housing plans rather than by any analysis of the bill’s inadequacies in terms of meeting real housing needs. In the Auckland region for example five out of six councils opposed the bill with only the Waitakere City Council supporting it while taking the position that the bill should go further and make affordable housing compulsory for all districts. 
Other organisations found the bill inadequate too. For example the Salvation Army opposed the bill despite its unquestionable interest in and commitment to affordable housing. It submitted that it saw the bill as lacking in terms of containing any particularly meaningful response to the crisis it deals with daily through its social services arms. Like the Waitakere City Council the Salvation Army sought among other things a requirement that local authorities must give consideration to local housing affordability issues in their planning and policy development. 
The Green Party came very close to opposing the bill as well but in the end we decided that we would continue to support it partly because of some small improvements achieved at the Local Government and Environment Committee and partly because anything that supports and encourages councils to at least consider the development of affordable housing has to be better than nothing. We also see the clause on covenants with the improvement made at the select committee as being critical. Clause 35(1) now states: “A covenant over land is void if one of its purposes is to stop the provision of affordable housing or social housing on the land.” We are keen to ensure that this becomes law as soon as possible. 
However what we would really like to see soon is a major commitment from the Government to real solutions. The Greens like the Waitakere City Council and the Salvation Army would like to see all local councils adopt housing affordability policies along with a greater commitment to land banking and to the retention of any social housing that they already own. We would like the Housing New Zealand Corporation local councils and the community sector to work together to increase the social housing stock available in areas of need that is provided through all three sectors. 
The private market is not able to meet the housing needs of everyone in this country as is all too apparent at present. We believe that both central government and local government have a responsibility to take a lead on these issues. Central government funding should be available to assist local councils to carry out effective planning and to meet social housing needs but this funding should not be available unless they have developed an affordable housing plan in genuine consultation with their local community. I hope that the next time we are discussing an affordable housing bill in this Parliament it will be a lot more serious than the one in front of us today. 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Ten years ago the Hikoi of Hope called on the Government and the community to urgently improve housing for low-income New Zealanders. The Government was advised that if we really want to be seen as a socially just nation we must recognise the link between housing and poverty and act appropriately on the issues in that sector. A decade later does this bill the Affordable Housing: Enabling Territorial Authorities Bill do it? 
Right on cue the social report was released last week and it provided the context with which to understand the importance of secure stable and safe housing. It is not a good-news story. It is a story of haves and have-nots—those who can afford to live well and those who cannot. There is of course the fact that some 15 percent of householders own an investment property and such properties include holiday homes rental properties timeshares and overseas properties. And then there are the others. 
Since the late 1980s the proportion of New Zealand householders spending more than 30 percent of their income on housing has literally hit the roof shooting up from 11 percent in 1988 to a massive 26 percent in 2007. For Maori households the decline in disposable income has become even more severe. The proportions of Maori spending over a third of their disposable income on housing had risen to 29 percent in 2007. 
Affordable housing is a cornerstone of any programme to reduce poverty. Affordable housing is essential to well-being. Without housing stability learning is hindered and opportunities for social and economic participation are seriously compromised. There is a lot at stake then in thinking about the range of mechanisms available to ensure that people on low to moderate incomes are able to access affordable housing. And so we were introduced in the range of submissions and effort put forward into defining exactly what we meant by affordable housing including the specific suggestions of “income-to-housing” cost ratios. 
This of course has long been the view that we know of with regard to the concept of poverty. New Zealand does not have an official poverty line. The arguments have been put forward by Statistics New Zealand—that it is too hard to set the level too hard to take account of geographical variation in living costs too hard to handle short-term periods of low income and too hard to adjust the measure over time. So with no poverty line how do we really know the extent of the poverty gripping our communities? 
The same will now apply to affordable housing. It is kept deliberately broad to enable territorial authorities to develop their own definitions to suit their own housing markets. It is this deliberate flexibility that we in the Maori Party have some qualms about. A little flexibility can be a dangerous thing. The context of this bill in enabling territorial authorities to address problems of housing affordability in their districts is one that essentially rests on the quality of relationships with mana whenua—whanau hapu and iwi. Of course we know that when iwi are perceived as investors the relationships with territorial authorities are suddenly conducted with great haste and respect for all parties involved. 
We were interested that the report of the Local Government and Environment Committee considered the possibility of amendments to the Resource Management Act for affordable housing. The Maori Party supports amendment of the Resource Management Act 1991 and the Local Government Act 2002 to strengthen the recognition and decision-making authority of local hapu and iwi in their region. We believe that that legislation needs amending to provide for appropriate representation of and engagement with mana whenua in decision making in their rohe. Such amendments would provide a more tangible way of spelling out the nature of the relationships sought with tangata whenua. The critical issue that concerns us is how mana whenua are involved in the design and discussions around affordable housing in their districts. 
But other relationships are at risk in this bill such as relationships with the so-called gated communities—relationships between gated communities and those who seek to live in social housing. Sarah Walker has produced an interesting paper that describes the effects of gated communities and their regulation in New Zealand. In that paper she describes the fortified pa of tangata whenua as the earliest example of gated communities. Fortified pa provided a stronghold and a sense of security in the knowledge that there was somewhere safe to run to to return to in times of trouble. It also meant that in the luxury of being separated out from potentially hostile “others” the community was a safe haven where people could be free to be Maori to protect each other to store their food and supplies and to enjoy their cultural activities. 
It is a fascinating context from which to consider the risks of simply importing another different group within the midst of gated communities. Pepper-potting State houses in the midst of say a retirement village is bound to create conflict and uneasy tension unless due attention is paid to relationships. The impact of high-density social housing developments must be comprehensively and carefully negotiated with our local communities if we are to achieve buy-in. 
I want to return to the very basis of the need for social housing. If we continue to accept that market forces will determine price in the supply-and-demand world then the poor will never ever be able to be safely and appropriately housed. The god of the market at whose altar we kneel will determine the sort of life we lead. But we must ask: is this right? Should this be so? High housing costs eat into the limited capacity of low-income households to meet basic needs such as food clothing transport medical care and education. 
We must ensure that the housing market is more efficient and fair. Direct assistance for low-income tenants enables a basic quality-of-living standard to be met. We know that community and social service agencies are seeing the real impact of increased accommodation costs on poverty. So we welcome the initiatives in retrofitting the Housing Innovation Fund and the developments the Minister has shared about renovating State houses and moving them on to land. I was pleased to learn about the efforts made in the Matahi Valley for the people of Tuhoe and the efforts made to ensure that a kuia in Nuhaka was able to enjoy better health and housing at the wonderful age of 92. 
But we must look past isolated examples to really understand the grim reality for so many New Zealanders that makes servicing a mortgage simply out of the realms of possibility. The pressures on people are already too immense to create further stress on households by adding ever-increasing mortgage repayments on to their already stretched budgets. 
We will support this bill though we are greatly concerned that low and moderate income earners should be entitled to benefit from affordable housing—but may not as very few tangata whenua have an income or two incomes of up to $80000. We are also very concerned to explore every possibility for innovation in expanding options for affordable housing. This is more than a matter of bricks and mortar; it is about quality relationships quality locations and quality decisions. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I stand on behalf of United Future to oppose sadly the second reading of the Affordable Housing: Enabling Territorial Authorities Bill. United Future supported this bill going to the Local Government and Environment Committee and we had very high hopes that the Government was making a real effort to address a genuine problem. United Future has gone on record historically as saying it wishes that this 2008 election was being fought around the issue of affordable housing—that both National and Labour would be trying to outdo each other in putting forward to voters some really workable options to increase homeownership for middle and low income New Zealanders. So we are very disappointed to have reached a point where we can no longer support this bill. 
I have to say that I am a little surprised that the Maori Party is supporting the bill. That party has gone on record on numerous occasions in this House in support of people’s property rights. This bill has the ability to seriously breach the rights of property owners and put demands on them in a way that I think is inconsistent with the stands that party has taken on previous issues. 
This bill provides but does not demand that territorial authorities should they wish can develop some affordable housing policy at a local level. It is really clear from the feedback from local government that some territorial authorities are already doing this. They are the ones that have been looking for a little bit of legislative support to continue what they are doing and we acknowledge that. But a whole lot of territorial authorities are currently quite uninterested and they are particularly uninterested in some of the options that are put before us in this bill. 
If a territorial authority chooses to consult as it is required to do first of all and to set up a scheme to offer affordable housing options it is then able to put some quite strong demands on property developers forcing them to make available some of their land for affordable housing. Territorial authorities have always had the option of providing incentives through lower compliance costs and a number of other mechanisms to incentivise those options but what they would get out of this bill if they so choose is the ability to actually impose that type of provision on to a property owner and a property developer. We think that is a very sad option. 
I questioned the Minister and she kindly gave me a briefing because I wanted to try to get my head around how this could play itself out at a local level. I asked the Minister whether the bill in the way it has been written could for instance stop a local council showing preferential treatment to one developer over another making no demands on one property developer—making no requirement that it set aside land for affordable housing—but choosing to put requirements on another developer within its territorial authority. She admitted that yes it was quite possible under this legislation for preferential treatment to be given to developers within a territorial authority. So already we start to see some real flaws that could happen off the back of this bill should it pass in its current form. 
Another concern mentioned in the commentary on the bill as it has been reported back from the select committee is around the adequacy statement because the regulatory impact assessment unit does not consider that this proposal meets the consultation requirements for regulatory impact analysis. Really if there is any strength to this proposal it is that the territorial authority in setting up an affordable housing scheme is required to do some consultation with its constituents. That is a good requirement but some concern is expressed by the regulatory impact assessment unit that it does not believe the provisions as stated in the bill currently are sufficient to mean that the consultation process is done in a way that is helpful. 
I was interested to find out from the Minister why she had chosen to set up a separate bill rather than to amend the Resource Management Act and/or the Local Government Act 2002. Certainly the commentary on the bill gives some reasons around that. Apparently the Local Government Act 2002 could not be used in its present form to require developers to contribute towards affordable housing and territorial authorities obviously wanted the flexibility and the choice as to whether they opted into these provisions in the legislation. So it will depend on where people live in New Zealand and on the priority set by their local authority as to whether this legislation will even have application and provide affordable housing options for them. A huge amount of choice is given to territorial authorities. However once they decide to take advantage of the provisions of this bill then I think a lot of problems could kick in particularly for property developers in a way that United Future feels breach the very principles that we as a party have based ourselves on. 
United Future is committed—along with other parties in this House—in seeing what can be done to improve affordable housing options in New Zealand. Right now in New Zealand we face a housing crisis. It is increasingly difficult for first home owners to get their proverbial foot on that first rung and much more can be done. Most of us bought our first house with Government assistance. Short-term loans were given to kick-start our deposit. The family benefit could be capitalised. Historically there have been a whole lot of helpful mechanisms. 
United Future for instance would like to explore the option of capitalising Working for Families payments. A whole lot of things could have been considered by this Government and we are very disappointed that it has limited itself to hitting property developers rather than putting forward a bill that could have included a whole lot of other really excellent options that we would have been able to support. We are sorry to have to pull our support at this time. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I am absolutely delighted to speak on behalf of National in opposing the Affordable Housing: Enabling Territorial Authorities Bill. This is another piece of very very poor legislation. It follows on from a litany of poor legislation put through the House by this Government. It asked the first question: “What’s the problem we’re trying to fix?” and yes there is a problem around affordable housing. But did it do any rigorous analysis about what the cause of that problem was? Of course it did not because those members opposite are too jolly lazy as a Government to take even one look at the real causes relating to affordable housing. 
SANDRA GOUDIE 
: Let us consider one of the first problems faced which is the resource consent process under the Resource Management Act. Did Government members even take a look at that process? Did they put any effort at all into looking at what it means for anybody wanting to build a subdivision and provide housing for our people? No they did not. Did they even look at the Building Act? Well yes they did and what did they do? They made it worse because when they identify a problem they have absolutely no idea about the rigorous analysis needed to understand the causes of it. That happens time and time again in every piece of legislation. This Government has passed a litany of legislation that is a burden on the people of New Zealand and this is another example. 
What a burden this legislation will be on the people of New Zealand. If Government members think this bill will do one single thing towards achieving affordable housing they are seriously mistaken. We heard the previous speaker say that local authorities will need to have an affordable housing scheme. That is another step in the direction of a bloated bureaucracy; everything this Government does that has an effect on local authorities does nothing but add cost and bureaucracy to them. The local authorities have to find the wherewithal to fund the staff to do the investigation and analysis needed to put in place all of the rubbish—this absolute garbage—put upon them by the current Government. It all comes at a price that local councils have to pay. 
But hold on who funds the local councils? Well it is the ratepayers who have to pay that price and they are sick of it. Time and time again they are burdened with costs imposed by this Government and this bill is another classic example. 
Let us consider affordable housing schemes. For a start local authorities have to draft a scheme. Do they get any funding from the Government for that? No. Once they have drafted a scheme—and spent hundreds of thousands of dollars on staff to do that—they have to go out for public consultation. Hello there is a few more hundred thousand dollars gone. As we heard from previous speakers all sorts of community groups want to put their finger in the pie because they all think they know how best to do things. They all want to put in their 10c worth. They drag the process out just like they do when people put in resource consent applications. Everybody wants a finger in the pie. 
Why do members think that the cost of housing is so great? If they had listened to John Carter they would have heard the answer: it costs at least $50000 for a start. I know of a guy who requested resource consent for eight motel units. Before he even started he was being asked for $150000. That was before he even put a peg in the ground. Why would he bother? This bill will absolutely cripple any initiative that people take or any enthusiasm they have to enter into business or to create businesses in this country so they can improve their wealth their take-home wages and as one of the previous speakers said their ability to afford to pay for housing. There are costs and costs one after another. 
One council has become the first in the country to say that it will take 50 percent of the development contribution on the first building inspection. That is before the developer has even used any of the facilities being charged for. Then the developer will need to pay the rest of that development contribution before he or she can get a certificate of title at the time of the last building inspection. Give me a break! If this Government cannot understand the basic costs of building a house then that is an absolute indictment on its representation of the people of this country. 
If anybody is failing the people of New Zealand it is the members of this Government who do not properly understand the problem and are not addressing the compliance costs. They are doing nothing to reduce the cost to people wanting to build houses. They are doing nothing to reduce the costs to ratepayers. It is no wonder that housing is becoming unaffordable even if one does own a home because rates are going up at the rate of knots just to meet all the costs being imposed by this Government. 
This Government keeps saying that it cares but it puts through more bills because it wants to control things. It does not understand that people in the private sector can work together with public sector entities such as local government and make arrangements that suit them without needing to get tied up in knots by legislation that just adds more costs. Does the Government not understand the simple idea of contracts and agreements? No it does not. It cannot stand not being able to put its finger in the pie and interfere in the process. It cannot leave it alone. Queenstown did it and what did Government members do? They wanted to capture it and make it theirs so they ring-fenced it put a whole lot of words around it and turned it into an utter shambles. That is what this bill is—an utter shambles. It is a disgrace. It just reinforces my already strongly held view that this Government is completely fiscally irresponsible. There is absolutely no way I would want any one of those people managing my household budget. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Could I have a bit of order please the noise is getting too high. 
SANDRA GOUDIE 
: Oh gosh let them go. For goodness’ sake let them go and send them out. 
There is absolutely no way I would let any member of this Government manage my household budget. When we look at the way they are managing the taxpayers’ budget we are absolutely horrified. The number of bureaucrats has grown by 10000 in the last 9 years—do we want our money spent on more bureaucrats? This bill provides for more bureaucrats at the local government level just to deal with the sorts of rules and requirements that the Government is imposing through this legislation. 
Let us look at some of the submissions to the Local Government and Environment Committee. Business New Zealand said that any basic understanding of the economic principle—[ 
Interruption 
] The Government hates business. It is the businesses of New Zealand that give our people jobs so that they have the income to pay for their survival—to buy food pay rent or buy houses. But Government members cannot stand that; they cannot stand the idea that somebody might make a bit of profit while providing income for others. That is a total anathema to them. We can tell by the immediate reaction we heard when I said “Business New Zealand”—shock horror! Well hello newsflash! We actually need businesses in this country so that people have employment. Do Government members not understand that equation? They just do not understand that we have to have business to provide employment. The two go hand in hand. If one does not have a job one cannot afford to own a home. It is simple but it is obviously lost on the current Government. 
So what did Business New Zealand say in its submission? It said: “Any basic understanding of the economic principle of supply and demand would acknowledge that artificially lowering prices leads to reduced supply and or increased costs for other householders as developers seek to cover their costs and make a normal profit. This is borne out by overseas studies…”. Once again I say that this Government has let down the people of New Zealand. If we think that homes are unaffordable now this bill will only make matters worse. This bill is an absolute indictment on the ability of this Government to do anything rational or that actually supports the people of New Zealand. 
A party vote was called for on the question  
That the Affordable Housing: Enabling Territorial Authorities Bill be read a second time. 
Ayes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Bill read a second time. 
In Committee 
Part 1 Meeting housing needs  
PHIL HEATLEY (National—Whangarei) 
: 
 I will raise an interesting matter with the Committee of the whole House on Part 1—that is the interpretation or definitions of various terms used in the bill. The first one up is the most telling. It is the definition of “affordable housing” which means “housing that—(a) is for persons living in households that—(i) have low to moderate income; …”. 
I found it particularly interesting some months ago when I asked the Minister of Housing Maryan Street in the debating chamber during question time whether the definition in this bill of “affordable housing” with regard to people on a low to moderate income was the same definition she used in relation to the affordable housing being built in Hobsonville. Apparently the housing being built in Hobsonville by the Government is called affordable housing. In fact the Government is proposing that several hundred affordable houses be built in Hobsonville. The Minister told us at the Local Government and Environment Committee that those houses will be worth $350000 to $370000. People owning those houses will require an income of $75000 per annum to service their mortgage without paying back any capital cost. 
In other words the Minister of Housing’s definition of someone who is a low to middle income earner is someone who can afford a $370000 house and is on an income of over $70000 a year which is absolutely ludicrous. Low-income people do not earn $75000. In fact those on the average wage in New Zealand earn about $65000 so one could say that low to middle income earners might earn anything up to $65000 yet the Hobsonville houses which are to be provided by this Government will cost $370000 and people will need to be on an income of $75000 to be able to afford them. 
We have a Minister of Housing who is completely out of touch on two levels. The first level relates to what low to middle income earners earn—and we need only go to Statistics New Zealand to discover that it is $65000 a year not $75000 or above. The second level relates to what an affordable house is. 
I can tell the Minister of Housing if she is listening that $370000 for a first home is very very expensive indeed for a low to middle income earner in this country. That is a huge burden to undertake when it comes to a mortgage. So for the definition of “affordable housing” in this bill to state that it is for persons living in households that have low to moderate incomes is an absolute nonsense. The Minister of Housing thinks that those people should be able to afford a $370000 house that would require its owner to be on an income of $75000 a year in order to service the mortgage plus those people will want to eat and drive a car as well. Of course the Minister said at the time that there was actually no connection between the definitions. That might be all very well in legalese but in reality it does not help those who cannot buy their first home. 
That is why we keep bringing this Minister of Housing back to two very important points. The first point is to acknowledge that the most significant thing we can do for first-home buyers is to give them more money in the back pocket to service a mortgage because take-home pay pays the mortgage not gross pay. The next best thing we can do is to get interest rates under control. 
If one has a mortgage of $200000 which is not the average cost of a house but the average mortgage across the country then one is looking at paying $2000 a year to service the mortgage on that house which is about $40 a week. An interest rate of 1 percent interest on an average mortgage equates to $40 a week which is an awful lot of money in some households. 
The CHAIRPERSON (Hon Marian Hobbs) 
: Before I call the next member can I just give a word of warning to members. This is not a second or a third reading. We are talking about Part 1. The last member began to suggest solutions to provide affordable housing which are not in Part 1. 
JOHN CARTER (National—Northland) 
: 
 Thank you for the timely warning Madam Chair. 
The CHAIRPERSON (Hon Marian Hobbs) 
: Good. Before I hear about your mother! 
JOHN CARTER 
: The gate is open but the stock is quiet! I want to specifically address Barbara Stewart Keith Locke and Te Ururoa Flavell—and any of the Labour members who may care to listen—and to talk about clause 6. I do so from the point of view of saying that although the intention of this bill is to provide more affordable housing to low-income people if we look specifically at clause 6 we see that it fails. It fails because all that clause 6 does—and the other clauses—is say that local government bodies will find out whether there is affordable housing in their districts provide a needs assessment etc. What that means is that local government bodies will end up having to employ people to go through the steps of producing the reports required. They will probably come out with a report that says there is not enough affordable housing in their districts. 
That is the nub and the problem of this legislation. The sad fact is that this bill merely provides for local government bodies to write reports. It actually requires local government bodies to go out and make assessments. What it does not do—and what I thought was the intent of the bill—is ensure that we end up with more affordable housing. Nowhere in this bill as members will see if they read it carefully does it say that the end result of the local authorities’ endeavours of their assessments will be that we have more affordable housing. 
I say to the representatives of those three parties here tonight that National members oppose this bill because it is back to front in addressing housing need. The sad and unfortunate fact in this country at the moment is that the expectation of the starting step for house ownership is too high. We would have done better to work with the building industry and with local authorities together to ensure that there are lower-level homes—still of good quality still secure still safe and still watertight—at a lesser cost that people on lower incomes can afford. That is the dilemma we face in this country today. For most people the price of a first home is out of their reach. Yet we have the ability in this country to provide lower-cost homes. I am not saying they are cheap homes; I am not suggesting that for a minute. What I am suggesting is lower-cost homes. 
When the likes of Trevor Mallard and I were starting off in this country as young men we had expectations of stepping into a home that was of a smaller size but still adequate for us to start our families. Unfortunately today all of us have an expectation of being able to step into a more expansive home. Quite honestly we need to change that attitude. We need to accept that a first home can be a small 3-bedroomed home that does not necessarily have all the bells and whistles but is adequate. It can house our children— 
Hon Trevor Mallard 
: Some of them have two bedrooms. 
JOHN CARTER 
: Maybe it has only two bedrooms. The point is that the home does not have to be a great big expansive palace. It can be a first-step house. It can be something we can turn into a home. It might have only two bedrooms one for mum and dad and one for the first child maybe. 
Hon Trevor Mallard 
: I can remember when kids shared bedrooms. 
JOHN CARTER 
: Of course; we all did that. The point I am making is that our expectations are now above the level that we should reasonably expect. 
I say to the members of the smaller parties here and indeed to the Government members that we should have said we will work with local government and we will work with industry and the whole focus will be on ensuring that we have an adequate supply of lower-priced homes of good standard that allow families in New Zealand to get a start. That is where this bill fails. In fact it actually adds to the cost. I say to the Government and I say to this Parliament tonight that what disappoints me about the smaller parties which I know genuinely want affordable housing—as do we—is that their supporting this bill in the manner in which it has been put forward will make it harder for young people to reach that first step. That is most unfortunate and I say that genuinely. This is one of the times in this House when we really need to reflect on what we are doing. We are not achieving what we set out to do as a Parliament. This body has a responsibility to the people of this country and tonight I say that unfortunately rather than achieve what we set out to achieve which is a laudable goal we will push it further out. I say to Parliament that it is sad and unfortunate that we are doing that this evening. Thank you. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I fully concur with my most eminent colleague John Carter. He is absolutely right. He has said the very things that needed to be said about the fact that this Government should have taken a step back and should have done the work necessary so that we would not find ourselves in this very unfortunate position in respect of considering the Affordable Housing: Enabling Territorial Authorities Bill. The first definition in clause 4 covers affordable housing which “means housing that—(a) is for persons living in households that—(i) have low to moderate income; and (ii) have no low or moderate legal or beneficial interests in property; and (b) is priced so that the persons are able to meet—(i) their housing costs; and (ii) their other essential basic living costs; and (c) is within the regulatory criteria for determining what affordable housing is if regulations setting criteria exist”. 
I am blowed if I know what that means and I am sure it is a lot of gobbledegook for most people. But when we look at moderate incomes I am concerned. The average income of the majority of people in my electorate is around $26000 a year. That is the average income for the Coromandel electorate. How could anybody afford to own his or her own home on that level of income? We talk about most people now earning around $60000 a year but coming from the Coromandel I find that very very hard to believe. 
Business is incredibly important in the Coromandel because we need those businesses to provide jobs for the local people and housing is certainly an issue. We have a very limited land resource and we need to use it to the very best of our ability. 
I would like just to pick up on some of the points made by John Carter when talking about affordable housing. He referred to providing housing that can be affordable. If local government and central government are to work together then they need to look at the cost of building a house. They need to look at the cost of purchasing the land in the first instance the cost of building the house and all of the constraints that start to come into play the moment someone takes a step into the council to begin the process. Firstly there is the resource consent cost and secondly there is the building consent cost. The bill has a definition of affordable housing; paragraph (c) of that definition states: “is within the regulatory criteria for determining what affordable housing is”. This Government has not done that. Obviously the expectation is that local authorities will do that and it will place an incredible burden of cost on them because it is not an easy undertaking to start pulling all of that analysis together to determine what affordable housing is. 
In the first instance councils are required to implement legislation passed by the Government like the Resource Management Act and the Building Act. They have to do that regardless of how poorly the legislation has been drafted and how it has not been changed to accommodate some movement in the cost of housing. Councils have to work with that. They do not seem to be able to control the costs incurred by people who want to build houses through that process. That is absolutely where it needs to start. When I talked before about a $150000 development contribution it was $150000 after the costs of about $40000 or $50000 just for the resource consent and the building consent alone. We are looking at some councils charging up to $1000 for building a carport. 
It is going out of control and is becoming a nonsense. The sooner some rationality is put into the process around how resource consents and building consents are dealt with the sooner we might be able to have more affordable housing for people in New Zealand. I wish that some sort of sense could be made within the regulatory criteria as defined in the bill. The purposes clause talks about enabling territorial authorities “in consultation with its community to require persons doing developments …”. But it is done in consultation with its community. People who know anything about what it is like when someone starts to consult the community will know this is just another one of those exercises that adds hundreds of thousands of dollars on to the cost of starting an affordable housing scheme. 
JOHN HAYES (National—Wairarapa) 
: 
 I would like to begin by speaking to clause 3A which states: “This Act binds the Crown.” I feel quite sorry for the Minister in the chair the Hon Trevor Mallard because this legislation is abysmal. It is on a par with the emissions trading scheme legislation. What I am getting at is that the Act binds the Crown but this whole bill is concerned with territorial authorities. When the Minister speaks at some point I will be very interested in his explanation as to why this Act binds the Crown because clearly it does not. I feel very sorry for the Minister because this legislation is terrible. I do hope the Minister is reading Paul Quinn’s column in the  
Hutt News 
 which I see he is engrossed in. 
Hon Trevor Mallard 
: Who? 
JOHN HAYES 
: Paul Quinn. He is the fellow who is standing against the Minister. 
Hon Trevor Mallard 
: Is he? 
JOHN HAYES 
: Yes. 
Clause 4 states: “In this Act unless the context requires another meaning”—brilliant—“affordable housing means housing that—(a) is for persons living in households that—(i) have low to moderate income;”. This would apply to most people in my electorate in the Wairarapa who typically earn $12 to $20 an hour. But what is a moderate income in that context? Next subparagraph (ii) states: “have no low or moderate legal or beneficial interests in property;”. That does not stop someone with property held in a trust from being able to make him or herself eligible for affordable housing. Paragraph (b) of the definition goes on: “is priced so that the persons are able to meet—(i) their housing costs;”. Well that is really wonderful legislation. Why do we need a rule for that? Then paragraph (c) states: “is within the regulatory criteria for determining what affordable housing is if regulations setting criteria exist”. This is appalling drafting; it is appalling legislation. 
Let us turn to clause 5 “Purposes”. It states: “The purposes of this Act are to—(a) enable a territorial authority in consultation with its community to require persons doing developments to facilitate the provision of affordable housing—”. Why do we need legislation to do this? The bill goes on to state in clause 5(a)(i) that it is “for the purpose of meeting a need for it that the authority has identified by doing a housing needs assessment:” That is wonderful! Why do we need central government to waste its time to waste the time of the Local Government and Environment Committee and to waste the time of officials by asking them to come up with legislation that states a territorial authority can do a housing needs assessment. We do not need this legislation to do this; this is wasting the taxpayers’ funds. 
Then the bill states in clause 5(a)(ii) that facilitation of housing must be “in a manner that takes account of the desirability of the community having a variety of housing sizes tenures and costs:” For heaven’s sake! This is the real world; we do not need legislation that says that. Then clause 5(b) states that the purpose of the Act is to “void covenants that have as one of their purposes stopping the provision of affordable housing or social housing.” For goodness’ sake! Who drafted this stuff? This is meaningless arrant nonsense. 
This is exactly the theatre that this Government has created around the emissions trading scheme. It is the theatre of appearing to be doing something for a community. But I say that this legislation will do nothing to deliver an affordable house to anybody in this country. It is unnecessary legislation. Clause 6(1) states: “Territorial authorities that want to find out whether there is enough affordable housing in their districts may do housing needs assessments.” What brilliant law! Who was the wizard who thought of this legislation? It is absolute and utter rubbish and the Government is charging taxpayers to produce this sort of nonsense. 
JACQUI DEAN (National—Otago) 
: 
 I am very pleased to rise to speak on Part 1 of the Affordable Housing: Enabling Territorial Authorities Bill. I start my contribution this evening by saying I am a little puzzled at Madam Chair’s directing my colleague John Carter—I believe—not to move beyond the scope of Part 1 into providing solutions. I think I have correctly picked up her direction. 
The CHAIRPERSON (Hon Marian Hobbs) 
: This debate is consideration in Committee. That can be done in the second or the third reading but not in this debate. 
JACQUI DEAN 
: Thank you Madam Chair. I understood and I thought and I do believe that this bill is about providing solutions to affordable housing and it is in that context that I make my comments. 
I want to make my contribution very local and to put the Committee in the hands of a small local authority such as the Waimate District Council the Mackenzie District Council the Waitaki District Council the Timaru District Council or the Ashburton District Council all councils in my region that may or may not—because this is an enabling bill—decide to take a housing needs assessment on behalf of their community. How will that housing needs assessment be generated? It might be generated from a member of the community or a group within the community that feels very strongly about this matter—and there are members of the community who feel very strongly that there is a need to provide community housing within a certain town or district. 
That is fine. A letter is written to the mayor and councillors requesting that a housing needs assessment take place. What does that mean for the Waimate District Council which has got say one engineer one community services officer and one other officer? There will be a rating officer. Who is going to undertake this work? We can argue—probably quite rightly—that because every council in New Zealand is required to undertake a long-term community council plan then a housing needs assessment can be undertaken alongside with or attached to an annual plan or a long-term community council plan. That is a case that can be argued. But when a council has one engineer one community services officer and one rating officer who also have to deal with the day-to-day business of the Mackenzie District Council or the Waimate District Council and who also have to deal with accreditation under the Building Act which is still exercising many small local authorities not just in my corner of the world but throughout New Zealand who will undertake that study? Who in a small rural local authority has the expertise to undertake a housing needs assessment? 
If we turn to the provisions contained within Part 1 we see that under clause 8 “Method of assessment” subclause (3)(d) provides for a method that gives “a description of the current balance between supply and demand in the housing market generally and if relevant in different sectors:” If say the Waimate District Council is going to do that does it do it just for the Waimate township or does it also do it for the little villages that are spread around the Waimate District? Where does it end? 
I think Part 1’s requirements of small local authorities of which there are many around New Zealand will impose an added amount of work which they may be willing to undertake—this is an enabling bill and if the community wants a council to do an assessment then the council may well be willing to do it—but there is the question of their capability to do it. If they have to bring in consultants to undertake the work who will pay the consultants? The concern I have is not about the willingness of a local authority to do a housing needs assessment; it is about the capability of a local authority to undertake an assessment and the cost that it will impose on the whole of the community. 
Madam Chair I am concerned at your direction to my colleague not to stray into the realm of finding solutions when debating Part 1 because I think Part 1 is very much about the mechanism of finding solutions. I am very concerned that we have two directions here. On the one hand we are not to try to find solutions yet we are debating Part 1 which provides the mechanism for finding solutions through a housing needs assessment. 
I am concerned that a new industry of housing needs assessors will build up in New Zealand. I am concerned that there will be a number of consultancy firms—they are probably writing their job descriptions even now and scoping out the type of work they will be doing. These housing needs assessors—I am sure they will find much flasher descriptions of their jobs than that—will offer themselves to local government to undertake housing needs assessments. 
The concern I have on behalf of the Waimate District Council and the MacKenzie District Council is that although the aim of this bill is to provide affordable housing to people the method does not actually follow through on it. This bill does not in any way achieve what it sets out to achieve. What it does is provide an opportunity for housing needs assessors to find a whole new vehicle for earning some jolly good fees from the ratepayer base of small local authorities. 
The CHAIRPERSON (Hon Marian Hobbs) 
: Before I call Tim Groser I just want to make something very clear to the previous speaker Jacqui Dean who I think misunderstood what I was saying. I was saying that I wanted her to focus on the wording of the bill on the intention in this bill and not to focus on alternatives that are not part of this bill. Speaker’s ruling 104/1 states: “Consideration by the committee of the whole House is the nuts and bolts stage in which a bill is considered [part by part] and detail by detail …”. It is not the wide things. That speaker did actually deal with that. But that was my warning before people take off into the wide blue yonder of housing affordability in general. 
TIM GROSER (National) 
: 
 Had I heard that explanation I possibly would not have risen to take a brief call. I have to be honest: in coming down to the Chamber it was not my intention to take a call on Part 1 of the Affordable Housing: Enabling Territorial Authorities Bill but merely to enrich my parliamentary experience by listening to my National Party colleagues go through this bill with their customary forensic skills and tear the logic and ambiguities of Part 1 apart. 
As members may have noticed I was sitting next to my parliamentary colleague Mr Keith Locke from the Green Party—a man whom I have known for 40 years. We were discussing the strategic outlook for Hezbollah in the Lebanon which is probably not quite part of Part 1. But I was forced to rise to my feet by the very observation that you have just made Madam Chair. I wrote it down as: “Part 1 does not require us to focus on solutions to affordable housing.” I thought that this was very intriguing given that the immediate description of the title of Part 1 is “Meeting housing needs”. I thought that we can afford to say this— 
The CHAIRPERSON (Hon Marian Hobbs) 
: Could the speaker resume his seat. The directions I give are not debatable. I have given a direction; it is not up for debate now. Please focus on Part 1 of the bill. Thank you. 
TIM GROSER 
: Thank you; most certainly. The problem is trying to work out what exactly Part 1 is trying to fix. When I started to read this bill in the House just about 10 minutes ago I found the most childish drafting I think I have seen in my brief time in Parliament. Let me give members an example. Clause 6 states: “Territorial authorities that want to find out whether there is enough affordable housing in their districts …”. This sounds like a third-form essay on the issue. 
Then when we come across other clauses we find bold declaratory statements. For example let me take clause 13 “Criteria for allocation” which states: “An affordable housing policy must state the criteria …”. This sounds bold and decisive but when we look at the operational clauses dealing with the criteria which are contained in clause 10 we then find out that the criteria are a purely illustrative list of criteria that have no particular force whatsoever. It states: “(1) An affordable housing policy must state the criteria …”. It then lists a series of criteria such as “(a) the proposed location of the development:” and “(b) the kind of development proposed …”. But it is quite clear from later parts of Part 1 that this does not exclude the possibility that a local authority may decide on other criteria which makes a nonsense of omitting paragraphs (c) (d) and (e) from clause 10(2). 
The whole bill is a complete artifice. It has no intrinsic content whatsoever. One has to ask oneself why Part 1 is in this bill and what its actual real purpose is. It seems to me—and no doubt we will come to this in a more complete examination of the bill when we start to look at it in total—that this is essentially a political fig leaf. This bill does not actually do anything. It is permissive of a policy that local authorities may in any event already do. It does not add anything to the sum of human knowledge in our country whatsoever. It is simply a political fig leaf for this Government to cover up 9 years of inaction on affordable housing. 
SU’A WILLIAM SIO (Labour) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 67 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Motion agreed to. 
The question was put that the following amendment in the name of the Hon Maryan Street to clause 27 be agreed to: 
to insert in subclause (7) “must” after “the territorial authority”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 67 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Amendment agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 67 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Part 1 as amended agreed to. 
Part 2 Amendments to other enactments 
PHIL HEATLEY (National—Whangarei) 
: 
 Madam Chairperson I am intrigued that as the Chairperson of the Committee of the whole House you required members not to talk about solutions for affordable housing— 
The CHAIRPERSON (Hon Marian Hobbs) 
: Please do not trifle with my ruling or discuss it. 
PHIL HEATLEY 
: I am hoping that in the debate on Part 2 we can canvass solutions regarding affordable housing given that that is to all intents and purposes what the Affordable Housing: Enabling Territorial Authorities Bill is hoping to achieve. I will move through clauses 40 41 and 42 and will address those particular issues with that backdrop—without actually mentioning any solutions. 
I will first convey my concern to the Committee that although clause 40 does not deal with affordable solutions to housing it does make a couple of amendments to the Building Act. In fact it makes three amendments. I have to say that three is too few. I do not know any builder who does not want amendments to the Building Act. Builders across the country will be delighted to see three amendments here. They have another 333 that they would like to introduce and I am a bit disappointed that the Minister of Housing in improving the lot of first-home buyers has not introduced more amendments to the Building Act. It is the Building Act along with the Resource Management Act and a bunch of other Acts that the Government has forced through this Parliament—while ignoring necessary changes—that has driven up house prices for first-home buyers. Clause 40 was a great opportunity to make amendments to the Building Act which is making life very difficult for builders right across the country. 
A builder who has done the hours and has been in the trade for 20 to 25 years cannot move a window 1 foot to the right—30 centimetres for those of us born after the change to the metric system—without trotting off to the local district council with a bunch of plans under his or her arm to explain why it has to be done even though the window does not change the structural strength of the wall. A builder has to down tools go to the council with a bunch of plans submit them wait 5 days for a decision— 
The CHAIRPERSON (Hon Marian Hobbs) 
: Please could you take a seat. I will read to you Speakers’ ruling 44/1 on the question of relevancy: “Because a matter is incidentally mentioned”—namely the name of the bill that is being amended—“in the course of a debate … does not justify discussion on the …” Building Act. 
PHIL HEATLEY 
: I raise a point of order Madam Chairperson. Clause 40 involves amendments to the Building Act and I am speaking about amendments to the Building Act. 
The CHAIRPERSON (Hon Marian Hobbs) 
: You are not speaking about the appropriate amendments to the Building Act—the ones in this bill. 
PHIL HEATLEY 
: Who judges what is appropriate? 
The CHAIRPERSON (Hon Marian Hobbs) 
: It is whether it is written in this bill. 
PHIL HEATLEY 
: I appreciate that members are not allowed to talk about affordable housing solutions in the debate on the Affordable Housing: Enabling Territorial Authorities Bill nor about Building Act amendments when the clause is about Building Act amendments. I will move on to clause 41 dealing with amendments to the Housing Corporation Act. 
I shall remind members of the Committee of clause 35 in Part 1 to which clause 41 “Amendments to the Housing Corporation Act 1974” in Part 2 directly relates. Clause 35 refers to covenants being made void. They are covenants across developments that would otherwise restrict social housing from being provided. For instance a builder with a development of 100 houses might put a covenant across the property to say that no Housing New Zealand Corporation houses may be built there and none of the houses may be sold to Housing New Zealand Corporation. Certainly National as we said earlier supported the intent of the legislation to make such covenants void but we did mention that there is no doubt that when Housing New Zealand Corporation purchases 100 houses in a subdivision of 200 houses that is of huge interest to the local community and it ought to be consulted on and considered. So although National supports the idea of voiding such covenants we do make that point. A case in point is the Hobsonville subdivision where 400 to 800 State houses are being built. The local community is very upset about that. There has been no consultation at all and it has caused a lot of angst in the local community. 
I now move to clause 42 which does not address issues to do with the Building Act and does not address issues to do with affordable housing solutions. It is well worth canvassing because it deals with amendments to the Local Government Act 2002. This clause does not deal with development levies. Development levies are charges to builders and developers that in some cases are spread across property developments throughout the country driving up the cost of properties and driving up the cost to first-home buyers of building houses because in the end they pay the development levy through the added cost on to their homes. That is not what this clause is about. This clause is not about the Local Government Act driving up the costs of first-home buyers. This clause is about an amendment to section 102(5) of the Local Government Act by adding the following paragraph which is a fascinating paragraph indeed: “(c) an affordable housing policy under the Affordable Housing: Enabling Territorial Authorities Act 2007.” It has no mention of development levies or anything like that; there is just that mention of that amendment. 
JACQUI DEAN (National—Otago) 
: 
 Earlier in this debate I made a note to myself on the Order Paper—as members do—in response to one of your rulings Madam Chairperson. The note said that I thought this Affordable Housing: Enabling Territorial Authorities Bill was about providing solutions. I thought Part 2 was about making amendments to other enactments that enhance and underpin the aim of this bill which is to make housing more affordable for people. 
Phil Heatley 
: Don’t talk about that. 
JACQUI DEAN 
: You see I made a note to myself earlier on in this debate during the debate on Part 1. As I think about things I like to note them down in case I get an opportunity to speak again. My note was that I thought this bill was about providing solutions. But apparently we are not supposed to talk about that so I will move on to Part 2 “Amendments to other enactments” and to the amendments to the Building Act 2004. 
I started my contribution to the Committee stage by keeping it local so I will go local again and I will go back to the Waimate District Council and its grappling with the Building Act. I had a letter from the chief executive of the Waimate District Council Tony Alden outlining the compliance costs that his small rural local authority has to meet in terms of audits long-term council community plans and most specifically compliance with the Building Act 2004. The Waimate District Council if it decides—because this is an enabling bill and is about providing solutions—to undertake a housing needs assessment will have to apply the consequential amendments to the Local Government Act 2002 and the Building Act 2004 but that will be at a cost and at a time when councils like Waimate’s are grappling with accreditation and coping with the poaching of their planners and engineers by larger authorities. The Government has created a trade in planners because of the Building Act. There is not only a shortage of planners but a trade in planners. Small rural local authorities are the very ones that are least able to cope with the requirements of this so-called enabling bill which has the so-called purpose of providing solutions. National can see only problems and costs with this bill. 
The amendments to the Building Act will not just happen by themselves. The Waimate District Council if it decides to undertake a housing needs assessment will require a great deal of work from its one planner—if it has a planner. I do not whether it does at the moment because sometimes in small authorities those positions remain vacant for a time and they have to bring in consultants. That is life! The Government’s changes in the Building Act have created a market for planners and engineers and the small local authorities are the ones that miss out. So my Waimate District Council will struggle with these amendments to Building Act 2004 should the council decide to have an assessment—because this is an enabling bill with the aim of providing solutions which apparently we are not to talk about but they are there none the less apparently. It will struggle with these amendments to the Housing Corporation Act 1974 and these amendments to Local Government Act 2002. This bill will come at a cost to the ratepayer. 
JOHN CARTER (National—Northland) 
: 
 Allow me to beaver away to see whether I can stay within the rules that you have set Madam Chair. 
The CHAIRPERSON (Hon Marian Hobbs) 
: The rules have been set by the House. 
JOHN CARTER 
: Of course they have Madam Chair and I will do my very best to comply with them. 
I want to talk to clause 42 “Amendment to Local Government Act 2002” and draw to the Committee’s attention that subclause (2) amends schedule 10 by inserting new clause 7A which states: “Affordable housing policy—A long-term council community plan must contain a summary of the local authority’s affordable housing policy if …”. I want to talk about that word “if”. 
Sandra Goudie 
: “Eff”? 
JOHN CARTER 
: Call it what you like. However it is pronounced that is the word I want to focus on. That word is the nub of this whole bill. We are here tonight talking about something that may never happen. This bill and particularly this subclause says to local government: “If you want to then go ahead and do it if you think it’s important and if you think it’s necessary. If you don’t want to do it then it does not matter.” Councils do not have to focus on it or talk about it or put it into their long-term council community plan—only if they want to make the comment. That word “if” is the nub of this whole debate. 
John Hayes 
: “Eff”? 
JOHN CARTER 
: The Committee should be talking about this word “if”—or “eff” or however one wants to say it. To me that one little word makes that clause meaningless. Local government up and down this country is saying to this Parliament and said so in its submissions: “Not interested thank you very much. We aren’t interested because we can’t do what this bill asks us to do.” When the bill says “if you want to” we have had a response from local government right across this nation saying “Nope.”— 
Hon Member 
: “Eff”? 
JOHN CARTER 
: —with rare exceptions; there were one or two. No we are not saying “eff off” but the fact is local government has rejected it. We have to ask ourselves why if we put a bill out before local government and they come back to the select committee and say “No we don’t want to be involved and if you give us the option of not being involved then we’re not going to.” this Parliament would ignore that advice from local government. There does not seem to be any sense in it. 
The problem that local government authorities have up and down this country is that they are met with increasing costs. We are going through another ratepayers’ revolt and one of the issues that local government authorities raised with us is that if this bill gets imposed on them and if they have to follow it and undertake to do the work then that will add more costs to their ratepayers. They were asking collectively why they should have to be responsible for social housing. They said they think it is a Government responsibility generally. Certainly that was the view of the smaller local authorities. They say that if they have the option then they do not want to have to be responsible thank you very much. They say they will not put this sort of thing in their long-term council community plans. 
I say that is the tragedy of what we are debating tonight. Some people will be listening to the debate on their crystal sets thinking that this Parliament is going to address the issue of affordable housing and their expectations will be raised. Unfortunately they will turn to their local authority and ask whether it is going to do that. The local authority will say: “Nope the Government said ‘if’ we want to and we are not going to. We are not interested. You’re not going to get it.” What a shame! 
JOHN HAYES (National—Wairarapa) 
: 
 I wish to continue the theme in the speech made by my colleague John Carter but first of all I turn to clause 40 “Amendments to Building Act 2004” and pick up on the theme in the speech made by my colleague Phil Heatley our housing spokesman. I support his comments that it is really unfortunate that this legislation does not provide for greater amendments to the Building Act. 
Clause 40(2) amends section 49(2)(b) of the Building Act by adding the word “and”. Subclause (3) amends section 49(2) by adding paragraph (c): “if section 28 of the Affordable Housing: Enabling Territorial Authorities Act 2007 applies”—if it applies—“notification under section 28(6) of that Act.” 
I think that a number of other amendments could have been made to the Building Act to help us secure more affordable housing. We could for example have amended the Act to reduce the cost of building permit charges applied by territorial authorities. You see what seems to be happening amongst my five district councils in the Wairarapa electorate is that they are being asked to cover their backsides with such a lot of— 
Hon Member 
: Bumf. 
JOHN HAYES 
: —bumf that they are having to make huge charges and are requiring vast amounts of information that are not necessary for the task of building things. So I feel that this legislation could amend the Building Act in order to reduce the cost of permits by requiring less information. 
Secondly I feel that the legislation could amend the Building Act to reduce the cost of resource consents. In the last year for example the South Wairarapa District Council in my electorate found fit to charge a constituent in Greytown where I live $900 for a resource consent to build a hen house that would take five hens—$900 for a hen house to accommodate five hens. I think members would agree with me that these sorts of charges unnecessarily add to housing construction costs. 
The next area where we could ask for an amendment relates to clause 40. The amendment would require that there be less responsibility on the part of councils to collect 20-page and 30-page sets of plans for very simple dwellings. If we are to build affordable housing we need such an amendment. The planning framework at present requires far too much on the part of builders. I am told that the cost of applying for a building permit in my electorate from any of the five councils begins at $7000 per house. 
I move on to clause 40A “Amendments to Goods and Services Tax Act 1985” and I pass on the thoughts of many of my constituents that this Act could be amended in such a way as to remove the cost of GST from the purchase of first homes. I am doing that on behalf of my constituents not on behalf of the National Party or myself. The idea has been suggested to me by constituents and it could be addressed by an amendment to clause 40A if the Government were serious about reducing the cost of housing. 
If we look at clause 41 “Amendments to Housing Corporation Act 1974” we see that again we are not being asked to make any significant amendments at this point in the legislation except for subclause (3) which amends section 3B of the Act by adding new paragraph (c) which states: “to arrange for territorial authorities applying the Affordable Housing: Enabling Territorial Authorities Act 2007 to receive appropriate advice and information of a policy or other nature about housing and services related to housing.” 
This legislation is totally unnecessary. That clause delivers absolutely nothing to the people of my electorate. It will make no difference whatsoever to the cost of their housing except that it will add to construction costs. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I would like to follow on from my most eminent colleague John Carter who spoke about clause 42 “Amendments to Local Government Act 2002” and particularly about new clause 7A “Affordable housing policy” which is to be inserted in schedule 10 of that Act by clause 42. This is Mr Carter’s famous “if clause” and it states: “A long-term council community plan must contain a summary of the local authority’s affordable housing policy if it has adopted one under the Affordable Housing: Enabling Territorial Authorities Act 2007.” 
What I understand that to mean is that there is no way that a council could actually consult on an affordable housing scheme in conjunction with a long-term council community plan. It would have to run a separate process in time to catch the process of a long-term council community plan if it wants to include a summary of the affordable housing scheme within the long-term council community plan. So in actual fact it will have to either wait for another 3 years before it can do its long-term council community plan or run it in a pretty condensed time frame through a consultative process with its community to try to get it in the next round of a long-term council community plan. 
So in spite of the comment made earlier by a speaker I do not see that there is any way that an affordable housing scheme could go through a consultative process in tandem with a long-term council community plan. That just adds another cost because the council would not have that advantage. If it wants a summary then it will have to do all that work beforehand and it will not be able to run it concurrently. So there we have that separate cost of consultation and of course the hundreds of thousands of dollars that go with that. Councils have already said that there are 60-plus pieces of legislation that already add about 6 percent to the rates bill as it is. 
Further in speaking to Part 2 I am looking at the commentary on the bill with regard to the amendments to the Goods and Services Tax Act 1985. As my learned colleague John Hayes mentioned there was a recommendation for the inclusion of new clause 40A which would make consequential changes to that Act. There are two main effects of the recommended amendments. The commentary states: “Under new clause 40A(2) when a person undertaking a development made an affordable housing contribution payable to the territorial authority the authority would be deemed to supply goods and services to the developer. Under 40A(3) when a contribution from a person doing a development was in the form of land both sides of the arrangement would be charged at a rate of zero percent.” The commentary goes on to state: “These amendments should”—not “will” but “should”; ever hopeful—“reduce compliance costs for all parties.” 
Well it quite patently will not. It will not do anything in terms of reducing compliance costs. If we look at what compliance costs are we see that they are the costs of applying for a resource consent and the process that one has to go through to do that and hopefully the consent process is not challenged. That is a compliance cost. Then the cost of building consents for actually putting any housing on the subdivision if that is what one is doing is a compliance cost. So I do not see that having a GST rate of zero percent will do very much at all because a person is already incurring all those other costs and they are not being changed in any way shape or form. 
I refer to the comments made earlier by my learned colleague Phil Heatley who talked about development contributions which are another compliance cost that will not be addressed by this bill. 
Phil Heatley 
: They listen to me! 
SANDRA GOUDIE 
: Oh we absolutely do listen. You know the tragedy of it is that those members on the Government benches are not listening because they do not understand this stuff. They cannot get their heads around the simple cost of doing business because all they can see is the profit line and they hate that. Businesses making a profit is an anathema to them. So we are looking at amendments that “should” reduce compliance costs and at the word “if” which John Carter was fixated about in clause 42 “Amendments to Local Government Act 2002”. 
CHRIS TREMAIN (National—Napier) 
: 
 I rise to speak to Part 2 of the Affordable Housing: Enabling Territorial Authorities Bill and to address specifically the amendments being made to the Local Government Act 2002 in clause 42. This clause amends the Local Government Act and I will tell those people who are listening out there to this debate what it does. Clause 7A “Affordable housing policy” which is to be inserted in schedule 10 of that Act by clause 42 states: “A long-term council community plan must [now] contain a summary of the local authority’s affordable housing policy if it has adopted one under the Affordable Housing: Enabling Territorial Authorities Act 2007.” 
Government is about providing leadership and about providing the tools to achieve certain goals in that leadership. Clearly the leadership that we are trying to achieve here is to provide and increase the supply of affordable housing. I am guessing that the aim of inserting clause 7A is to help achieve that goal. I have some questions for the Minister in that regard. I ask the Minister in the chair the Hon Maryan Street how many councils indicated to us in their submissions that they will be looking to include a piece on affordable housing policy in their long-term council community plan. 
Jacqui Dean 
: How many? None. 
CHRIS TREMAIN 
: None. So here we are introducing legislation with the aim of increasing the supply of affordable housing by introducing a clause into Part 2 of this legislation and changing the amendments to the Local Government Act and taking up Parliament’s time to do something that will not achieve the goal that we set out to do. So I ask the Minister a second question. Did we do any analysis of the cost to local councils of doing an affordable housing policy? 
Phil Heatley 
: No but Local Government New Zealand did. 
CHRIS TREMAIN 
: Did it? And what was the cost there? 
Phil Heatley 
: It blew out in the case of most council’s plans. 
CHRIS TREMAIN 
: OK. I have another question for the Minister in relation to this long-term council community plan policy. If a council already has affordable housing within its boundaries—as the Napier City Council does—but does not intend to expand its affordable housing will it now have to include a piece in its long-term council community plan about how it manages that affordable housing? That is an interesting question. And I ask the Minister this: in doing this legislation in the analysis—in the projections that have been done for the cost of implementing this legislation—how many affordable houses are proposed by local governments around New Zealand? Were there indications from those who submitted that they would be going down the track? Maybe there were 150 in Auckland or 60 in Taranaki? I have another question for the Minister in regard to the long-term council community plan and the analysis that was done. How many families will benefit from this? 
The point I make—and I will finish on this—is that Government is about leadership. Yes there is a problem in this country about affordable housing and we have gone through this legislation with the aim of doing something to improve the lot of people by providing affordable housing. But the clear fact is that there are very few if any local governments that will actually do anything about the amendment that we are proposing to the Local Government Act 2002. They will do nothing. This is a complete waste of time. Thank you. 
Hon RUTH DYSON (Minister for Social Development and Employment) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 67 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Motion agreed to. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 67 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Part 2 agreed to. 
Clauses 1 and 2 
PHIL HEATLEY (National—Whangarei) 
: 
 Thank you Madam Chair. You have treated me with an even hand I very much appreciate that. I am delighted to take the opportunity to speak about solutions to unaffordable housing having been restricted in doing so—for a very good reason—to this point. 
I have been very surprised that the Minister in the chair Maryan Street has not made a single contribution this evening and I query that. She came to Parliament and has been upheld as a politician with a purpose and I certainly respect that but she has brought two pieces of legislation to this House. In the first one she wanted landlords to pay the cost of damage caused by tenants’ guests even though landlords have no control over whether tenants invite guests into the property and if they do over who the guests are when they come and what they do. She also wanted landlords to pay for accidental damage caused by tenants even though there is no way of proving whether the tenants did the damage accidentally or deliberately or of establishing what happened. This Minister brought that legislation to the House but it did not get the support of this very wise Parliament. Now she brings this Affordable Housing: Enabling Territorial Authorities Bill into the debating chamber and we have not heard a squeak out of her. I want to know why that is the case. Is she ashamed of the legislation? Has she read the legislation? Does she understand what this legislation does not do? 
I put it to the Committee this evening that this bill rather than giving the opportunity for first-home buyers to get affordable housing when they are under financial pressure or cannot get a deposit together to do so is about ifs buts and maybes. It essentially says that councils may—they do not have to but they could do so if they want to—provide affordable housing in their districts. If they do decide that they want to provide it they have to do an affordable housing study. That involves councils possibly going to various community groups depending on what they want to do or whom they may like talk to and putting together an affordable housing plan. Then if they decide that yes it is worth going forward or that maybe it is not worth going forward or that perhaps it may be worth taking a bit of a punt they may or may not require developers to set aside 10 percent of their land and put it in a land bank for affordable housing. 
But councils may decide they do not want to do that. They may decide get developers instead—perhaps—to write out a cheque in lieu of the land and put the cheque into a trust for affordable housing. Or—perhaps—councils may change their minds and decide that rather than doing that an alternative could be to get the developer or builder to build affordable houses in lieu of providing land or cash and put them into a trust for first-home buyers. Of course that ignores the fact that builders or developers if they set aside land or pay cash in lieu or—perhaps—build affordable houses themselves will take a financial hit and will therefore have to regain the profit or income they have lost because of those additional costs. That will mean putting up the prices of all the other houses in the development. Ninety percent of the buyers will pay more for their houses so that the costs are lower for those who may or may not get the opportunity to buy an affordable home if a council does or does not decide to have an affordable housing policy. 
That is the kind of policy that may be enacted tonight and if this legislation is enacted councils may or may not choose to use its provisions. If they do developers may or may not set aside land or provide cash in lieu or build houses themselves. Builders may or may not choose to do that if a council decides that it will or will not have an affordable housing policy. 
The interesting thing in all this sort of “perhaps-ness” is that councils have this wonderful opportunity—and there are two of them in this country that may or may not forge forward and take up the provisions of this legislation. 
Hon Member 
: Who are they? 
PHIL HEATLEY 
: I do not remember their names but I do remember that there are over 72 district councils across this country and two of them have said clearly to the Local Government and Environment Committee and have written to me and said clearly that they will definitely maybe take up this offer and are delighted to have this opportunity. That is good news for first-home buyers! 
National on the other hand says we definitely will give people tax relief so they will have more money in their back pocket because we understand that take-home pay is what pays a mortgage. National has said we will get interest rates under control because we know that even a 1 percent interest rate cut on an average mortgage is worth about $40 extra a week let alone a 2 percent interest rate drop which would mean about an extra $80 could go towards a mortgage so there is no housing pressure. On the one hand we have something that is in the ether and could happen. Some councils might take up the provisions of this legislation; if they do it is good luck to them and if they change their minds well that would be like a lot of things promoted in it. On the one hand there is whole lot of uncertainty and on the other hand the National Party leader is saying take-home pay matters and interest rates matter and those are the things we would address first. 
First-home buyers those who are looking for a home are under pressure. We know that property prices across the country have stabilised recently and have in fact dropped in many parts of the country. But they are still at a point well above what most young people can afford. That is also true for elderly people who would like to own their own home in their retirement. What is the Minister going to do about that? I do not know. She may speak tonight. She may not speak tonight. She may change her mind after the debate has closed and discover that it is all too late. I do not know what the Minister thinks and I wish she would take a call this evening. At least John Key says National will address the things that matter—the things that will affect all New Zealanders whether they want to buy a house or have bought a house and whether they are young or elderly. John Key will address the issues that matter and those are ensuring that take-home pay can service a mortgage and getting interest rates under control. 
Of course there is a bunch of other policies that we will be supporting but we cannot support this legislation. We actually do not know what use it will be. We do know that it could force up the property price of every other house on a subdivision if a council does take up the provisions of this legislation. We do know that councils right across the country have opposed this legislation because they feel that it will add more costs to their own bureaucracy and therefore to their ratepayer base. We do know that many many community housing organisations across the country are opposed to this legislation as well for a variety of reasons. But we do not know whether if this legislation does pass tonight any council will take up its provisions and any first-home buyer will get any benefit from that. 
In my earlier speech I did point out one thing which is that the genesis of this legislation actually came from the Queenstown Lakes District Council which does this voluntarily. Developers and builders there voluntarily set aside some land or cash or cheap buildings so that they can house nurses teachers police and hospitality workers for example who would otherwise find it very difficult to afford housing in Queenstown. Affordable housing is provided on a voluntary basis down there and that works very very well but the Labour Government feels it needs to legislate. Why does it need to legislate if Queenstown Lakes District Council is doing it already? That is a question that the Minister could answer. Why legislate when a council is doing this already on a voluntary basis in order to address a particular problem in a particular community in our country? Why legislate and why does the legislation give councils so many choices that it means affordable housing may or may not happen? Why legislate on something that is already able to happen under the current law? At the moment we have a situation where as I said Queenstown Lakes District Council can provide affordable housing already. 
I had an interesting email during the course of the debate which I would like to read to the Minister. This is from a builder somewhere in New Zealand. He was quite fascinated by the speeches that have been coming forth from this Chamber this evening. I hasten to add that the only party whose members are making any speeches is the National Party. However this is what this great New Zealander said: “Labour members do not want to acknowledge or choose to ignore that if you force developers and builders to provide low-cost sites it will only force the price of other sites higher thus reducing the affordability for other buyers. If you force builders to provide low-cost sections it will only force the price of other sections up thus reducing the affordability for other buyers.” Well I could not put the situation more succinctly than that. That is the problem. Essentially if district councils take up the opportunities available under this legislation—they may choose not to but if they decide to go forward after perhaps doing some consultation with the local community—in fact that may end up driving up house prices in a district rather than giving opportunities to first-home buyers in that district. 
This bill is one of a number of initiatives that appear to have turned to custard when this Government talks about affordable housing. Members will recall the discussions about Hobsonville. This bill came out at the same time as an announcement that about 450 sections in Hobsonville would be available for first-home buyers. Those sections and houses will cost $350000 to $370000. People will require a household income of $70000 to $75000 in order to be able to purchase one. I remember asking the Minister Maryan Street in the debating chamber one day whether she thought that low to middle-income earners would be able to afford one of her so-called cheap homes in Hobsonville if the home costs $350000 and it would require a household income of $75000 to service the mortgage buy food fill up one’s petrol tank and buy a block of cheese. She said of course low-income and middle-income earners would be moving into the houses at Hobsonville. I argued that low to middle-income earners do not earn $75000 per annum and that is where the debate was left. 
Perhaps the Minister could take a call and address that particular issue because I am still intrigued as to whether she considers that a low-income earner does earn over $70000 a year. My understanding is that low-income households earn nothing like $70000 or $75000 a year and low to middle-income earners cannot afford to buy $350000 houses even if the Minister puts a sign on the house saying it is a good cheap deal. Even if the Minister does put a sign on a house saying it costs $350000 it is cheap and it is a good deal I tell the Minister that most New Zealanders will not accept that. They do not believe that. That is far out of reach for them. 
So the Minister has a lot to answer for with regard to this legislation. She can tell us first of all why so many councils opposed it and why so few are supportive of it. She can tell us why it is voluntary. How is the Queenstown Lakes District Council able to provide affordable housing already? Why do we need legislation if that is in fact the case—or is she saying that council is breaking the law? And what is the answer to those builders out there who say as this gentleman—or woman—so aptly put it: “If you force builders to provide low-cost sections it will only force the price of other sections up thus reducing the affordability for other buyers.”? What is the answer to that builder? I would have thought that what that builder says is in fact the case. Perhaps the Minister in the chair Maryan Street can answer those questions. 
Hon MARYAN STREET (Minister of Housing) 
: 
 I rise to take a short call simply because of the inanity that we have been hearing from members on the other side of the Chamber which clearly shows that an understanding of the really significant issues around affordable housing seems to elude the Opposition members. John Carter said earlier that the significant word in this bill was “if”. He is absolutely right. The Affordable Housing: Enabling Territorial Authorities Bill is voluntary; it is voluntary for territorial local authorities. If it is not to be voluntary then I would ask Mr Carter what the alternatives are. If it is not to be voluntary then would the National prefer that it be compulsory? That is one of the options. The National Party says it would not like to make the legislation compulsory and certainly we do not wish to make it compulsory because we know the territorial authorities do not want that. 
What other choices are available? If National does not want this legislation to be mandatory and does not want it to be voluntary the third choice is to do nothing. And that is what I hear coming from the Opposition in every discussion about affordable housing. I hear it say we should do nothing about affordable housing. I hear the Opposition say we should do nothing about the people who by now ought to be in a position to be able to afford their first house except that in the last 5 years the price of houses in the market has escalated by some 80 percent—80 percent. So a number of measures are required in order to make sure first-home buyers once again have a chance to get into the housing market. One of the options that has been put up is this bill. It is a voluntary bill; it does not mean that territorial authorities have to go into anything. 
But I can give members a very good example back—[ 
Interruption 
] It is clear those members are not interested in answers. Mr Heatley asked a moment ago about whether this bill was relevant to the Queenstown Lakes District Council which was in fact in the process of putting out affordable houses anyway. Well I just draw that member’s attention to some current affairs that I would have thought one of his colleagues the member for that area could tell him about. However she has not done so. The fact is that the Queenstown Lakes District Council is currently being taken to court by a developer for trying to do this kind of thing without having the legislative backing to be able to do it. Now let us hear some of the responses on that. Let us hear some of the ignorant comments that have come out from the Opposition be tempered with a little fact. This bill is needed because local authorities are actually being taken to court by developers for trying to provide affordable housing within residential developments. 
In the brief time I have left available to me I will give members a couple of other examples. I understand that Tasman District Council has recently voted against putting together an affordable housing plan which it had voluntarily decided to put up to its council members. It has chosen to vote against that. Right next door I understand the Nelson City Council has put aside $40000 because it wishes to put a plan together. It is allocating some funding in order to put an affordable housing plan together. I would suggest that the Nelson City Council is likely to benefit from having an affordable housing plan to the detriment of Tasman District Council right next door which may choose not to have such a plan. 
If councils have that opportunity and that choice then where is the Opposition’s problem? I will tell the Committee what the problem is: we need more affordable housing in this country. And one of the things needed in order for that to happen is this bill. Tax cuts will not do it. The tax cuts proposed by the National Party will be eaten up by Maurice Williamson’s tolls on roading every week. 
DAVID BENNETT (National—Hamilton East) 
: 
 When we hear that weak Minister in the chair the Hon Maryan Street talking about doing nothing we can look at this legislation and see that the Labour Government has taken 9 years to put forward legislation on affordable housing. It has taken 9 years at a time when New Zealanders have had a housing market they have not been able to be in. They have not had the opportunity to buy the Kiwi dream to set up a family home for their children and to partake in the capital gains that they would get as members of the home-owning community and this Minister puts forward this legislation in the last week of a dying Government. Well that is simply not good enough. If the Minister wanted to help those people and if she wanted to provide affordable housing then she should have done it a long time ago. If she had done it a long time ago the Government would have worked out what actually makes the difference in affordable housing. 
The Government does not understand the difference between income and equity. The Government of the day believes that if it gives equity advances it will assist people into housing. Well the reality is that the biggest thing dictating whether people can get a loan and therefore whether they can get a house is the income ability of the individual or the family. The ability to service a debt is the key ingredient in getting a loan. People can go and borrow 100 percent from a bank if they want to but the Government of the day believes it is about the equity people put into the purchase of a house not their income-earning ability and their ability to repay the loan and pay the interest on their debt. 
That is the difference between National and Labour. The National Party understands business. We understand that if one has income in the hand then as a member of the community with that income one can go out and buy a house. If a person is just given capital commitments then to a large extent it will not make any difference to his or her ability to purchase a home in the current environment. 
When we look at the current environment we see that the Labour Government has done one thing to make housing affordable in New Zealand—it has destroyed this economy. It has absolutely and criminally destroyed this economy to make sure that we are in recession at a time when we should be growing. With that recession the housing market has declined and it is making houses affordable through its economic mismanagement of the New Zealand economy. That is the reality of what is going on out there. 
But the great thing about that from Labour’s point of view is that the Government is also taxing those hard-working New Zealanders who need some income in their hands to take advantage of the lower market. And what is the Government doing? The Government taxes individuals and families meaning that they cannot go out there and purchase properties because all their money is going towards paying for the Government’s promises at election time—promises brought in to try to win election after election. 
Government members do not care about affordable housing. They do not care about New Zealanders getting in there and buying their first home. They do not care about families having an asset that they can all treasure and build upon. All they care about is promises that they can go out to an election campaign with—false promises based on equity and not the income ability of an individual or family. 
That is the point of difference between the parties and that is why New Zealanders are struggling to get into homeownership. The answer to that problem is to have a strong economy and only National will deliver that. If we have a strong economy then we can deliver strong and successful wage increases and that gives individuals and families the ability to go out and purchase properties. Without a strong economy individuals and families do not have that ability to purchase. They stagnate just like their country is stagnating under this Government and the people of New Zealand find that they cannot access homeownership. 
Affordable homeownership is more about how one runs an economy than about how one actually dictates the rules of the game. It is about how one gives New Zealanders who want to purchase their own home a chance to go out and do it themselves. That is the real nub of making housing affordable in this country as it is in any other country. The Government will not though the whim of a piece of paper make housing affordable. That is why this legislation is all a lot of ifs maybes buts whatevers and whoevers and nobody is taking it on board because the reality is that the market the councils and the individuals know that they need income streams to have affordable housing. 
JOHN CARTER (National—Northland) 
: 
 I recently heard somebody say that this Labour Government had done a lot for health. I thought that was an interesting observation so I asked the person to explain. The reply was: “It has. It has made lots of people sick.” Well I thought the person had probably got it right. 
I heard the Minister in the chair the Hon Maryan Street just say that she wants to do something for people so that they can have more affordable housing. Well the sad thing is that this bill will actually distance people from that objective. That is what is disappointing about this legislation tonight. 
Earlier during the debate on Part 1 we heard a very good dissertation on clause 6 about the fact that what we are doing and what we should be doing is working with industry to see whether we can provide good but small and less costly homes—affordable homes that are not so pretentious but are still secure dry safe warm and healthy though maybe of a smaller size. The Minister in the chair at the time suggested that starter homes be two-bedroom homes. There is nothing wrong with that. In our generation a number of us started that way. 
There are companies around that are prepared to provide those sorts of homes. In fact a company up north is starting off with a house that will have three bedrooms but will not be large. It will have all the facilities and will be warm and dry and it will probably be put on the market for about $120000. By the time the cost of a section is added in it will be somewhere between $180000 and $200000. That is within reach of a lot of people. We heard a very good dissertation on that. 
Then in the debate on Part 2 we heard a very good dissertation on clause 42 and the issue around the word “if”. I know that we had that dissertation because I made it. Both dissertations were very good I have to say. 
But the disappointing thing is that this whole issue is likely to move us further away from the objective rather than achieve the goal the Minister wishes to achieve which is to make housing more affordable. If we could have argued here tonight that this bill in itself would somehow or other allow young families or those who are starting families to get into their first home and if this bill gave them that step then we could support it. We could actually say that yes there is merit in it. 
Remember it is not something that local government has to do; it is an option and so far I think only two have suggested they might take an interest in it. One is led by Bob Harvey the Mayor of Waitakere City who is inclined to support Labour Government legislation. Only two local authorities might get involved—and there are only two that might. That means that nothing will be achieved other than that some people will have their expectations heightened because they will think the Government has put through a bill that will make housing more affordable. 
If this legislation is implemented it will actually put on more cost on; it will not take cost away. We would happily have worked with the Minister and the Minister for Building and Construction to take away compliance costs. We heard tonight that it is estimated that the cost of getting a permit to build a home is now on average about $25000. Just to get a section with all the costs around resource management and other costs is about $50000. That is before starting to build—just in compliance costs. That is a total of $75000. We would happily have worked with the Minister to see how we could reduce that. We would have worked constructively with her and her colleagues to achieve that because $75000 is a lot of money for a lot of young people—for most people actually. 
We would quite happily have worked away with her and local government would have come to the party to see how it could help reduce costs. Already there are ways in which that can be done but unfortunately this bill does not address any of that. All it says is that if local government wants to it can consider affordable housing and if it wants to it can include it in its long-term council community plan. If it wants to it can do an assessment and if it wants to it can talk with developers. Well actually local government has the opportunity to do that already. This bill will not achieve any of that. 
TIM GROSER (National) 
: 
 In some respects I have some sympathy for the position the Minister is in. She has just been appointed to this position recently after God knows how many disastrous predecessors. She has inherited a problem the roots of which are deep and substantial and she has been told to come up with legislative sleight of hand masquerading as a substantive solution. Frankly the time left for a substantive solution to the things actually driving this problem has long since disappeared. What we have left is a political fig leaf and it will not cover the reality of the problem the Government will confront when finally it is forced to confront the electorate and face the decision of the New Zealand people as to who is to govern them for the next 3 years. 
We have with this bill an empty vessel almost wholly without content. Let us look at the language. It is childlike in its simplicity. We have bold declaratory language leading absolutely nowhere. Clause 6(1) is my favourite—“Territorial authorities that want to find out whether there is enough affordable housing”. I have never heard anything more childlike in its simplicity than that clause. Clause 8(1) states: “A territorial authority that decides to assess the need for affordable housing … must choose the method”. Well what on earth would it do? I have never seen anything so amateurish so childlike and so thin. But of course I understand the problem because the roots of a solution would have had to be taken years ago by this Government and this Minister who is in the unfortunate position of receiving a suicide pass on an issue of fundamental importance to the New Zealand people has come up with a completely empty vessel. 
Let us examine what the real problem is and put some numbers around it. In 1999 a median-priced house in our country cost just over six times the median wage. By 2006 this cost had catapulted to 10 times the median wage and it is higher today. In 1999 it took 42 percent of the average pay to service a mortgage on the median house price. Today it takes around 81 percent and that is after people have saved 20 percent for the deposit which of course by definition is a larger sum of money. It is no wonder that New Zealand is now one of the least affordable places in the world to find a house. 
If members of this Government think that this political fig leaf this legislative sleight of hand that they are forcing through in the dying days of this Parliament [ 
Interruption 
]—under urgency I say to Mr Cosgrove—will fool anyone then I say to them that the only people it will fool I am afraid are themselves. They will find this out the hard way on the hustings in a matter of weeks. The day of reckoning is right before them in all their electorates— 
Hon Clayton Cosgrove 
: Bring it on! 
TIM GROSER 
: —including Mr Cosgrove’s. 
The Minister said that this bill is voluntary and she asked what the alternative is. I will tell the Minister what the alternative is. The alternative has nothing to do with this approach. The alternative has to do with coming to grips with high interest rates. What has driven high interest rates? It is an inflation rate that has been divided up into two sectors for the last 5 years—the traded sector and the non-traded sector. 
The one thing the Government had control of if it had wanted to attack the roots of this problem was non-traded sector inflation which has been nearly above 4 percent for 5 years. But that would have meant tackling the gorilla in the room—the role of the Government—and tackling the need to do something to reverse the disastrous slide in productivity that is behind this problem. Having seen the Government do nothing on that front for 5 years we now see entering from stage left a massive inflationary injection from the traded sector which—up until now—with the higher exchange rate we had and with constant price depreciation from the manufacturing plants of China helped to contain inflation. But it has now gone berserk in the opposite direction. We now have imported inflation adding to the additional problem that this Government never tried to resolve and never tried to get on top of. These are the real solutions to the problem not this phoney legislation. 
DARIEN FENTON (Labour) 
: 
 I move  
That the question be now put 
. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I am delighted to be able to take a call. I was appalled by the Minister’s previous speech to the Committee on this bill. It alarmed me in the sense that if councils can do this already—address the problems of housing affordability—then they should be left to it. We do not actually need legislation to say to councils that if they want to do this they can. That is just an absolute nonsense. 
The Minister then said in terms of the affordable housing scheme that if a council has a scheme then all the developers can be blackmailed by that scheme to participate. When we start looking further into this bill we see that it gets worse and worse. If developers thought things were bad now—and when I say “developers” I mean people who want to do the business of providing housing for our many many communities in their own way and that is a worthy endeavour—they can see that we are now putting in place yet another hurdle for them. 
I direct members to clause 34. You know if developers are scared they will be even more scared by all this. In the event of a dispute it will be the Environment Court that decides. Clause 34(1A) states: “This section applies to a person described in subsection (2) if the person considers that there is a conflict”. Subclause (2) is headed: “The persons are—” and the list includes the Minister for the Environment and the Minister of Housing. 
Well we know what it is like when a Minister suddenly gets pulled into a consent process dispute. We need only look at the Whangamata marina to see what a mess the Minister of Conservation made of that and here we have the potential for that same event to happen again with the Ministers not being able to help themselves and making matters worse by poking their noses in. The mere fact that the Environment Court will decide the outcome in the event of a conflict means that the affordable housing scheme just gets worse and worse. If a council has one and if people want to build houses for their communities they should look out because that will really bite them where it hurts. 
I refer members to the commentary on the bill. We talked about ifs—that is the fact that adopting a scheme is optional. The fact that the Minister says “if” makes it voluntary. If it is voluntary and councils can do it now if they want to why do we need legislation? It is absolutely dumb and the Minister just does not get it. The public gets it. Both Phil and I have received emails and texts from people saying: “We hear what you’re saying. Good on you. Go for it. How dumb can they be?” and we totally concur with those sentiments. We are getting those sorts of emails and texts now. 
When I was reading out some of the parts of the commentary on the bill earlier on we talked about the provisions with regard to GST. The Minister said that the bill “should” reduce compliance costs. Well hello—talk about hopeful and wishful thinking! It “should” or maybe it will but we do not think so. Quite frankly this bill will do nothing but increase compliance costs. When we look at the consultative processes that local authorities will have to go through just to provide an affordable housing scheme we see that the costs are absolutely huge. Local authorities have to do a full cost-benefit analysis apart from all the other things they have to do that are set out in the different parts of the bill. It will be another huge cost on local authorities to get that expertise in order to pull all that information together. 
Hon Clayton Cosgrove 
: Have you written this speech on your cast Sandra? 
SANDRA GOUDIE 
: Perhaps that Minister might like to take the opportunity to read the bill and maybe to develop a bit of an understanding of it because the Minister of Housing has absolutely no idea of the definition of a compliance cost. If she did she would know that all this bill will do is add compliance costs. 
This bill does not address the cost of a resource consent the cost of a building consent or the cost of development contribution fees and it does not address the fact that most of that has to be paid up front. The people who are contacting us are talking about their own experiences. Ordinary mums and dads as someone said might want to build a hen house a carport a garden shed or even a deck. It just gets worse and worse and here we have a Minister who is totally ignorant about what compliance costs actually mean. This is something that Minister Cosgrove might like to focus his mind on. He might like to take a bit of notice of the actual bill. 
SU’A WILLIAM SIO (Labour) 
: 
 I move  
That the question be now put 
. 
JOHN HAYES (National—Wairarapa) 
: 
 Thank you Mr Chair— 
Hon Clayton Cosgrove 
: Here’s Sir Les Patterson. 
JOHN HAYES 
: It is Les Patterson if the member likes but I tell Mr Cosgrove that this bill is theatre. It has no substance whatever. It is theatre. It is absolute arrant childish nonsense. The Minister in the chair the Hon Maryan Street should be ashamed of herself and her officials should be ashamed of themselves for bringing this rubbish to the Committee and expecting us to be sitting here debating it. It will change nothing in this country. It will not deliver one affordable house to one person in New Zealand and the Minister has wasted the cost of building an affordable house with all the costs of putting this rubbish together. 
This bill is in the Minister’s words voluntary. Well it is not as voluntary as she thinks it is and let me explain why. If one develops a piece of land from nothing the first thing one has to do is to go to the council and apply for a resource consent. Then that has to be advertised and huge costs are associated with doing that. Then once one gets through the consultation process and secures the resource consent to subdivide one has to bring in surveyors architects and electricians to provide underground services and lighting. Then one has to provide sewerage curbing and channelling and macadam. All those things amount to a very high cost. On top of that the existing law requires one to pay a contribution to roading and a contribution to the amenities. Now clause 23 in this bill is proposing that developers can have additional costs imposed upon them and the Government is to price all the constructions it is wanting to bring in to reduce the cost of housing. 
All the Government is doing is putting up the price because if it imposes a cost on a developer he will pass it on. So if as this bill provides local authorities can start imposing additional costs upon developers on the basis that they may have to make so many houses in a particular development affordable houses then all that is doing is creating a cost to be passed on. 
The way to make house affordable in this country is first of all to get rid of the Resource Management Act and its Draconian elements. The Resource Management Act is OK to a point but it needs significant changes. 
The second thing that needs to happen is that the Government needs to encourage councils to back off on the requirement for building plans because just to apply for a building consent requires a minimum payment of $7000. Who told me that? Builder Dave Borman told me that in Masterton last week. It costs $7000 to get the proposal to the council. Then the council will get engaged in the process. It will want engineering reports and they cost money and it will also start to engage in a whole lot of other rules and regulations that come from the long-term council community plan. 
Clause 24 “Who may object to what” [ 
Interruption 
]—the member may object to that—states: “(2) A person to whom notice is given under section 22(2)(a) ie a person doing a development—(a) may object to the decision on any ground; and (b) may object to a provision in the territorial authority’s affordable housing policy on any ground.” All the Government is doing is setting up in this legislation more confrontation between people in the community who want reasonably priced houses and the local authorities that the Government is dumping more rules on through this legislation. I can tell members that because I have five district councils in my electorate and they do not want more nonsensical legislation imposed upon them. All the Government is doing is cluttering an already overburdened system that is not working. 
Hon Lianne Dalziel 
: It is not mandatory. 
JOHN HAYES 
: What does the member mean by saying that it is not mandatory? It is voluntary. That means it is worth nothing—absolutely nothing. This legislation means nothing to anybody because one cannot possibly enforce it. What one has to do in this country is enable people to work. Let me explain to members why that works. When I was a bit younger than Mr Cosgrove I had a work ethic. I went out and earned money and I saved a deposit to buy a house. Now we have a system called family support— 
TIM BARNETT (Senior Whip—Labour) 
: 
 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 Labour 49; New Zealand First 7; Green Party 4; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Motion agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 66 
New Zealand Labour 49; New Zealand First 7; Green Party 4; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Clause 1 agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 66 
New Zealand Labour 49; New Zealand First 7; Green Party 4; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Clause 2 agreed to. 
House resumed. 
Bill reported with amendment. 
The CHAIRPERSON (Hon Clem Simich) 
: I move  
That the report be adopted. 
A party vote was called for on the question  
That the report be adopted. 
Ayes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 4; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 50 
New Zealand National 47; ACT New Zealand 2; Independent: Copeland. 
Report adopted. 
Third Reading 
Hon MARYAN STREET (Minister of Housing) 
: 
 I move  
That the Affordable Housing: Enabling Territorial Authorities Bill be now read a third time 
. The purpose of the bill is to enable territorial authorities in consultation with their communities to develop and adopt affordable housing policy that requires developers to provide an affordable housing contribution for low to moderate income households. The passing of the bill will give territorial authorities new powers and a clear mandate to increase the supply of affordable housing in their areas. 
The supply of affordable housing is currently vexing a number of territorial authorities around the country. Those authorities see the need to improve economic development and economic prospects within their jurisdictions in order to enhance the lives of the families and communities living in those areas yet they see forces over the last 5 years in particular as having worked against housing affordability for a number of reasons. There are five places in New Zealand that are extremely expensive to buy houses in. The bill will give territorial authorities in Auckland Wellington Christchurch Queenstown and Nelson in particular—but also anywhere else where the pressure of unaffordable housing is being felt—the ability to require a contribution of affordable houses money or land from developers in order to satisfy some of the need for affordable houses to accommodate the workers and families who are required to boost and support the kind of economic development to which those territorial authorities aspire. 
The use of the new powers in this bill will vary across the country depending on the need so it was important to not make the bill compulsory. One might have inferred from John Carter’s contribution earlier that the National Party was keen to make the bill compulsory or alternatively to do nothing—that is the only other inference that one could have drawn from John Carter’s contribution. The bill is an enabling provision not a mandatory one. 
The other important aspect of the bill is that the policy for affordable housing must be developed in consultation with the community. Nobody wants to see enclaves of disadvantage proliferating throughout the country— 
Hon Clayton Cosgrove 
: The Tories do. 
Hon MARYAN STREET 
: Yes perhaps. It may be that they are the only ones who wish to push poor people farther and farther out beyond the reach of community services and transport nodes. That is not the vision of this Labour-led Government for our communities or our country. This Labour-led Government has a vision of mixed communities with a range of tenures from State house rentals through to homeownership at very high rates in order to achieve harmonious cohesive communities that are prosperous and safe for everybody. 
The bill includes a range of incentives that territorial authorities can offer to developers to facilitate the provision of affordable houses. The bill also consequentially amends four pieces of legislation. The select committee process has simplified the bill and I have worked closely with Local Government New Zealand to ensure that the bill is more closely aligned with the processes that local government bodies are familiar with in the Local Government Act 2002. 
I thank all of those who made submissions on the bill. I also thank the Local Government and Environment Committee and acknowledge the work it has done to bring the bill to this stage. Thank you Mr Deputy Speaker. 
PHIL HEATLEY (National—Whangarei) 
: 
 I was remiss in the Committee stage for not speaking about the commencement date of the Affordable Housing: Enabling Territorial Authorities Bill and I would like to raise that now in my third reading speech which of course I am quite entitled to do. Listeners will be interested to know that this legislation comes into force when it receives the Royal assent which is of course almost immediately. That commencement date is quite ironic in the sense that councils may or may not take up this legislation. In fact most councils across the country have opposed the bill as have builders developers and those who provide housing. 
This legislation has come 6 years too late. During the previous 6 years probably ending at Christmas last year property prices have skyrocketed in New Zealand. They have been growing much more quickly than household incomes. That is what housing affordability is all about. It is about the balance between household incomes and the buying power of that income—in other words household incomes versus the cost of housing. The cost of properties is divided into two aspects: one is the cost of the building and the other is the cost of the land. Property prices have skyrocketed over the last 5 years up until roughly Christmas last year. In terms of those two cost components building and land it is land that has increased in cost—more so than the cost of building. 
We have now reached the point where property prices have pretty much stabilised right across New Zealand and in fact they have dropped in some areas. So here comes Maryan Street and Labour. Property prices have finally stabilised if not dropping further and she suddenly has an answer; 5 or 6 years later we have had legislation brought into this House after property prices have stabilised. Am I saying that the stabilisation of property prices across New Zealand has solved the affordability problem? No I am not. What has happened is that property prices have now settled at a value well over and above what most first-home buyers can afford. They are still in trouble. The reality is that we had a period of growth that went for over half a decade and the Minister Maryan Street now rides over the hill on her white horse to save the day but she is 6 years too late. That is obscene. What has she saved the day with? She has saved the day with legislation that suggests that local councils across the country may or may not like to force builders and developers to set aside 5 or 10 percent of their land for cheap housing to set aside a whole bunch of cash from their housing development for first-home buyers or to build a whole bunch of cheap houses themselves. 
The Minister ignores the fact that that will drive up property prices for everybody else. As the correspondent who has been emailing me tonight has suggested what Labour members “do not want to acknowledge or at least they choose to ignore is that if you force developers to provide low-cost sections it will only force the price up of other sections” meaning that the house price of everyone else in the subdivision goes through the roof. It is quite true that if we force property developers builders or whomever to take a big hit on a few sections in a subdivision all it will do is force up the price of houses in the other parts of the subdivision because those builders will have to recover their costs. So a whole bunch of people end up paying more for their houses in order to possibly help a smaller bunch of other people. 
Of course that smaller bunch of other people may never be helped because as we heard at the Local Government and Environment Committee very few district councils across the country are interested in taking up the legislation. In fact I was quite amazed that the Minister acknowledged the five regions in New Zealand that have serious affordability problems: Christchurch Nelson Queenstown Auckland and Wellington. Interestingly Auckland City Council and the councils in South Auckland mainly and also North Shore City Council do not want a bar of the legislation. Wellington City Council came to the select committee and had very serious concerns about the legislation. Nelson City Council is not interested. We heard from Christchurch City Council that it may or may not use the legislation. Queenstown Lakes District Council is already implementing the principles of the bill without the legislation. So there we have it. Of the five areas that the Minister Maryan Street identified as having serious affordable housing problems none of the five are likely to use this legislation. That is the disgrace we are seeing here tonight. The 6 years have passed when the Government could have done something. It did not do anything and finally in the dying days of this Parliament it passes legislation through this House—forces it through this House—that will have no effect whatsoever upon the regions that may or may not take it on because they are not at all interested. 
My question to the Minister is why she does not do something for first-home buyers that will actually help them. Why does she not address the issues that matter? There are four or five of those issues. First of all what about tax relief? It is take-home pay and not gross pay that services a mortgage. So why does the Government not give people more money in their back pockets so they can afford to service a mortgage? Why does it not do that? That would help everybody; it would absolutely help everybody. Take-home pay matters. Why does the Government not deliver a tax cut for those first-home buyers so that they can service a mortgage? The deposit is not the problem; it is the weekly or fortnightly payments that trip up people. Members on the other side of the House do not seem to understand that but that is the case. 
Secondly why do the Minister and her Government not run this country in a better way economically and fiscally so that we can get interest rates under control? Interest rates more than any other factor affect a person’s ability to service a mortgage. The Minister will acknowledge that the average mortgage in this country is about $200000. That is not the average cost of a house but the average mortgage. A 1 percent interest rate drop equates to two grand a year which is 40 bucks a week. So a 1 percent interest rate drop can mean $40 a week to a first-home buyer. That is a significant amount of money I can tell members for many households today that are really struggling. A 2 percent interest rate drop would mean 80 bucks a week. That is very significant. The members on the other side of the House who have not made a contribution in this debate all night but simply sit there and mock do not even understand that take-home pay matters and that interest rates matter. 
What is more the Building Act and the Resource Management Act are two pieces of legislation driving up property prices right across the country. Why? It is because builders are finding that the cost of compliance under the Building Act and under the Resource Management Act has driven up property prices over the years. Why? It is because of the cost of the resource consent process. 
I raise a point of order Mr Speaker. I would just like your guidance. I have been speaking for about 8 minutes. [ 
Interruption 
] Can I make a point of order in silence? 
Mr DEPUTY SPEAKER 
: Yes we must— 
PHIL HEATLEY 
: The members on the other side of the Chamber have been heckling me the whole time. It has not stopped me at all; I have not responded to their heckling. They have not disturbed me one iota. Why do they bother Mr Speaker? Can you answer that? 
Mr DEPUTY SPEAKER 
: Phil Heatley. 
PHIL HEATLEY 
: Why does the Government not do something about the Resource Management Act and the Building Act? Why does it not give tax cuts so that people can afford to pay off their mortgage each fortnight? Why does it not get interest rates under control? Those things would really make a difference instead of bringing legislation into the House in the dying days of this Parliament that no local authority across the country will adopt. 
SU’A WILLIAM SIO (Labour) 
: 
 It is 25 minutes to 12 o’clock so I will keep this rather short. The working public of New Zealand who are listening to this debate could be forgiven if they feel somewhat confused after listening to the National Party contribution on this significant Affordable Housing: Enabling Territorial Authorities Bill. 
The public will have heard speakers from the National Party attempt to portray empathy for the local citizens of New Zealand but the truth is that those members do not care. They do not care about people who are struggling with private rentals. They do not care about families who want to get into their first home. The truth of the matter for those who are listening is that National just does not care about ordinary New Zealanders. We can look at 1990 when National was the Government. National Party members were the ones who sold off the State houses of New Zealand. They were the ones who sold them off to their friends. They were the ones who refused to maintain the stock that we now have to rebuild—that is what the Labour Government is doing. 
I acknowledge the Hon Maryan Street because she is a Minister of Housing who is showing leadership in difficult times. She is a Minister who is showing innovation by coming forward with the Affordable Housing: Enabling Territorial Authorities Bill. Labour believes that access to decent affordable housing is fundamental to the health and well-being of families and communities. It is a basic human right of New Zealanders that the National Party does not seem to consider to be important. 
The bill provides new powers to enable territorial authorities to increase the supply of affordable housing in their local area. It does not try to impose anything on local authorities; it is an enabling bill about working in partnership with local government throughout this country. “Partnership” is a word that the National Party ought to be familiar with; it ought to learn from this Government. This is a Government that is prepared to work in partnership with like-minded parties in this House. 
I join the Hon Maryan Street in commending this bill to members of this House. 
JOHN CARTER (National—Northland) 
: 
 There is only one comment we can make about Mr Sio’s speech; one word sums it up and that is “nothing”. It was a zero contribution. What a shame. The sad and unfortunate thing is that— 
Hon Clayton Cosgrove 
: Did you think of that yourself? 
JOHN CARTER 
: I tell the member across the House that he certainly would not have done so. He has not the capacity to think of anything. All he thinks of is nothing because that is what is between his ears. 
The unfortunate thing about that contribution and those we have heard so far from the Government side of the House is that this is a serious issue. It is an issue that the Minister of Housing Maryan Street did hope she might achieve something on. She hoped that through this legislation she might make housing a little more affordable for some people. Sadly and unfortunately that will not be the result. The sad fact is that had the Government worked with the industry worked with building firms it could have come up with something that would have been very positive for people on low incomes. It could have come up with good sturdy houses of a smaller size—with three bedrooms but sturdy warm healthy and safe. All those things could have happened. In fact a firm up north right now is looking to put such a house on the market. It is a small three-bedroom home but nevertheless it is a good start-off home. 
Most people in my generation started off in a smaller-sized house then moved up. We have gone away from that in this country because our expectations have grown beyond our ability and we need to get back to the fact that it is actually acceptable for people to start off in smaller-sized homes—something not quite so pretentious that nevertheless allows people to bring their children up safely and healthily. A firm will be putting a house on the market for about $120000—just for the house. That firm is to be commended. The shame of it is that this Government did not think to start working with the firm and to ask it how it could help make that happen. 
Shane Ardern 
: They’ve added $30000 to the price of it. 
JOHN CARTER 
: Well the shame of it is that if the Government had been prepared to look at the whole issue of the compliance costs the National Party certainly would have supported it. Local government now issues building permits. The extra compliance costs for an average-sized home are about $25000 per home. That is a hell of a lot before one even starts building. We also know that compliance costs are imposed on sections because of councils’ obligations under the Resource Management Act. Lianne Dalziel asked earlier who passed that Act: it was passed by the National Government with the support of the Labour Party back in 1991. 
Hon Lianne Dalziel 
: So what is your problem? 
JOHN CARTER 
: She may have forgotten but it was actually a unanimous decision—just so that she understands we are all complicit in the cost of it. She sits there and asks who passed the Resource Management Act: we all did. The sad thing is that this Labour Government actually has had a chance to redress and reform a whole lot of it and the Government has forsaken that opportunity. Well that will be addressed if we are fortunate enough to become the Government after the next election. But the problem in the meantime is that it actually costs on average about $50000 a section now for someone to start subdividing. 
John Hayes 
: At least. 
JOHN CARTER 
: Well yes on average. That is an estimate—it is hard to guess exactly. But it is about $50000 plus $25000 for building so one actually starts off $75000 behind. If we had addressed that issue in this bill maybe we would have made some more progress plus worked with— 
Hon Lianne Dalziel 
: Why didn’t you fix it? You had 9 long years. 
JOHN CARTER 
: Well we have both had 9 long years—and they have been long years. The sad thing is that this Government has done nothing to address it at all. 
Hon Lianne Dalziel 
: You’re making it up. 
JOHN CARTER 
: Well the member over there shoots her mouth off and that is the problem we have. Those members talk a lot and will not listen. She has actually done nothing at all other than chap her gums. If she just listened for a minute she would see that I am actually trying to be constructive but that is not something she is known for. 
The fact is that had we addressed those issues we would have actually seen something positive. Indeed I believe that if we had addressed some of those issues we would have the support of local authorities across the country as well. It is they who tell us of the problems they have. When one talks to local government—and I am sure the members here have and do—one sees that it is bound by rules and regulations that cause it problems in servicing its constituents and ratepayers. That is part of the problem that we should have been addressing in this legislation about affordable housing. Sadly and unfortunately it has not been addressed. I know that members in this House have tried to get round the whole issue of building regulations. Unfortunately it has just got out of control. I was told just recently by a roofer that if he had to follow every rule and regulation set down by the Department of Building and Housing every roof he put on every house would leak. That sort of stuff is nuts and it is that sort of stuff— 
Hon Clayton Cosgrove 
: Rubbish! 
JOHN CARTER 
: Well I can get the guy to come and talk with the member. The fact is that if that roofer built according to the law the roofs would leak. The silly thing is that we have people writing rules and regulations who do not know about building. The fact is that sort of stuff is increasing the cost. 
On top of that the unfortunate thing about this bill is that it adds to the continued cost that this Government is imposing on local government. This is just another cost. If the local government bodies pick up this challenge put down by the Government—and most if not all of them will not—then it will just be another cost. If members look at clause 42 they will see that it says that local government bodies have to “contain a summary of the local authority’s affordable housing policy”. Well that means that if they develop an affordable housing policy they have to get consultants in to develop it. 
Hon Lianne Dalziel 
: Read the bill. 
JOHN CARTER 
: I am. I am reading it right here. Just for members I say that it says “A long-term council community plan”—I will read it slowly for the member because I know she finds it hard to absorb—“must contain a summary of the local authority’s affordable housing policy if it has adopted one…”. 
Hon Lianne Dalziel 
: “If”! 
JOHN CARTER 
: That is right. I talked about “if”. 
Hon Lianne Dalziel 
: What does “if” mean? 
JOHN CARTER 
: Well did I not make a speech about “if”? Did I not say that that is why it is so silly? It actually means that local authorities do not have to do anything. So why do we have this bill before us at all? The member just argued against herself. The bill says “if” local authorities do it—well most of them will not do it. Most of them will not do it because they know that it will not achieve anything but if they do it it will cost the ratepayers money. If they do it it will cost the homeowner more. The chances are they will not do it; I am sure they will not. 
The only thing that is iffy is that member’s future actually; her ability to continue making these stupid rules is limited thank goodness. But the fact is we have legislation here and the member herself has just asked why we should put this provision in if no one is going to do anything with it. The sad fact is that that is what the bill will end up with—nothing. I started with nothing and this bill will unfortunately end up with nothing. 
PITA PARAONE (NZ First) 
: 
 Tena koe Mr Deputy Speaker. It has been a long day. I do not know whether it was my good fortune but as a consequence of the Order Paper I had to be here at 9 o’clock this morning. Those of our fellow citizens who are working out there and making sure that our country is still alive who are travelling back from work having completed their night shift or are travelling to work to start a night shift may be interested to know that the House is now hearing the third reading of the Affordable Housing: Enabling Territorial Authorities Bill. I stand on behalf of New Zealand First to say that we continue to support this bill. 
This country needs more affordable homes for its citizens. The bill provides for that. It is very interesting to hear critics of the bill accuse the Government of doing nothing yet here we have a bill that was introduced into the House to help the issue of affordable housing for its citizens and they still criticise the Government for it. The bill provides a vehicle for territorial local authorities which is voluntary. Those who have spoken against the bill have questioned this voluntary aspect. That then raises the question as to what the alternative is. Making it compulsory or doing nothing? 
Then we heard that those who have spoken against the bill would solve this problem with tax cuts and by controlling interest rates. Well I tell those home seekers—in fact I caution them—to please please not get sick; to be prepared to home school their children; and to talk to their neighbours and plan how they intend to protect themselves from criminals. Those are just some of the services that will be affected. But the public can rest in the knowledge that with the tax cuts they will be able to pay the tolls to travel on the roads. 
I apologise for my cynicism but here we have a bill that is intended to address a serious issue and rather than giving support to it much of the debate has been to deride it. However I appreciated comments about how developers would pass on those costs to others. When I heard those comments I pondered on the houses built in the 1950s 1960s and even 1970s and on the fact that the three-bedroom homes of that era were very much smaller than the three-bedroom homes of this day and age. I wonder whether it could be a practical solution for designers or architects to revert to the 1950s 1960s and 1970s design of homes so that we would then be able to build more on the land that is available. Now that might sound pretty simplistic but I ask members to think about it if that is the concern that people have. Quite clearly this bill is all about allowing territorial local authorities to exercise their option to take it up but it does— 
Chris Tremain 
: They can do it already. 
PITA PARAONE 
: But I say to the member that some do not and as a consequence nothing is done. Again here is another vehicle. I do not want to prolong this debate. I am quite clear on behalf of New Zealand First that we support this bill. We commend it to the House. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I will raise some pretty scary issues here. The Affordable Housing: Enabling Territorial Authorities Bill gives councils the option as to whether they want to have an affordable housing scheme. That is great I say to members. It is optional but the scary part is that if councils decide to take up that option and go down the path of having an affordable housing scheme the bill states in clause 28 that binding commitments may be required. We must remember that an affordable housing scheme will have a standing accorded to it alongside the Resource Management Act so that it goes through an Environment Court process and is then included as a part of—and has the equivalence of—a district plan. That means it will be very difficult to change that policy once it is in place. 
I also add that the Governor-General has the power to make regulation to enforce or require some commitments through those affordable housing scheme policies. Some considerable commitments will be required of developers here so I do not see how that can be supportive of affordable housing because those additional costs on developers will have to be met in some way or another. Let us look at the binding commitments that may be required when a council develops an affordable housing scheme. The council can make some binding commitments on the developer at the time of granting the resource consent and the building consent. Those are two different occasions when the council can make the developer meet commitments in terms of affordable housing and that has to come by way of land money or the building of houses on property. Whichever way that cake is cut it is going to be a cost on the developer. How is that to be met? It will certainly not be the council that will meet that cost; it will be the developer and that cost will be passed on. It will be interesting to see how that pans out in the future. 
I go to the commentary which states in regard to GST: “These amendments should reduce compliance costs for all parties.” Well hello I have never seen such a glaringly incorrect statement. That is an absolute joke. It shows complete ignorance and a lack of understanding of what compliance costs are and how they are passed on. It shows that this Government—and in particular this Minister—has no understanding of the fact that businesses provide jobs and wages to people to be able to afford to buy homes. In the Coromandel our average wage is one of the lowest in New Zealand at around $26000 a year. How on earth will lower socio-economic groups be able to afford even an average home—even the home that John Carter talked about? It is an absolute joke. It is absolute nonsense that not only will binding commitments be possibly required of developers but also it gets really scary when we consider what has happened through the Resource Management Act process and how it has developed under councils. This measure is just adding to that process and frankly anybody building subdivisions should be very very afraid of what it will mean if a council adopts it. Not only will this put compliance costs on to developers but also it will put added costs on to ratepayers. 
Once again we have to look at the bill to see what the criteria are around developing an affordable housing scheme. The bill has gone to great lengths to outline all the things that are necessary for a council to do to meet the criteria for having a scheme. The commentary states in relation to clause 10 that the criteria must include the proposed location of the development the kind of development the potential of the development the desirability of the community having a variety of housing tenures or whatever and also a cost-benefit analysis is required—the whole works. The bill is really really prescriptive about all of the work a council has to do to come up with an affordable housing scheme. Councils will have to develop or purchase that expertise. That means—[ 
Interruption 
] 
John Hayes 
: Let her speak! 
SANDRA GOUDIE 
: No just ignore them. The Minister of Housing is totally ignorant about compliance costs. If we ask Government members to define what compliance costs are they cannot come up with an answer. Maybe the Minister might like to take a call and share with us what she understands compliance costs to be. If we ask anybody applying for resource consent or building consent what sort of charges they are experiencing at the coalface they will say those costs are prohibitive in terms of undertaking their activities. I challenge the Minister to tell us what she thinks compliance costs are and what compliance costs she thinks will be reduced as a consequence of her bill—that is if any local authorities take up the opportunity to have an affordable housing scheme. 
I think this bill is an absolute nonsense. In her own commentary the Minister said that it should reduce compliance costs. Well hello it is not going to; it will have the opposite effect. I wish this Government would get with the programme and really understand what the fiscal implications are. It has no fiscal understanding of the impacts of any of the legislation it puts in place. I see that the Minister of Finance is here. Maybe he should take a call and tell us what he thinks compliance costs really are and maybe he should enlighten his Ministers as to what they are. This bill will deal to developers. It will do nothing but shut down subdivisions and shut down housing. There will be even fewer opportunities for people to buy their own home. 
JOHN HAYES (National—Wairarapa) 
: 
 If we want to build affordable houses then I am afraid I have to disagree with the Minister. Even if one is living in Queenstown Wellington Nelson or Auckland and one is earning a substantial income house prices are very substantial. One could be living in Eketahuna earning $12 an hour and not be able to— 
Debate interrupted. 
Sitting suspended from 12 midnight to 9 a.m. (Friday)