Volume 606 Week 16 - Thursday 27 February 2003 
Volume 606 Week 16 - Thursday 27 February 2003 
[Volume:606;Page:3849] 
Thursday 27 February 2003 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers. 
Visitors 
Parliamentary Delegation from European Parliament 
Mr SPEAKER 
: I have much pleasure in informing honourable members that a parliamentary delegation for relations with Australia and New Zealand from the European Parliament led by Mr Robert Sturdy is present in the gallery. I am sure that we welcome them. 
Business Statement 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 Next week in the House it is the Government’s intention to complete the passing of the Government Superannuation Fund Amendment Bill (No 2) the second reading of the Government Communications Security Bureau Bill and the second reading of the War Pensions Amendment Bill (No 2). The Government also intends to make progress on the Taxation (Annual Rates Maori Organisations Taxpayer Compliance and Miscellaneous Provisions) Bill and the Racing Bill. Wednesday is a members’ day. 
GERRY BROWNLEE (NZ National—Ilam) 
: 
 I thank the Leader of the House for that indication of what we will be doing next week. I just ask him how soon he thinks the Responsible Gambling Bill which is at No. 25 on the Order Paper might come before the House noting that public interest in that bill is growing. I also ask him given that the Order Paper is now so very long whether he expects that the next session of the Parliament will have a number of urgent sessions. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 On the latter point I will be discussing that with my friends in the House. [ 
Interruption 
] Then I shall be informing my enemies of the result of those discussions. On the Responsible Gambling Bill we have not set down a firm date at this point. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 I ask the Leader of the House what the Government’s intentions are in respect of the passage of the Maori Television Service Bill which has been long-time promised but on which there seems to be no progress whatsoever. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 It is the Government’s intention to pass the bill. Of course I would be only too willing to accept any offers of support from New Zealand First to accelerate that passage by means of urgency or other mechanisms. 
RON MARK (NZ First) 
: 
 I raise a point of order Mr Speaker. I seek clarification from the Leader of the House in relation to the Police Amendment Bill (No 2) which I see is still languishing at No. 32 on the Order Paper.  
Mr SPEAKER 
: No that is not provided for. 
Questions to Ministers 
Welfare—Policy Process 
1. Dr MURIEL NEWMAN (ACT NZ) 
 to the  
Minister of Social Services and Employment 
: What is the proper process by which Ministers with innovative ideas on welfare reform present them to Cabinet for consideration and has he received any Cabinet reports prepared by Hon John Tamihere challenging the Government welfare monopoly and calling on the Government to unleash Maori communities from state dependency by allowing “communities to take back their ability to be responsible for themselves to manage themselves and to grow a work ethic commitment and responsibility themselves”? 
Hon STEVE MAHAREY (Minister of Social Services and Employment) 
: 
 The proper process for Ministers with ideas on welfare reform is to present them to Cabinet for consideration either by raising them with me as the relevant portfolio Minister so that they can be addressed in a paper I submit to Cabinet or by raising them during a Cabinet committee or Cabinet discussions on papers on welfare reform. I have not received nor would I expect to receive papers on welfare reform submitted directly to Cabinet by the Hon John Tamihere as welfare reform is outside his particular portfolio responsibility. 
Dr Muriel Newman 
: Given that the Hon John Tamihere has not arranged for the work to be done has the Minister asked his officials to prepare full and comprehensive reports analysing the merits of his colleague’s policy proposals; if not why not? 
Hon STEVE MAHAREY 
: No I have not asked for work to be done on the privatisation of welfare. However issues like decentralisation and devolution are part of our work programme. 
Dave Hereora 
: What innovative ideas on welfare reform is the Government pursuing? 
Hon STEVE MAHAREY 
: The Government is moving from what is called a social welfare approach to a social development approach as I outlined in a paper I tabled in the House on Tuesday. I shall cite three examples of the work that is currently in practice from that approach. We have decentralised work and income services of the Ministry of Social Development itself a new organisation to focus on regional labour-market needs and that has been very successful. We scrapped the work-for-the-dole scheme and focused again on real jobs with real wages. We have introduced an enhanced case management process for the domestic purposes benefit and widows benefit that we think is already working very well. 
Katherine Rich 
: In the light of the Hon John Tamihere’s “verbal bazooka” relating to disadvantaged youth: “There are third or fourth generation kids who believe that a Lion Red means everything is going to be great; that burglary is good because they’re going to eat. Now the do-gooders at WINZ they can’t change that.” can he confirm that the Minister of Youth Affairs had shared those views with his Cabinet colleagues prior to his knowledge wave speech; if so when and in what form? 
Hon STEVE MAHAREY 
: The Hon John Tamihere for many years prior to entering Parliament since being a member of Parliament and since being a Cabinet Minister has well-known views on the issues of welfare and they are known in the media as well. 
Rt Hon Winston Peters 
: Having regard to the provisions of the Maori Development Act and the monitoring requirements of the Ministry of Maori Affairs is he telling us that that Minister has made no submissions whatsoever either in his associate portfolio or his primary portfolio to him on the issue of juvenile welfare; is this just a case of Mr Tamihere opening his mouth and beating his gums with no prior preparation whatsoever? 
Mr SPEAKER 
: All but the last comment can be commented on. 
Hon STEVE MAHAREY 
: I can tell the member that the Hon John Tamihere has signed papers through Cabinet as is appropriate in his portfolio area. He does the work he is supposed to do from his area extremely well. 
Sue Bradford 
: When is the Government going to tell the House and the public when its long-awaited benefit reform programme will commence and of what it will consist given that there appears to be no welfare reform legislation at all on the Government’s agenda this year? 
Hon STEVE MAHAREY 
: As the member will know benefit reform has always been focused on for this second term of a Labour-led Government and she will know from the Prime Minister’s speech to the House at the beginning of this session of Parliament that we have slated some small changes in that area this year with major changes to be made in next year’s Budget. 
Hon Peter Dunne 
: Following on from the fulsome praise of Mr Tamihere that the Minister gave in the House on Tuesday will he be taking steps therefore to ensure that Mr Tamihere can present his views on welfare reform to Cabinet: if so when? 
Hon STEVE MAHAREY 
: As a former Cabinet Minister himself the member will know that there is a process to be followed in this—that is either the member can raise those issues with me or discuss papers as they come through. There are many channels to be used. 
Dr Muriel Newman 
: Does he find it helpful as a Minister to have a Cabinet colleague who assesses his policies as being “dumb dumb dumb” and does he believe such a public attack of his policies is consistent with the rules on collective responsibility as set out in the  
Cabinet Office Manual? 
Hon STEVE MAHAREY 
: The comments in relation to housing policy which was the quote around “dumb dumb dumb” of course do not reflect Government policy. No it is not helpful and no it does not reflect collective responsibility. 
Rodney Hide 
: I raise a point of order Mr Speaker. I do apologise. I do not think that members could hear that answer. 
Mr SPEAKER 
: Please be seated. I heard it. 
Rodney Hide 
: I raise a point of order Mr Speaker.  
Mr SPEAKER 
: It had better not be in relation to this. I am not having points of order like this raised frivolously. 
Rodney Hide 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: On another matter? 
Rodney Hide 
: It is this question. It is a test whether you hear it Mr Speaker or members hear it. 
Mr SPEAKER 
: No it is a test whether I think it is a reasonable point of order and the member’s was not. 
Hon Peter Dunne 
: I raise a point of order Mr Speaker. I hesitate to support the member but there has been a problem all week in this sector of the House with the amplification system and the member may well have a point about the answer not being heard. I do not sit very far away from him in relation to the Minister and I too found it difficult to hear. 
Mr SPEAKER 
: The best way to have no problem at all is to have absolutely no interjections whatsoever. When I was in the European Parliament I found that to be the case and that was a very refreshing change and I acknowledge the delegation in the gallery today. This is a Parliament based on a robust exchange of views—I do not want to do that; it lies in the hands of the members themselves. However the point having been made I will have the matter looked at over the weekend. 
Prostitution Reform Bill—Police Powers 
2.  
LARRY BALDOCK (United Future) 
 to the  
Minister of Justice 
: Does he stand by his comments reported in the  
Dominion Post 
 on 21 February 2003 that “The [Prostitution Reform] Bill is laissez faire at the moment; it provides for no controls … The police will tell you that gangs are involved in a big way and providing prostitution alongside other criminal activities they are involved in. I think it would be unconscionable not to give the police the power in the prostitution business to exclude those people who are patently unsuitable to be involved in it.”; if so has he discussed these concerns with the Minister of Police? 
Hon PHIL GOFF (Minister of Justice) 
: 
 Yes and yes. 
Larry Baldock 
: Does the Minister agree that the intended purpose of the Massage Parlours Act was to regulate prostitution and prevent the involvement of unsuitable operators and can he explain what the difference would be between the controls the Massage Parlour Act imposes and the amendments he intends to introduce in the Committee stage of the Prostitution Reform Bill? 
Mr SPEAKER 
: No. I have reflected on this. This is a difficult question. I have had some difficulty with it. It is a members’ conscience bill and the Minister cannot be asked for legal opinions and what have you about this particular matter. That question was too wide and asked for a legal opinion on a different Act. I say to the member that there has to be another way. He may want to have another go at another question but I must stress this has to be about something that is within the Minister’s portfolio. 
Judith Collins 
: If the Minister is concerned about the big way in which gangs are currently involved in the prostitution industry how can the public have any confidence that these gangs will not be able to operate with even greater freedom in the laissez-faire environment that it fails to control? 
Hon PHIL GOFF 
: It is true that gangs are acting frequently in the sex industry at the moment with far too little controls on what they are doing. I have said that the bill as it currently stands provides for no controls to eliminate criminal elements from owning or operating brothels. That is why I have foreshadowed as a member rather than as a Minister the Supplementary Order Paper that will give the police the power to exclude criminal elements from owning or operating places of prostitution. 
Mr SPEAKER 
: The Minister can answer as Minister not about his own Supplementary Order Paper which of course is in his own name. It is a rather difficult one. The Clerk’s office let the question through—I had no participation in this matter and I support its action in doing this—but I want to say it is a very difficult area and it must concentrate on what the Minister’s responsibilities are. 
Peter Brown 
: How does the Minister reconcile his position by saying on the one hand it is imperative we have controls and licensing of brothel owners and zoning for where places of prostitution can be located yet on the other hand he says he will vote for the bill anyway—is that not having a bob each way? 
Hon PHIL GOFF 
: All of us when we look at legislation have to decide whether there is a way in which that legislation can be improved. I have looked at it I have made that decision I have announced that decision to the House. 
Sue Bradford 
: Can the Minister see any case in a licensing system for brothel owners or managers given that serious criminals or gang members can easily put a front-person in to run the place when they are in fact behind the scenes? 
Hon PHIL GOFF 
: I am aware of that potential which is why the definition of those who own or operate places of prostitution will be designed to cover those people operating behind the facade of some other individual. 
Martin Gallagher 
: In your capacity as the Minister what do you think would be necessary to incorporate in legislation— 
Mr SPEAKER 
: I do not think anything. The member cannot bring me into the debate. This is the difficulty we are getting into. It has to be a question about the Minister’s portfolio. 
Martin Gallagher 
: What would be necessary to incorporate in legislation to give police the power to exclude criminal elements from owning or operating brothels or having anything else to do with them? 
Hon PHIL GOFF 
: Clearly it would be necessary to have at least a low-level licensing regime under which those with convictions for serious sexual violent arms drug or gang-related offences could be legally prohibited from operating a place of prostitution. 
Larry Baldock 
: If the Minister admits that gangs have been able to get involved in a big way in the prostitution business under the strict licensing regime set up by the Massage Parlours Act what advice has the Minister received that this will not occur under any other regime that is intended to be set up under the Prostitution Reform Bill? 
Hon PHIL GOFF 
: It is true that there are problems in the current system. The current system with regard to massage parlours of course does not cover other areas that can be properly defined as places of prostitution and in a sense what I am proposing therefore goes wider than the current restrictions on actual prostitution in the community today. 
Rt Hon Winston Peters 
: Why is the Minister trying to give his views a cloak of respectability by saying that he is seeking to act against gangs when in fact he and his colleague the Minister of Police have had every chance to act against gangs but are soft on lawlessness—which is why gangs are flourishing in this country? 
Hon PHIL GOFF 
: That statement is patently incorrect. In fact the strong legislation that exists on gangs today albeit passed by a National Government was heavily promoted by the present Minister of Police and myself from the position of being in Opposition where we drove that National Government to do something about it. 
Larry Baldock 
: Has the Minister received advice that would disagree with the sponsor of the Prostitution Reform Bill that the Resource Management Act is sufficient to give protection to communities who may object to brothels with neon lights blazing being set up in their neighbourhoods; and if he does disagree with this why would he support the bill even if his amendments did not pass— 
Mr SPEAKER 
: No the Minister has no responsibility for the Resource Management Act. 
Hon Peter Dunne 
: I raise a point of order Mr Speaker. The question related to advice that the Minister has received. It is not a question of whether he was responsible for a particular piece of legislation. My colleague’s question asked whether he had received advice that the provisions of that legislation might actually be in contradiction to some of the provisions of the bill. I assume that the advice my colleague was referring to would be advice from his department. 
Mr SPEAKER 
: It can only be advice in connection with his own ministerial responsibilities. 
Hon PHIL GOFF 
: I have indeed received advice that the Resource Management Act focuses on environmental rather than social factors and a necessary safeguard would be to have an explicit position with regard to zoning to avoid there being places of prostitution in clearly socially inappropriate areas. 
Peter Brown 
: I seek leave to table a newspaper article that clearly states that the Minister supports amendments. 
Mr SPEAKER 
: Leave is sought to table that. Is there any objection? There is. 
Larry Baldock 
: I seek leave to table a document from the General Assembly of the United Nations which clearly outlines that prostitution is an affront to the dignity and worth of the human person and endangers the welfare of the individual. 
Document by leave laid on the Table of the House. 
Economy—OECD Ranking 
3.  
Hon BILL ENGLISH (Leader of the Opposition) 
 to the  
Prime Minister 
: Further to her response yesterday that the goal of being back in the top half of the developed world in terms of per capita GDP by 2011 is not a short-term goal what is her Government’s timeframe for achieving that objective? 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 No time frame was established when the objective was set and I shall not be establishing one today. 
Hon Bill English 
: Given that she has just said that no time frame was set does she recall writing in the foreword of the Global Entrepreneurship Monitor: New Zealand 2001 the following statement: “These results are greatly encouraging of our goal of economic transformation and our return to the top half of the OECD ratings by 2011.” and if she can recall that statement why has she changed her mind? 
Rt Hon HELEN CLARK 
: In the Prime Minister’s statement last year I made a speech around this document—[ 
Interruption 
]  
Mr SPEAKER 
: I am not having yelling like that. People will be sent outside. I am sick and tired of that sort of conduct. The Prime Minister can answer then I will determine whether the question has been addressed. 
Rt Hon HELEN CLARK 
: The Government’s formal objectives were set out in this document—to reach it over time. 
John Carter 
: I raise a point of order Mr Speaker. The Prime Minister has not answered the question. The question asked by the Leader of the Opposition Mr English was very clearly about a statement made and whether the Prime Minister recalled the statement she made in 2001 and he asked her whether she recalled making it and if so whether she had changed her mind. The fact that she may have made a statement about it in the Prime Minister’s statement has nothing to do with the question asked and she should be asked to answer the question. 
Mr SPEAKER 
: I wonder whether the Prime Minister could add to her answer. 
Rt Hon HELEN CLARK 
: I have no recollection and I will not stand by it because it is not achievable. 
Clayton Cosgrove 
: Why will the Government not set a specific date? 
Rt Hon HELEN CLARK 
: Because the advice we have is that there are simply too many variables involved including that we cannot predict how fast others will grow. The objective is to move higher up the rankings over time. We are prepared to take a long-term view. A Leader of the Opposition with 6 weeks’ future cannot. 
Rt Hon Winston Peters 
: In the interests of helping the Prime Minister and her amnesia if it is a fact that she did write that statement and set a goal at 2011 against her name will she come to this House and apologise for the first time for misleading New Zealand many times? 
Rt Hon HELEN CLARK 
: This document is the Government’s formal statement of policy. That is what stands. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. I am asking the Prime Minister whether she did make such a statement and put her name to it and if provided with that evidence she will come to this House and apologise. Waving around her changed position since the last election is not satisfactory by way of an answer. Can I have an answer to my question? 
Rt Hon HELEN CLARK 
: February last year. 
Rt Hon Winston Peters 
: No no. Will she come and apologise for having said one thing before the election and having changed her mind now?  
Mr SPEAKER 
: Does the Prime Minister want to add to her answer? 
Rt Hon HELEN CLARK 
: I have no recollection of that document. If it is there it is clearly wrong and does not reflect Government policy. 
Gerry Brownlee 
: I raise a point of order Mr Speaker. Increasingly when points of order are taken by members on this side of the House there is a barrage coming from the Government whips’ desk and many Ministers around the desk and there seems to be little desire on your part to ask them to be quiet. What we are getting instead is a general warning to the House about noise and interruption while such points are being made. That is very unfair on those members who do not engage in that activity and it would be unfortunate if a practice developed where if the noise came from the Government side of the House there was just a general warning but if that noise came from the Opposition side of the House there was specific mention of a member’s name. We would like to have all points of order heard in silence by all parties particularly Government whips. 
Mr SPEAKER 
: That is a very good point and I will adhere to that. 
Rodney Hide 
: When she declared that achieving the top half of the OECD within a decade on a gross domestic product per capita basis was a “totally unrealistic goal” did she include in her declaration her Finance Minister Michael Cullen happily confirming to  
Metro  
magazine 
journalist Mr Gilbert Wong that the “Government’s economic growth goal remains to return New Zealand to the top half of the OECD in 10 years” as reported in the  
Metro  
magazine last December; if not why not? 
Rt Hon HELEN CLARK 
: A great deal of advice was taken before releasing a formal framework that does not commit to a specific date because it is not achievable. I will be amazed if an economic statement that I understand will be released later this afternoon commits to such a goal because Dr Brash knows that it cannot be achieved and has said so. 
Rodney Hide 
: I raise a point of order Mr Speaker.  
Mr SPEAKER 
: What about? 
Rodney Hide 
: Well are you asking me to raise it? 
Mr SPEAKER 
: The member may raise a point of order but not in relation to the answer. There are far too many points of order raised by that member in this House. 
Rodney Hide 
: I raise a point of order Mr Speaker. I ask you to reflect on the answer that was given. My question was quite specific. I quoted an article. We got the same answer that the Prime Minister gave to every question and not once did she address my actual question. My question was not about her report. My question was: when she said it was unrealistic did she include Michael Cullen stating that goal? 
Mr SPEAKER 
: No the Prime Minister addressed the question. 
Jeanette Fitzsimons 
: Why has the Government set a comparative target even without a time line that could be met in part by the rest of the world going into recession or not growing so fast rather than a target that looks at New Zealand’s real levels of well-being? 
Rt Hon HELEN CLARK 
: We are interested in New Zealand’s real well-being and that measures up quite well in a number of OECD indicators. For example we are ranked ninth in the world for rates of unemployment and that is certainly within the first half of the OECD. We are also in the three top-performing countries on mathematical ability reading and literacy. So there is a range of indicators where we do very well. But as the House is aware for over half a century New Zealand dropped down the per capita GDP rankings and doing something about that over time is important. 
Hon Bill English 
: If it is the case that the Prime Minister will no longer stand behind her statement under her name that her goal was to return to the top half of the OECD ratings by 2011 and that Dr Michael Cullen made the same statement in December 2002 what now is the Government’s economic goal and why should we believe what she says because she will probably change her mind some time? 
Rt Hon HELEN CLARK 
: The Government put out a formal statement. That is what we stand by. 
Rodney Hide 
: I seek leave to table the  
Metro  
magazine where Michael Cullen states the goal as getting New Zealand to the top half of the OECD. 
Mr SPEAKER 
: Leave is sought for that purpose. Is there any objection? There is objection. 
Hon Bill English 
: I seek leave to table the report called  
Global Entrepreneurship Monitor: New Zealand 2001  
containing the Prime Minister’s statement. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Auckland City Council—Housing Tenants 
4.  
GEORGINA BEYER (NZ Labour—Wairarapa) 
 to the  
Minister of Housing 
: What is the Government doing to protect the tenure of Auckland City Council housing tenants? 
Hon STEVE MAHAREY (Acting Minister of Housing) 
: 
 I am pleased to report that tomorrow will mark the beginning of a new era of security for Auckland City Council tenants with ownership of nearly 1700 properties shifting to Housing New Zealand Corporation. As a result of that purchase about 1200 low-income Aucklanders will now receive an income-related rent and be better off by up to $25 per week on average. Tenants will also benefit by the Government investing $75 million over the next 5 years in upgrading and redeveloping the housing stock. 
Georgina Beyer 
: Why did the Government purchase Auckland City Council housing stock? 
Hon STEVE MAHAREY 
: Auckland is facing a serious housing crisis. The loss of nearly 1700 homes for low-income Aucklanders would have placed a strain on State house waiting lists in that area. In addition the high prices the houses would have attracted on the open market would have forced many pensioners to leave communities where they have lived all their lives. That possibility was unacceptable to the Government. 
Dr Wayne Mapp 
: Why will the Government not adopt the Hon John Tamihere’s suggestion about State house tenure which he rather pithily put when he said: “Everyone going into a State house understands that it is not a life entitlement because what you are doing is incentivising people to either cook the books or stay on their butts.”? 
Hon STEVE MAHAREY 
: Two comments were made by the Hon John Tamihere in relation to that. One concerned people being able to pass on tenure to a future generation. That of course has never been possible and is not possible now. In the matter of tenants they of course have a tenancy agreement. That tenancy agreement is there as long as they are good tenants. Their circumstances might change financially which may mean they will pay market rents and move out into the private sector. Alternatively we work with tenants if their circumstances change such as their family getting smaller to try to get them an alternative house in lieu of the existing one. 
Gerrard Eckhoff 
: Can the Minister confirm the Housing New Zealand report that Treasury could find no social policy objective is being achieved by the expenditure of $83 million and if so what worthy objectives has this Government identified that Treasury could not see? 
Hon STEVE MAHAREY 
: I can guarantee that tomorrow a very large number of older Auckland people who are pensioners will be telling the Prime Minister that they know exactly what the social objectives were. 
General Agreement on Trade in Services—Environmental Services 
5.  
JEANETTE FITZSIMONS (Co-Leader—Green) 
 to the  
Minister of Local Government 
: Has he been advised of any expressions of concern by local government about current negotiations on the General Agreement on Trade in Services; if so what steps is he taking to ensure the Government listens to Christchurch City Council’s request that no commitments are made in environmental services? 
Hon JIM SUTTON (Minister for Trade Negotiations) 
: 
 The Ministry of Foreign Affairs and Trade has been consulting with Local Government New Zealand for 2 years and with local authorities including Christchurch City Council. In response to the council’s request ministry officials travelled to Christchurch for a meeting last night. Only two people attended neither of whom were Christchurch city councillors. The options that will be put to Cabinet on an initial offer will include making no further commitments on environmental services. I do not intend to pre-empt Cabinet’s consideration of that. 
Jeanette Fitzsimons 
: Was this question transferred from the Minister of Local Government to the Minister for Trade Negotiations because the Minister for Trade Negotiations is not informing his colleagues of the true implications in their portfolio areas of the requests that have been made of New Zealand under the General Agreement on Trade in Services (GATS) as we saw yesterday with the Minister of Broadcasting who was unaware of requests that had been made to abolish the New Zealand Film Commission and Maori broadcasting funding? 
Hon JIM SUTTON 
: The question was referred to me because the matter is my portfolio responsibility. 
Nanaia Mahuta 
: Can the Minister explain the Government’s position on its participation in the GATS negotiations? 
Hon JIM SUTTON 
: The Government’s position is set out clearly in the discussion document. The Government has agreed to 10 guiding principles for New Zealand’s participation in these negotiations which I tabled last week. I would recommend that all members read them and in particular the statements on public health public education water local government and Maori. 
Gerry Brownlee 
: Will the Minister be taking some time to inform the Green Party that its unsympathetic attitude towards economic growth and trade liberalisation is not helpful to New Zealand’s prospects and will he also be telling his counterpart the Minister of Local Government that local government will not dictate New Zealand’s trade policy? 
Hon JIM SUTTON 
: The Green Party of course is a niche party and need not concern itself with the 75 percent of the New Zealand workforce employed in the services sector. It is this Government’s concern to enhance the opportunities for those 75 percent of New Zealand workers to increase their earnings by means of exports if they choose. 
Jeanette Fitzsimons 
: Given that last night the Waitakere City Council passed a motion expressing its concern at the lack of consultation on the GATS and hence we now have North Shore City Christchurch City and Waitakere City—together representing over 18 percent of the nation—plus Local Government New Zealand all saying that there has been inadequate consultation how can he possibly maintain that local government has been consulted properly over the GATS? 
Hon JIM SUTTON 
: The Government has been consulting intensively including with Local Government New Zealand for the past 2 years on these matters. It seems however that even if Local Government New Zealand passed the information on to its constituent members some councillors do not read the stuff. 
Jeanette Fitzsimons 
: Will the Minister accede to the request in the GATS submission by the Christchurch City Council asking the Government to abandon the 31 March deadline for the submission of New Zealand’s initial GATS offer in order to allow time for consultation; if not why not? 
Hon JIM SUTTON 
: The Government will do its best to adhere to the 31 March deadline because we have undertaken with our negotiating partners to do so. However the exact timing of our tabling of our initial offer will basically be set by our own convenience. 
Jeanette Fitzsimons 
: I seek leave to table the submission of Christchurch City Council to the Trade Negotiations Division Ministry of Foreign Affairs and Trade on New Zealand’s approach to the next stage of the World Trade Organization’s services negotiations. 
Document by leave laid on the Table of the House. 
Driver Licensing—Foreign Drivers 
6.  
RON MARK (NZ First) 
 to the  
Minister of Transport 
: What has he done with respect to tougher laws for foreign drivers and why? 
Hon HARRY DUYNHOVEN (Associate Minister of Transport) 
 on behalf of the 
 Minister of Transport 
: Officials are considering a range of measures to toughen up current laws relating to foreign drivers including requiring holders of a non-English overseas driver’s licence to carry at all times an accurate English translation of their driver’s licence or an international driving permit and invalidating an overseas driver’s licence when that driver receives a New Zealand driver’s licence. 
Ron Mark 
: Can the Minister assure the House that the 4-year-old girl who was run down and killed beside her father who was seriously injured was not run down by an unqualified incompetent non - English-speaking driver who obtained his driver’s licence by fraudulent means as was the case in the death of Yunfei Zhao? 
Hon HARRY DUYNHOVEN 
: That matter is sub judice pending a court appearance and therefore I cannot comment. 
Helen Duncan 
: Is the Minister considering implementing any measures other than those just detailed to deal with this problem? 
Hon HARRY DUYNHOVEN 
: Apart from shortly considering those proposals to amend the Land Transport (Drivers Licensing) Rule I have also asked officials at the Land Transport Safety Authority to report back on further options to toughen up requirements for foreign drivers. That report will be received within the next few weeks. There are proposals ranging from simple reminders such as a high-visibility sticker on the windscreen as used in places like Vanuatu to high-tech electronic devices. 
Pansy Wong 
: Will the Minister confirm that he will institute a requirement to verify that foreign drivers’ licences are not forged rather than just requiring that they be translated as recommended by the coroner in the inquest into the death of Yunfei Zhao; if not why not? 
Hon HARRY DUYNHOVEN 
: I am aware of recent media reports of alleged bribery and forgery. I am advised that no allegations of bribery have been laid with the police but there is an issue over forgery and that is being looked at as to ways of combating it. It is believed that there are very few forged drivers’ licences in circulation but they are a matter of real concern and we are doing everything possible to ascertain how that is happening. 
Ron Mark 
: In the light of the Minister’s answer could he tell the House why it is that since the coroner’s report was tabled and publicised in November of last year it has taken until now including further reports in the Christchurch  
Press 
 of corruption and bribery and further reports of accidents that involve non – English-speaking drivers who are suspected of having obtained licences illegally for this Government to even start to attempt to address the problem? 
Hon HARRY DUYNHOVEN 
: First of all I do not think the member listened to the answer I gave previously. There have been allegations but no evidence of bribery at this stage but that is not to say that steps are not being taken; of course they are. 
Ron Mark 
: In view of the reports in the Christchurch  
Press 
 in which a reporter stated that he went out and spoke to an interpreter who told him precisely what was going on will the Minister now take it upon himself to launch an inquiry in order to locate those interpreters and to follow up on what they have been stating and therefore to lay charges where they are deemed necessary? 
Hon HARRY DUYNHOVEN 
: The ministry and the Land Transport Safety Authority are aware of those allegations and have already taken action. The authority has translated the theory tests into a variety of languages including Chinese Mandarin Korean and Arabic. Applicants who speak those languages are no longer permitted to use an interpreter when they sit a test. The member says that nothing has been done but I suggest that he should just wake up and find out what has been done before he makes silly allegations in the House. 
Minister of Youth Affairs—Speech on Welfare 
7.  
Hon MURRAY McCULLY (NZ National—East Coast Bays) 
 to the  
Associate Minister of Maori Affairs 
: In light of his comments yesterday of his speech circulated to the Knowledge Wave conference “I stand by everything I said” what specific recommendations will he be making to achieve the “number of policy shifts” required to promote Maori economic development? 
Hon JOHN TAMIHERE (Associate Minister of Maori Affairs) 
: 
 I plan to work actively with my Cabinet colleagues in this area. 
Hon Murray McCully 
: Is the Minister appreciative of the many positive comments editorials and letters to the editor that have followed his speech and given his statement to TV3 that the speech had been “run past the Prime Minister and Minister Maharey” what does he understand to be reason that the Prime Minister has demanded that her staff vet his speeches in future? 
Hon JOHN TAMIHERE 
: My conduct and especially my throwaway comments were inconsiderate inappropriate and wrong. I regret them. I was wrong to say them and that is why I have apologised to the Hon Steve Maharey and the Prime Minister. 
Jill Pettis 
: Could the Minister please outline to the House what other positive initiatives exist to promote Maori economic development? Take your time.  
Mr SPEAKER 
: The member who is a senior member knows that that comment should not have been made. I ask her to withdraw it. 
Jill Pettis 
: I withdraw and apologise. 
Hon JOHN TAMIHERE 
: Within my delegations as Associate Minister of Maori Affairs I have responsibilities with regard to capacity building the Maori Trust Office the Poutama Trust the Maori Business Facilitation Service and Te Kapinga which is an inter-agency Maori development project. All of those promote Maori economic development. 
Rt Hon Winston Peters 
: When the Associate Minister said: “I stand by everything I said” did he expect the people of this country to take him seriously or what interpretation should we take when within minutes and hours he is apologising again; does he mean what he says or what? 
Hon JOHN TAMIHERE 
: He means what he says. [ 
Interruption 
]  
Mr SPEAKER 
: There will be somebody leaving the Chamber. There should be no comment during the asking of a question. 
Rodney Hide 
: In the light of the Minister of Social Services and Employment today ruling out doing any work on the policy shifts Mr Tamihere proposed in his knowledge-wave speech what is Mr Tamihere proposing to do now to justify his ministerial pay and position especially to the communities he claims he represents? 
Hon JOHN TAMIHERE 
: We just have to keep trying.  
Hon Murray McCully 
: In the light of the insistence of the Minister of Social Services and Employment in the House this week that he had academic standing in the area of social change has Mr Tamihere discussed with that Minister the use of the terms “statism” and “old left” to describe the Government’s approach to Maori development; if so what was the result of that conversation? 
Hon JOHN TAMIHERE 
: Under the careful guidance of our Prime Minister I have had a wonderful discussion with the honourable Minister in charge of the Ministry of Social Development and we are of one mind on going forward. 
Rt Hon Winston Peters 
: Does the Minister understand that if they and he are all of one mind and are going forward together then his comments and remarks in that speech are totally contrary to that; so I ask him again whether he will stand by what he said or will he resign? 
Hon JOHN TAMIHERE 
: I definitely will not be resigning.  
Pacific Islands—Terrorism 
8.  
LUAMANUVAO WINNIE LABAN (NZ Labour—Mana) 
 to the  
Minister of Foreign Affairs and Trade 
: What assistance is New Zealand giving to its Pacific Island neighbours to meet international counter-terrorism standards? 
Hon PHIL GOFF (Minister of Foreign Affairs and Trade) 
: 
 Following last year’s Pacific Forum and the passage of the Nasonini Declaration on regional security New Zealand is now assisting Pacific Forum countries by developing model legislation that addresses transnational crime and counter-terrorism issues. This legislation will be put to the forum leaders for their endorsement at their August meeting this year in Auckland. 
Luamanuvao Winnie Laban 
: Why is the provision of such assistance in the Pacific region important? 
Hon PHIL GOFF 
: It is important because as members of the United Nations those Pacific countries have an obligation to bring in counter-terrorism legislation under Resolution 1373. Many of the Pacific countries have not ratified United Nations conventions on terrorism and transnational crime and are having trouble developing legislation to do so. By helping them with model legislation we can help them meet their international obligations and in doing so we can help ourselves by protecting New Zealand from potential terrorists who would operate out of those jurisdictions if those protections were not in place. 
Dr Wayne Mapp 
: What practical steps is New Zealand taking to ensure failed States like the Solomons do not become havens for international terrorism given that passing model legislation in the Solomons might not have quite the desired effect? 
Hon PHIL GOFF 
: It is quite correct that model legislation is only one aspect. With regard to a State like the Solomon Islands the member knows well that New Zealand has worked very hard in that context particularly in terms of policing and good governance and we have a group up there. We also work with all the countries of the Pacific with regard to cooperation in policing immigration and customs. 
Hon Brian Donnelly 
: Can the Minister confirm that the major threat to visitors to the island of Mitiaro in the Cook Islands—and I believe the Minister has had first-hand experience of that threat—comes from the overwhelming physical hospitality of the local women? 
Hon PHIL GOFF 
: I can confirm that in two respects. Firstly they have a tradition of carrying members of Parliament or leaders of delegations on their shoulders on what is called a pata. They were really glad it was me and not Gerry Brownlee. Secondly the nature of the dancing was obviously a physical threat to many of the members who were reluctant to participate. 
Keith Locke 
: Will the assistance the Minister has referred to include strong representations to our Pacific Island neighbours to use full legal process in dealing with alleged terrorists particularly following the furore in Fiji this week over the sudden and arbitrary expulsion of Abdul Majeed a Sudanese cleric who has lived in Fiji for 18 years? 
Hon PHIL GOFF 
: It would be inappropriate to comment on that particular case and perhaps the member will not know all the factors that were involved but certainly we would encourage the Pacific Islands to use due process. We balance the need to take effective action against terrorist organisations with the need to protect the proper civil rights of ordinary people in any jurisdiction. 
Hon Peter Dunne 
: As New Zealand still has responsibility for the defence and foreign affairs of at least some of the Pacific States does our action in respect of anti-terrorism moves mean that we also have to accept responsibility for ensuring that those States are free of terrorist activity; if so how will we give effect to that other than through draft legislation? 
Hon PHIL GOFF 
: There are two countries where New Zealand has some at least theoretical involvement in defence and foreign affairs: Niue and the Cook Islands. The assistance we are giving in model legislation extends to those countries as well as to a wide range of Pacific Forum countries. Equally the assistance we give in terms of working with them at the South Pacific Chiefs of Police meetings the customs organisation meetings that are held regionally immigration and so on is designed to ensure that there are procedures in place that will minimise the ability of terrorists to work out of any of those countries. 
Housing—Nelson 
9.  
Hon Dr NICK SMITH (NZ National—Nelson) 
 to the  
Minister of Housing 
: Why are families in Nelson living in tents caravans and garages when Housing New Zealand homes have been empty for 12 months? 
Hon STEVE MAHAREY (Acting Minister of Housing) 
: 
 There have been no State houses vacant for 12 months in Nelson. The community group housing part of the organisation has had five properties in Nelson vacant for some time reserved for ex-residents of Braemar Hospital. These properties are not to be confused with State houses available to those on the Housing New Zealand waiting lists as they are used for the sole purpose of housing community group organisations. 
Hon Dr Nick Smith 
: Why in December last year again in January and even last week when I wrote to Housing New Zealand regarding the plight of the Grey family was I told that no houses were vacant; and does the Minister now seriously expect the House to accept the explanation that miraculously after the matter of the Grey family appeared in the media the housing needs of disabled members of the Nelson community were suddenly reassessed and changed or is that not just a classic example of what his ministerial colleague called “b-s-ing”? 
Hon STEVE MAHAREY 
: There are circumstances to do with that family that I will not air in public but I can tell members the reason the house came on the market at the time that it did. The Braemar house was reserved for five single men three of whom very recently became deceased. The property was returned back into Housing New Zealand stock because it was no longer needed by the Braemar organisation and that is what made it available at the time. 
Taito Phillip Field 
: Why does Housing New Zealand Corporation provide community group housing? 
Hon STEVE MAHAREY 
: Those outhouses offer essential accommodation for the use of hundreds of community group providers through Women’s Refuge IHC and other mental health and physical disability providers. Housing New Zealand Corporation has 1297 community group houses nationally and they are tenanted to 241 different community groups. The Government offers significant rent relief for those tenants and it is committed to increasing housing stock. 
Dr Muriel Newman 
: Does the Minister accept the analysis of his colleague the Hon John Tamihere that the problem underlying the Government’s State house policy that is causing the present housing shortage crisis is that tenants see their housing entitlement as a lifelong right rather than a respite facility; if not is it the case that he and the Hon John Tamihere are now of one mind on all matters of policy? 
Hon STEVE MAHAREY 
: No we cannot accept that analysis particularly in an area like Nelson where 100 percent of the tenants in Housing New Zealand Corporation houses are on an income-related rent—in other words they have a high level of need. The real problem is that in a place like Nelson 217 houses were sold by the National Party. It would have been very helpful to have them now. [ 
Interruption 
]  
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. I know that this is an environment for very robust debate and the matter has already been raised today but Mr Benson-Pope’s fashion of shouting out and pointing with his pen or his finger is an insult to members on this side of the House and I wish that he be asked to desist. As for the person next door to him she is not much better. As whips in their party they are meant to be setting some sort of standard in this House  
Mr SPEAKER 
: I am watching the two of them very closely. 
Paul Adams 
: Can the Minister confirm that there are at least two other single State house tenants in Nelson living in three-bedroom houses when they could be more efficiently placed in smaller units? 
Hon STEVE MAHAREY 
: No I cannot confirm details like that but if the member’s question implies what are we doing about that I can tell him that Housing New Zealand Corporation has a very active programme of talking to people who are in houses that might not be right for their needs and moving them to houses that can hopefully serve their needs better. 
Hon Dr Nick Smith 
: Regardless of whether those empty Housing New Zealand homes were intended for people with disabilities or for those with housing difficulty how can the Minister justify at least five houses being empty for a year in a community under extreme housing pressure; and does that not confirm John Tamihere’s concerns that a centralised bureaucratic approach to welfare and housing policy will not work? 
Hon STEVE MAHAREY 
: As the member knows—and as the people from Housing New Zealand Corporation who come to his meeting on Friday will point out—Housing New Zealand has a great deal of flexibility to respond to local issues. Those houses are kept vacant by agreement with organisations that are deinstitutionalising people or locating them in the community. That is why they have to be there. 
Local Government Act—Consultation Procedures 
10.  
DAVID CUNLIFFE (NZ Labour—New Lynn) 
 to the  
Minister of Local Government 
: What reports has he received of feedback on the consultation procedures in the new Local Government Act 2002? 
Hon CHRIS CARTER (Minister of Local Government) 
: 
 I have received a report that Southland local body leaders have vigorously endorsed the procedures in the new Local Government Act providing for consultation with the community including Maori. Southland Mayor Frana Cardno said that the Act was flexible and allowed individual councils to work out their own relationship with local iwi. 
David Cunliffe 
: Has he any concern that under the consultation provisions of the Local Government Act Maori groups are unduly influencing decision making at the local level? 
Hon CHRIS CARTER 
: No I do not. For example I have received a report that Michael Ross chief executive of the Southland District Council had said that claims that Maori now had a veto over council decisions were rubbish. The person who made those claims was none other than the local member the Hon Bill English.  
Gerry Brownlee 
: It might be of interest to the Minister to know that we wrote to all local authorities in January asking them how they would comply with the consultation processes in respect of Maori representation. Of them 38 said they hoped to become compliant at some time 28 failed to respond 13 had no idea at all what they would do two believed that they had already complied and one had yet to see the Local Government Act. Given the extraordinary level of disinterest and non-compliance with that Act why on earth does he stand up and spout about the successes of one small local authority at the bottom end of the country? 
Mr SPEAKER 
: The question was too long. It is “uninterest” not “disinterest”. 
Hon CHRIS CARTER 
: I am pleased to repeat positive reports to this House when I meet local body politicians all over the country. For example the Mayor of Nelson Paul Matheson said he was quite comfortable with the local government legislation. One interesting comment from Environment Southland chairman Ted Loose was that Mr English was talking a lot of rubbish in his claim that Environment Southland would be forced to have Maori constituency. 
Murray Smith 
: Is the Minister aware of concerns from community boards around the country that despite the spirit and intent of the Local Government Act to increase community consultation some councils have indicated their intention to axe community boards and what plans does he have to address those concerns? 
Hon CHRIS CARTER 
: Under the new Act decision making is essentially a local matter. However I would like to take this opportunity to say that community boards do an excellent job in engaging with communities which is of course what the spirit of this Act is all about. 
Rt Hon Winston Peters 
: I seek leave to table a media report this day that points out that because of NgatiWhatua demands $200000 will be required to source shells for a dotterel population in Auckland from the NgatiWhatua area rather than from Thames. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
District Health Boards—Deficits 
11.  
Dr LYNDA SCOTT (NZ National—Kaikoura) 
 to the  
Minister of Health 
: Why have district health boards recorded a combined deficit of $64 million in the last three months up $17.2 million from the quarter before and is this causing cuts to patient care? 
Hon Dr MICHAEL CULLEN (Leader of the House) 
  
on behalf of the  
Minister of Health 
: The district health boards’ actual hospital deficits of $60 million for the December quarter mean that they are within $5 million of plan—0.1 percent of the annual budget—for the 6 months to 31 December. Financing of those deficits has been agreed with the Government and they are therefore not causing cuts to patient care.  
Dr Lynda Scott 
: Why did the Hon Michael Cullen state in the Budget speech that he would tolerate a deficit of only $80 million for the 2002-03 financial year when the deficit has exceeded that in the last 6 months alone coming in at $101.6 million and is that not clear evidence that district health boards are failing financially and failing patients? 
Hon Dr MICHAEL CULLEN 
: No the district health boards are on target for the estimated deficit of $188 million for the current year which is less than last year and less indeed than in 1996-97. 
Steve Chadwick 
: Has Government revenue decreased for district health boards and therefore reduced their ability to provide services? 
Hon Dr MICHAEL CULLEN 
: No they have gone up $337 million. The Statistics New Zealand report made two major errors and that is now a matter for discussion with health officials so that Statistics New Zealand can understand the nature of health funding. Firstly it reported Government revenue. What it actually reported was the provider funding from the district health boards to the hospitals—a quite different form of funding. Secondly it missed the deficit support funding provided by Government and reported only one of the revenue streams. 
Heather Roy 
: How can we take her assurances to the public of New Zealand seriously when Orthopaedic Association president Professor Geoffrey Horne has publicly stated that it was deceptive and dishonest of district health boards and Health Minister Annette King to claim that they were reducing waiting lists when in fact they were manipulating figures; and why does she not admit that the switch to 21 district health boards has not improved patient care one little bit? 
Hon Dr MICHAEL CULLEN 
: In fact waiting lists have come down. At this time of the year I notice a tendency for people in the quasi - public sector to often make claims about underfunding. I have a suspicion that the Minister of Finance may be correct in believing that it has something to do with the fact that the Budget round occurs at about this time of year. 
Sue Kedgley 
: Given that long-term debt and liabilities in the health sector topped a billion dollars in December and the projections for long-term spending show worrying upward trends why is the Government investing a miserable 2 percent of the health budget in preventive public health measures that would reduce the underlying causes of illness and result in fewer of us ending up in our hospitals? 
Hon Dr MICHAEL CULLEN 
: In the light of that we should now agree to remove some of the committees she put into the legislation so that we could direct that money into public health and preventive funding.  
Judy Turner 
: Does the Minister agree that a potential solution to funding difficulties would be to allow and possibly encourage contracting out to both private and public health providers; if not why not? 
Hon Dr MICHAEL CULLEN 
: There is no evidence expressed from overseas that contracting out to private providers actually saves the State any money at all. But of course a range of providers is used with Government funding in New Zealand at the present time. 
Dr Lynda Scott 
: Is the financial crisis that district health boards are facing the cause of Grey Power New Plymouth saying: “The public health system is failing the elderly …. [who need] hip and knee replacements” of thousands of patients being sent back to their general practitioners as they are dumped off the waiting list and of cardiac waiting lists skyrocketing as patients die; if not what is causing the health cuts? 
Hon Dr MICHAEL CULLEN 
: Every one of those statements except the actual quotation is incorrect. Increased funding has been provided to a very very substantial extent and the projected deficit for this year which we are on target for is substantially lower than the peak achieved under the previous National Government in 1996-97. 
Dr Lynda Scott 
: I seek leave to table the  
Daily News 
 from today which states: “The public health system is failing elderly Taranaki people”. 
Mr SPEAKER 
: Is there any objection to that? There is. 
Dr Lynda Scott 
: I seek leave to table an article from the  
Southland Times 
 headed: “Cost cuts killing patients: surgeon”. 
Mr SPEAKER 
: Is there any objection? There is. 
School Zoning—False Addresses 
12.  
Hon BRIAN DONNELLY (NZ First) 
 to the  
Minister of Education 
: Has he received any reports that there has been an upsurge in students providing false or temporary addresses in order to gain enrolment at a school of their choice? 
Hon STEVE MAHAREY (Associate Minister of Education (Tertiary Education)) 
  
on behalf of the 
 Minister of Education 
: I have heard of anecdotal reports from individual schools advising that they feel people are cheating to get into their school zones. I have received fewer complaints this year than last year. There is no firm evidence on the extent of the problem but we have agreed to amend the guidelines to give greater advice and guidance to boards about the actions that they can take against parents or caregivers who are trying to manipulate the system. 
Hon Brian Donnelly 
: Is it not true that this phenomenon which robs genuine New Zealand students of placement in their preferred school is caused not by his zoning regulations but by this Government’s immigration policies? 
Hon STEVE MAHAREY 
: The member raises an interesting point from the point of view of education. That is why where particular problems have been raised the Ministry of Education is working with schools to ensure that they match their obligations under the enrolment legislation and manage the issues that are raised by having Asian students who may have second-language problems in their schools. 
Mark Peck 
: What is the Government doing to stop this possible cheating? 
Hon STEVE MAHAREY 
: The Education Standards Act of 2001 gives schools the ability to take action against people who are discovered to have indulged in that practice. This week the Secretary for Education has approved amended guidelines to assist schools in detecting false and misleading information that is given to them at the time of an application for enrolment. Those guidelines are in the process of being posted to schools and will also be on the ministry’s website. 
Hon Dr Nick Smith 
: Why would the Government take a hard line on parents who give misinformation about addresses that they subsequently disown when it is OK for the Prime Minister to have made a commitment 2 years ago and now to break it? 
Hon STEVE MAHAREY 
: Ignoring the last part of the question because it will just invite me to cause disorder with Mr Smith once again with regard to the first part of the question the Government does take a hard line on these issues. That is why we have reissued the guidelines and I imagine the member will look forward to reading them. 
Deborah Coddington 
: Can the Minister explain to the House why this Government wants to force children from poor areas to attend failing schools and leave wealthier parents free to choose a school; does not the zoning scheme mean school choice by mortgage capacity? 
Hon STEVE MAHAREY 
: The issue of how children get into schools of course has always been a vexed one. But this Government believes that children have the right to attend their local school. That is why we have gone for the policy we have gone for and we believe it is the right one. 
Television New Zealand Bill 
Third Reading 
Hon STEVE MAHAREY (Minister of Broadcasting) 
: 
 I move  
That the Television New Zealand Bill be now read a third time 
. This legislation demonstrates the Government’s commitment to quality public broadcasting and its awareness of the key role of public television. The primary value of these broadcasters lies in their contribution to the social and cultural wealth of our nation. This bill is a response not only to the legitimate demands of television-watching citizens but also to the broader expectations of those who recognise the cultural and social importance of television. The bill provides legislative guidance for the operation of TVNZ that is in keeping with the State television broadcaster’s central role. It provides for structural change. That change will support the organisation’s ability to effectively fulfil its new role as a broadcaster but it will also enable TVNZ to maintain a commercial focus in other broadcasting activities. Television New Zealand currently operates as a State-owned enterprise and as such it must put commercial returns above cultural or social imperatives. The Government has maintained the view that the form and structure of Television New Zealand must be changed if it is to be in a position to deliver on the charter that will guide its operation.  
The process of making this change and the decisions about the details of its nature were complicated by the mixture of activities undertaken by the organisation. When we first considered Television New Zealand’s structure it was recognised that the question of whether the transmission business should be separated from the television business was finely balanced. The main argument against separation was the transaction costs associated with making the split. The main arguments in favour of the separation were to do with increased transparency accountability and the need for the two arms to focus on their core business. Cabinet took a decision 20 months ago to defer consideration of a split for 2 years. We have now been able to reconsider that separation in time to incorporate its implementation in this bill effecting what I personally believe is a sensible and an efficient process of change and a sensible and an efficient structural outcome.  
We can see no compelling reason to operate two businesses of different natures and with different objectives in the same company structure. There is to be no overarching TVNZ group overseeing the operations of both TVNZ and the transmission-focused entity primarily BCL. Rather there will be a formal separation of those aspects of Television New Zealand a separation that given the organisation’s current structure will be able to be achieved in a relatively straightforward way. TVNZ’s transmission business is to be established as a State-owned enterprise and its television business will be set up as a Crown-owned company. A decision not to separate the businesses would have meant that the TVNZ group would have been inclined to extract revenues from BCL to fund the television business at BCL’s expense. That might not have been in the best interests of BCL. Nor do I believe it would have been in the best interests of the television business itself.  
Those who argue that BCL should be retained in the ownership of TVNZ appear to be influenced primarily by the effect on TVNZ of the loss of revenue it would suffer as a result of the separation. Clearly there will be a loss of income to TVNZ if it can no longer extract dividends from BCL but it will be far more beneficial to have ownership arrangements that maximise BCL’s commercial opportunities and for the Government to consider how and to what extent TVNZ should be compensated in order to fulfil its charter. We consider that such funding decisions are more appropriately made by the Government than by TVNZ’s directors.  
I would add given the desire for a change in TVNZ’s focus as a public broadcaster that it is questionable what benefits might have been derived from distracting members of the board and management of TVNZ on to matters associated with BCL’s operations and development as would have occurred under the previous structure. Since the original Cabinet decision the shareholding Ministers have approved BCL’s strategy of expanding its telecommunications operations. That will require a substantial investment and considerable attention from the board. A different mix of skills is needed for the governance of each business and that can be best achieved by separating the companies.  
Under this legislation the board of TVNZ will therefore be in a position to focus on its primary objective of implementing the charter while of course maintaining commercial performance. I consider that the achievement of this objective will be significant in the cultural and social life of New Zealanders and of New Zealand. The development of the charter is consistent with this Government’s policies of supporting New Zealand culture and emphasising the importance of a skilled and an educated society. The charter has been developed in the context of cultural recovery. It is informed by our confidence in the cultural distinction and the abilities and aspirations of New Zealanders. Its implementation will mean that the television broadcaster owned by the people of New Zealand will play an enhanced role in supporting the needs of an informed nation. Public broadcasting should clearly provide for the interests of all its audiences not just the audience preferred by advertisers. New Zealand viewers are not simply consumers and the charter makes explicit their entitlement to quality television programming across all content and in relation to both channels that has previously not been available.  
There are those who purport to detect in the charter an attempt by the Government to direct what New Zealanders can watch even as their colleagues make accusations about it being vague or having no real meaning. The TVNZ charter is not vague and meaningless. Neither is it a sinister piece of social engineering. Like the charters of other leading broadcasters around the world and like the Radio New Zealand charter introduced by the previous National Government—but members may remember largely written by me—on which it is partly modelled it is broad and indicative not prescriptive. Without dictating programmes it ensures that we will have a full range of interests provided for. Rather than denying choice it seeks to create the kind of choice that the market alone is incapable of creating.  
In my role as Minister I have no greater ability to direct the content of TVNZ programming that I or my predecessors or the Government in general have had in the past. The bill in fact reinforces the importance of editorial integrity. It does not intrude on independence. It does however set up the Government’s expectation that TVNZ will establish meaningful performance measures and report regularly to the Government. The process of developing those measures is already under way and I know that TVNZ is looking at the best practice of public broadcasters elsewhere. I acknowledge TVNZ’s willingness to do that.  
The bill will also I believe establish TVNZ in a leadership role within the broadcasting sector a role that as the State television broadcaster it is most appropriate that it should play. Amendments to the legislation have underlined that status and I look forward to seeing quality and innovation being the hallmarks of the organisation.  
In conclusion I thank United Future for supporting the separation of the television and transmission businesses within TVNZ and I acknowledge the role played by the Greens in amending the charter particularly in the area of screen violence. As the Minister of Broadcasting as a participant in New Zealand society and as a viewer of public television I look forward to seeing the public television broadcaster flourish as a Crown-owned entity no longer restricted to pursuing purely commercial objectives. I look forward to its response to the direction provided by the charter and to the cultural and social benefits that will result. As a final comment I thank the Hon Marian Hobbs the former Minister of Broadcasting who worked very hard on this bill. It is a pleasure to deliver it and I acknowledge the hard work that she did in the first place. 
KATHERINE RICH (NZ National) 
: 
 There is a question that has plagued many a previous Minister of Broadcasting over the years and it is this: how does the Government create a small publicly funded publicly owned television business? I have the answer to that: give a big one to Steve Maharey and Marian Hobbs. Over the last few years we have seen the Television New Zealand company becoming a mere shell of its former self. When National left office as the Government this company was worth $1 billion. It had a terrific capability to fund a large amount of local content. As a result of the last 3 years of dawdling messing around with the business vague statements and poor management that company is no longer the jewel in the State’s crown. Once valued at $1 billion I imagine that TVNZ would probably be worth less than that now. It is fast becoming a sad flat little company.  
This bill is a backward step for broadcasting for a number of reasons. One of the main reasons is that it reintroduces politics into the broadcasting industry to a level not seen since the 1970s. By making TVNZ a Crown-owned company we will see political interference in the media on a greater scale than ever before. We have seen 3 years of dawdling to get this far. This is the fourth year that the Government has been talking about the charter and very little progress was made in the last few years. Average progress was the equivalent of less than one word a day. Marian Hobbs herself confirmed that in the last 3 years there had been little change on screen. Over the last 3 years TVNZ has lost staff. People have become burnt out as a result of some of the interference that we have already seen at TVNZ. The station itself has lost income. Advertisers became fazed by the fact that they could hear there were to be changes made to the business so that would have affected long-term advertising contracts. Of course we have seen the decimation of value that I have mentioned before.  
But in the meantime we have seen no change in what has been shown on television. Yes there have been a few shows that have been creatively described as “charter friendly” in the interim but we have seen no programming. In fact we have seen a number of arguably non - charter-friendly decisions made—such as the axing of  
Backchat 
 the axing of  
60 Minutes 
 and the appointment of a reality television manager who is charged with making more format shows than were made previously.  
How much change will we now see? If one listens to what is said by members on the Government side of the House one imagines there will be a great sea change in programming. I question how that change can happen when all that the Government has come up with is $10 million plus GST. That is not even enough to produce a historic drama; that is not even enough to add many documentaries to those we see on screen. In fact on the day when the Minister announced that $10 million plus GST Annette King came out and described a similar sum as being “a mere trickle”. I think she was probably the Minister who was being more honest about the amount that has been put behind this charter. One simply cannot produce programming with such a small amount of funding. I suspect that most members in this House support a greater level of local content. We all like to turn on the television or the radio and to see or hear stories that reflect our country. But one cannot produce that with nothing. It costs money to make those programmes and the Government simply has not backed its rhetoric with funding.  
There is another reason that we are concerned about this bill. The direct funding of TVNZ totally undermines the contestable funding process that was put in place by National. If Governments want to get involved in the purchasing of local content that can only be done fairly through a contestable method—that is by using New Zealand On Air. If the Government is to continue the direct funding of TVNZ that totally messes up the process of funding good ideas as opposed to funding individual organisations.  
Let us talk a moment about political interference. Over the last 3 years we have already seen an increase in the way that the Government has started to interfere with the programming on television. I have spoken to many people within the industry who tell me there have been many occasions when news stories in particular have been pulled because there have been concerns that if TVNZ is critical of the Government it will not be well received on the ninth floor of the Beehive. I wonder why the John Tamihere story was pulled from the TVNZ news line-up last Friday. That is not a new thing of course because there has always been a Government involvement in radio. A particular interview about radio with the then Minister Marian Hobbs on Radio New Zealand was suddenly pulled from the schedule because of its close proximity to the last election. That was quite an interesting interview in itself. Marian Hobbs confirmed a number of things. She confirmed that TVNZ already in effect had a charter within its statement of corporate intent—something that I had argued for a long time. She also confirmed that there had been very little change in the programmes scheduled during the previous 3 years but more important she told the country what the real plan for TVNZ was.  
The Government’s real plan is to turn TVNZ into the Radio New Zealand of the television world. I remind members that the listenership of Radio New Zealand usually sits at between 5 and 10 percent—10 percent on a good day. At the moment over 70 percent of New Zealand viewers tune into TVNZ programmes. It is a mainstream medium which serves a wide range of New Zealanders. So increasingly if there is a move to minority-channel programming which is the express aim of this charter we will see a decline in viewership.  
The next point is that it is not clear how compliance with the charter is to be measured. The Minister can say that he thinks the charter provides a clear set of objectives but I question whether he has actually read it. If one reads the charter one learns it is all about motherhood and apple pie—just statements about how we want to see diversity on television a wide range of programming and about how we are supposed to have programmes that reflect all sorts of New Zealanders. We know that that was already in TVNZ’s statement of corporate intent. But the question is how that will be measured. The public has an expectation that it will be measured independently but that is not the case. TVNZ will decide how it will implement the charter and then it will measure that itself. So if TVNZ decides that one charter objective is to screen one drama and it succeeds in doing that then it can tick the appropriate box. I do not think that was the intention that the public had when the Government embarked on this process.  
I think there were great expectations that we would see a huge amount more of local content on TVNZ. But one simply cannot fund that when one has declining profits a financial deterioration of the company and a small amount of funding being handed over by the Government. A further point on political interference is that if TVNZ is to have to go cap in hand to the Government every year to get funding how will it be really objective about the performance of this Government? The truth is that TVNZ cannot be objective. TVNZ will be so nervous that money will be withheld from it that it will be more than cautious when it comes to developing its programmes.  
The other ironic thing in all this is that this legislation has been written and is being implemented by a bunch of people who do not even watch television who do not even have a love of television and who I am sure think spin doctors are just a subcommittee of the “Burns unit”. Probably they have not sat down and watched what most Kiwis like to watch in a very long time. 
Hon Roger Sowry 
: Do your  
Kath and Kim 
 impersonation! 
KATHERINE RICH 
: I will not; I will leave that for later. But I would say that members on the Government side of the House probably do not even know who Kath and Kim are. They probably think they are press secretaries for Marian Hobbs!  
We all want to see good quality television on screen but the point is that one cannot continue to produce programming if one does not pay for it and the Government has not stumped up with the cash for it. 
LARRY BALDOCK (United Future) 
: 
 In rising to speak to the third reading of this bill I say it is with some pleasure that United Future is able to see the bill come to this point in the House and that it was able to find a way forward through negotiation with the Government so that this bill did not sit and languish for ever on the Order Paper. Many people throughout New Zealand have been looking forward to an improvement in their television service and in their television programming and we believe that this bill will offer something of an improvement to viewers. I want to pay a particular commendation to my colleague Marc Alexander who has worked very hard through the Commerce Committee and the Committee stage of this House and has made many positive contributions to the bill. Television plays an important role in the lives of New Zealanders and we do look forward as we support the third reading of this bill and its passing into law to the delivery of some vast improvements for the public of New Zealand. 
BARBARA STEWART (NZ First) 
: 
 New Zealand First is opposing this bill despite having an amendment to the charter requiring that Television New Zealand reflect programming of a family nature to promote the development of family life in New Zealand. New Zealand First believes that free and open communication is the foundation of the democratic State and that the role of the Government in broadcasting should largely be confined to essential regulatory matters realising that there are issues relating to community standards access impartiality and diversity that necessitate intervention. This bill does not give us that certainty in any way—rather the reverse. 
We are pleased to see an amendment to the charter put by the Green Party that focuses on the reduction of violence in television programmes particularly those for children. New Zealand First supports that amendment wholeheartedly. 
New Zealand First believes that this bill is a backward step for broadcasting rather than forward-looking as we have heard from the other side of the House. New Zealand First has concerns along with the general public that the Government will manage the content of what New Zealanders will see on television and that the Minister of Broadcasting in spite of the clause on ministerial and editorial independence will totally manage our television. For example we saw that with the John Tamihere statement last Friday. It was not played at all. We do not believe that it is the role of any Minister in any Government to manage our television viewing or edit daily events. To have a smoke and mirrors policy such as this is not advantageous to New Zealand. 
New Zealand First also has concerns about the charter. Although this charter appears to be very politically correct we do not believe that it is the role of the State to feature television programming that contributes towards “spiritual and ethical development that reflects the diverse beliefs of New Zealanders”. New Zealanders have always been free from any interference by the State in their spiritual beliefs and it is indeed a very sad world if we have to expect television to carry out that task. It is interesting to note that this charter is to be reviewed every 5 years which while maintaining a flexible approach means that the emphasis may change with subsequent Governments. 
New Zealand First questions the money that will be spent on providing the Maori television programmes mentioned in the charter. Although we appreciate that there should always be some Maori cultural programmes on Television New Zealand why have many millions of dollars been spent and why do they continue to be spent on setting up a Maori television station and programmes if that kind of programming will also be heavily scheduled on Television New Zealand? Is this acknowledgment that the Maori television channel will not be providing what New Zealanders require or want? 
As a new member I am puzzled as to why the Minister has not taken a call during the passage of this bill to explain why Television New Zealand is to be split into two separate companies separating off the profitable transmission arm Transmission Holdings Ltd. The separation off of this company and its landholdings—in some cases they are small and in other cases they are not so small—makes it an asset that could easily be sold off to overseas companies. It appears that it is another one of New Zealand’s assets that we will sell cheaply and have to buy back at a grossly inflated price when many millions of maintenance dollars are required. Unfortunately the history of asset selling does not bode well for New Zealand or New Zealanders. New Zealand First believes that strategic asset sales should cease. If considered appropriate and only where absolutely necessary management by private contracts under public ownership should replace the policy of State asset sales. 
This charter states that Television New Zealand will observe a code of ethics that addresses the level and nature of advertising to which children are exposed. The increasing rate of diabetes and obesity among our New Zealand children and young people can be partly attributed to the amount of television advertising of fast foods. New Zealand First is concerned to know whether the health aspect of New Zealanders or advertising revenue will be a priority for Television New Zealand. Thus far the Minister has not clarified this point in any way. Television New Zealand will have to come to the Government for funding and of course the commercial aspect of fast food advertising must come into consideration. The fast food industry is a substantial spender on advertising and it is to be hoped that the health of our nation will be considered. 
The charter for Television New Zealand needs to be regularly audited and the compliance measures need to be developed. I know that the Minister said that there is a company already concerned with this aspect but we are uncertain as to how this will continue in the future. 
Again we are quite concerned as to why this bill should be passed at all. It is quite surprising that the Minister has not taken a call at all on this aspect to enlighten us during the course of the debate. New Zealand First believes that if the Government’s aim is to increase the amount and the quality of local television programming this could be addressed through increased funding through New Zealand On Air rather than unnecessary restructuring which diverts the total funding away from programming. New Zealand First questions this change particularly in the light of the low operational funding that Television New Zealand has been allocated. We will not be supporting this bill. 
JILL PETTIS (NZ Labour—Whanganui) 
: 
 I am very pleased to support this bill for a variety of reasons. One of the things that we will be able to experience now as a consequence of this charter is to see minority peoples and hear minority voices on our television more often than we have to date. New Zealand is a rich and diverse community and it is important that we see that reflected on our television. This bill will also enable us to have a platform for informed public debate that is not driven by commercial imperatives. It is important to have a participatory democracy and our television service as one of the main mediums of communication is important to that. 
As I listened to the speeches from Opposition members through the Committee stage it was obvious to me that their knowledge of New Zealand history is only about 5 minutes long. I have said in a number of interjections when this demon of “State control” has been mentioned by Opposition members that they want to get into their history books and see what has happened in New Zealand in the past. 
Hon Murray McCully 
: She’s showing her age. 
JILL PETTIS 
: That member says I am showing my age. Does he not even know what happened to Uncle Scrim and “The Friendly Road”? He was taken off radio on the eve of the general election that saw the election of the first Labour Government. Talk about State control! It was a conservative Government that did that so the member’s own party history is not very pure either. 
Hon Murray McCully 
: What about  
Kath and Kim 
? 
JILL PETTIS 
: As for New Zealanders being able to see themselves on television there was an interjection from that member: “What about  
Kath and Kim 
”? Anybody who has watched that programme knows that it is not a New Zealand programme at all. It is an Australian comedy—a quite good comedy but it is certainly not about New Zealand at all. 
In response to Mrs Stewart’s comment about why we are bothering to have a Maori television channel when we already have Maori programmes broadcast on television today what about our having Television One TV2 and TV3? That situation has prevailed for a long time. How come it is OK for one group to have a selection but not another? So I take issue with the member’s comments about that. 
I am pleased to support this bill. It will be good for New Zealanders when we can have informed debate on our television instead of crass commercialism all the time. 
DEBORAH CODDINGTON (ACT NZ) 
: 
 I rise to speak against this bill in the third reading. I speak both in sorrow and in anger against this bill. What this Government is doing to Television New Zealand is appalling. How did we get to this? How did we get to this stage where we have come up with this sort of clone this hybrid which is not public broadcasting and is not commercial enterprise? 
Let us go back a bit further than 5 minutes in history. This bill stems from the personal desires of a few of the politically correct members of the Labour Government—the mountain-climbing tree-hugging  
The Sound of Music -  
watching socks and sandals wearing yodellers who want to force New Zealanders to watch what they think is good for them: a diet of nature documentaries endless reruns of films like  
The Color Purple 
 John Pilger documentaries and peace marches. [ 
Interruption 
]. As that member Jill Pettis said it is about time that New Zealanders watched on television what was good for them. I look forward to the day that we have a “Breakfast Bill” where New Zealanders are forced to eat for breakfast what is good for them too because that is about where we are going. 
As I am on the subject of food I want to say I cannot believe other members of this House who take no responsibility for their own actions and who say that if people get diabetes it is not their fault for drinking Coca-Cola and eating junk food—it is the advertisers’ fault for advertising them on television. Good grief! Whatever happened to taking control over what one eats and drinks? We should stop blaming everyone else. As for children parents have a responsibility to watch what they eat too. 
On Saturday this charter apparently comes into effect. Look at the nebulous ill-defined nonsense that we have in it! It states TVNZ has to be concerned with Maori interests. TVNZ will have to fulfil the objective of personal development. When I ask was the State ever responsible for the personal development of people? The State is responsible for protecting people’s lives and protecting their property not for directing where they should personally develop. The charter does not even state where they will personally develop; it might be backwards for all we know. Mass audience programmes must also deal with minority interests. What on earth does this mean? Does this mean that the  
Holmes 
 show which is a mass audience programme must deal with minority interests? What are those minority interests? Does it have to give voice to something like the “Takaka Floral Society” or the “Parliamentary Wimmin’s Knitting Club”? As for spiritual development this Government callously casts aside the constitutional conventions of the separation of powers. 
Be warned this is coming up again in the Radio New Zealand Amendment Bill The State I remind members of this House is meant to be secular. 
What was wrong with TVNZ that this Government had to fiddle around with a State-owned enterprise that was making $60 million a year and as I said turn it into a Crown-owned company that has already sucked up $10 million of taxpayers’ money to implement the charter? What was wrong with leaving it to New Zealanders to exercise their right to push the off button? 
Labour Governments and I am afraid National ones too should hang their heads in shame that over the years they have appointed tame chairs to the board of TVNZ who have used TVNZ as a cash cow—$60 million in 1999. There was nothing in the State-Owned Enterprises Act or in TVNZ’s statement of intent that stated that $60 million had to be returned as a dividend to the Government. TVNZ could have given the Government $1 million and kept $59 million to make good programmes. 
And who are we going to see on the TVNZ board now? That will be interesting. What assurance can we have from this Government that there will be no political interference from the board? Can United Future assure us that no deal has been done whereby very very close friends of United Future are appointed to the board in return for that party’s support for this bill? Will Craig Boyce the current acting chairman a director of Industry New Zealand and a very very close friend of Jim Anderton be made chairman? Jobs for one’s mates? Cronyism? That is how Governments interfere and manipulate the media and that is why the State should not own the media. Stephen Franks managed to get an amendment passed thank goodness that strengthens the sanctions against political interference. But political interference I say has already occurred with the introduction of this charter. 
The bill is also a document that sets out this Government’s politics of envy. If we look at the clauses that deal with financial reporting we see that the remuneration and other benefits of employees must be stated. This type of clause I say is the “anti – Paul Holmes” clause. This is the Ross Armstrong influence. He was the Prime Minister’s very very close friend—not any more—who rollicked into the position of chairman assisted by his travelling companion Kristy McDonald and said that Paul Holmes earned too much money. Paul Holmes gets up at 4 o’clock in the morning and works until 8 o’clock at night which people on that side of the House probably would not know about. How much is too much money? That is what this clause is about. It is about lopping the heads off tall poppies. Well Paul Holmes had his revenge when he retaliated by describing the chairmanship of Ross Armstrong as creating a climate of fear and it was true. What went on when Ross Armstrong was the chair of TVNZ what he did in terms of morale was the worst kept secret in town. It shows this Government’s cavalier disregard of the integrity of a once-great media company. 
So what should be done? As I said the State has no business owning television broadcasting. The State does not own newspapers and neither should it. I would hope there would be an outcry if the Government tried to nationalise the  
New Zealand Herald  
or the  
Dominion Post 
. How do the employees of TVNZ feel now that they face a future in which there is a high probability they will be Government employees? Does this Government care about that? Has it even thought about it? I do not hold out huge hopes that TVNZ will continue to be supported solely by advertising revenue because if I were an advertiser and I read that charter I would run screaming from the room. 
This Government does not like business. It hates private enterprise. It forgets that advertisers are actually private businesses. But does the charter even mention business? No the charter talks about supporting the arts and featuring sport educational and personal development. There is absolutely nothing in that charter that deals with free enterprise and entrepreneurship. What about business programmes? Are they not as important as personal development? What about programmes on capitalism? And before Government members start criticising what I say I ask them to use their imagination for a moment and imagine if the ACT party were in Government and we drew up the charter. I am sure they would run screaming from the room too. 
The Minister of Broadcasting proudly said that TVNZ is no longer just commercially driven. I say that there is absolutely nothing wrong with media organisations being commercially driven. All that means is giving customers exactly what they want.  
North and South 
 magazine 
is hugely successful. It is totally commercially driven and it features serious current affairs articles. For those who believe that television cannot do the same I have just three letters—CNN.  
Hon JUDITH TIZARD (Associate Minister for Arts Culture and Heritage) 
: 
 It is a great pleasure to rise in support of this third reading of the Television New Zealand Bill. It is a bill that New Zealanders have been calling for for a long time. We had accusations from the last speaker that this bill is about political interference and the politics of envy and she immediately stumbled into personal abuse and smearing everybody who disagrees with her politics. That is a perfect example of why politicians should not be running the news media. However I say to her and to all of the pathetic market-driven wonks in the ACT party who believe that the market is everything that New Zealand has a history of having a mixed economy. There are some things that the State does because the market does not deliver them and because citizens are entitled to services. 
Katherine Rich 
: Don’t you ever watch television? 
Hon JUDITH TIZARD 
: Of course I watch television. 
Katherine Rich 
: What’s your favourite programme? 
Hon JUDITH TIZARD 
:  
Kath and Kim 
 actually. It is absolutely ludicrous to suggest that Government members are somehow or other out of touch. We were elected handsomely only 8 months ago because this Government is in touch with what people in New Zealand want. This bill will change the Government’s involvement in public television for the better. It will change from being a purely profit-driven State-owned enterprise to a public broadcaster that balances commercial social and cultural values. 
As Associate Minister for Arts Culture and Heritage I would say that I have heard more people in support of this legislation than for many bills. Some people who want to go back to the days when Bill Birch balanced his Budget by sucking TVNZ dry by insisting that TVNZ cater to the lowest common denominator—“And if they want current affairs let them buy it!” says Marie Antoinette from the ACT party! For good reason this legislation is broadly supported in this House and in the country. 
SUE KEDGLEY (Green) 
: 
 First of all I want to make it clear that unlike the ACT party the Green Party passionately supports publicly owned public service television in New Zealand. In our increasingly globalised world where our sovereignty our culture our identity and so forth have been steadily eroded we think it is absolutely crucial that we have a strong independent publicly owned television broadcaster that has a very specific mandate and purpose to promote our New Zealand identity New Zealand programmes and so forth on television which after all is the most powerful medium of communication.  
Frankly we think it is disgraceful that on one of our publicly owned channels TV2—the channel I might say that our young people and children watch—there is only 13 percent of New Zealand programmes and there is 87 percent of foreign programmes. This means that our children are growing up learning more about the values and life and attitudes in Los Angeles than they do about their own communities. That is why we passionately support any move that will give a new direction to TVNZ and require it to show more New Zealand programmes. It is the reason that we support the transformation of TVNZ from a predominantly commercially focused State-owned enterprise into a Crown-owned company and why we support the concept of a charter which we hope will give a new direction for TVNZ so that it is editorially driven rather than just ratings-driven as it has been for the last decade.  
The need for having a strong publicly owned television channel is all the more critical as we enter the digital era which pundits are predicting will result in increasing fragmentation of television markets into niche channels with increasing concentration and domination of the broadcasting industry by a small number of large mega-companies that own digital platforms and an environment that will become increasingly hostile and difficult for commercial free-to-air broadcasters. They will find themselves with increasing fragmentation declining audiences and so forth.  
If this is the era that we are to enter it is essential that we try to ensure that TVNZ in this risky and uncertain environment is as strong as financially robust and as financially independent as possible with a healthy income stream the ability to earn revenues from various activities and as much leverage as possible. That is why while strongly supporting the charter in this bill we are totally opposed to the last-minute amendment that arrived like a bolt out of the blue after the select committee stage had ended to split off the transmission arm from TVNZ—the revenue-generating arm of BCL that the previousMinister of Broadcasting described as a wonderful golden goose. It was the transmission arm that quietly contributed money and funding over many years. Some of that money went into New Zealand programming.  
We believe that to separate off that transmission arm will weaken and not strengthen TVNZ. It will shrink the potential revenue base of Television New Zealand eliminate the option of cross-subsidies from the transmission arm and most unfortunate of all it will make Television New Zealand increasingly reliant on advertising revenue at the very precise moment in its history when we are saying: “We don’t want you to be advertising and ratings-driven. We want you to be editorially driven.”  
When looking at this splitting off of the transmission arm the Government asked the accounting firm Arthur Andersen and Co. to investigate the case for splitting it off. Arthur Andersen contemplated this for about 6 long months. In the end that company said that there is no compelling case for separating it off because we could do all of those things that the Minister of Broadcasting said he wanted it to do under the existing arrangements. The Government wanted the transmission arm to focus on its transmission business and get on with it. That is exactly what the structure in the original bill allowed it to do. That was precisely why it was set up with a separate board to focus on the transmission business.  
Some members over here have suggested that the bill has wide support. I want to tell them what the Screen Producers and Directors Association had to say about the prospect of separating off the transmission arm of TVNZ: “We believe the split will have a catastrophic impact in the long term. It will irrevocably damage TVNZ’s potential to remain a strong national presence. We cannot see how such a move will do anything other than hobble TVNZ’s potential to deliver on charter obligations in a meaningful way.” That is what the production industry thinks about this move. The only possible logical explanation for separating it off in this way would be if one were readying it for sale. We can only assume that the hidden agenda of the Government is to ready the transmission arm for sale. 
In our view because of the way the bill has ended up with this last-minute amendment to separate off the transmission arm we have a bill that sends conflicting and indeed schizophrenic messages to Television New Zealand. It is a bill that on one hand gives and on the other hand takes away. On the one hand the bill gives Television New Zealand this new mandate that we will now have new programmes—New Zealand minority spiritual—and a new direction and requirement to make all those local programmes and on the other hand we have taken away the revenue base with which to make those programmes. We have shrunk the revenue base of Television New Zealand and made it more not less dependent on advertising revenue.  
How can Television New Zealand deliver its mandate and make more New Zealand programmes if there is no money to make them? What will happen if the advertising revenue shrinks in the next few years—as is predicted and as all the pundits say? Where will the income come from then? What will happen if a future Government removes the direct subsidy of $10 million that the Government has projected for the next few years? Frankly we like Katherine Rich think that $10 million is a tiny amount on which to base the implementation of the charter. It is a pitiful amount. But what will happen if even that pitiful amount is taken away by a future Government—as it most certainly will be if a National Government ever gets back into power? National has already told us that it will be taking away the subsidy so where will the cash-strapped Television New Zealand turn then to make all of those charter-driven New Zealand programmes?  
The other issue with which we are seriously concerned is the potential that a direct subsidy will inevitably mean political influence. At the back of the mind of the chief executive of Television New Zealand and the board will always be that nagging anxiety about that $10 million direct grant from the Government—if they come up with a programme that the Prime Minister intensely dislikes or if the Government dislikes the election coverage in an upcoming general election. In the back of their minds will always be the question: “Will we find that our subsidy will be reduced next year?”. We need only cast our minds back to 1975 when Mr Muldoon refused to raise the licence fee and made it clear that it was a way of punishing broadcasters for expressing independent or dissident views. The Government has a direct grant that we can hold over Television New Zealand—“He who pays the piper plays the tune.”—and always in the back of those executives’ minds will be that direct grant their concern about not alienating a current Government and the effect that that alienation has for the political neutrality of Television New Zealand.  
We are absolutely delighted that two of our amendments to the charter have been accepted. One requires Television New Zealand to take a leading role in implementing the code of violence. We have excellent codes on violence; it is just that they are completely ignored and no one has done anything to implement them. So now Television New Zealand has an explicit mandate not to show programmes with gratuitous violence etc. and we will be watching that very closely. The second amendment supports the independent industry in New Zealand because already the cash-strapped Television New Zealand casting around for extra revenue is looking at independent producers. It is trying to fleece revenue from independent production houses.  
Hon PETE HODGSON (Minister of Energy) 
: 
 I want to speak briefly to this legislation and to ask Sue Kedgley who has just resumed her seat to reflect please on whether Radio New Zealand or Concert FM are subject to political interference because they have no advertising revenue. Would she please reflect on whether it is possible to have no split between transmission and broadcasting yet have Television New Zealand as a Crown-owned company. No one I think is suggesting that BCL Ltd should be other than a State-owned enterprise. I say about the ACT party contribution that if we have a charter come into place that means that Television One is more different from the other main providers do we not therefore have better choice? Why might the ACT party argue against that? 
Hon MURRAY McCULLY (NZ National—East Coast Bays) 
: 
 This is a sad day for New Zealand broadcasting. It is a day on which we see in Television New Zealand the era of the bow-tie-and-ballet-tights brigade being ushered in and the day when we see the framework established for our State broadcaster to become a simpering and compliant player in the New Zealand media.  
The third reading stage of a bill is of course the opportunity for members to recount the previous consideration of the legislation in its various stages. That is quite a saga because when this bill was originally introduced we had a very different structure in Television New Zealand. We had a structure consisting of a parent board and two subsidiary boards which was the result of some very considerable work and expense. At that stage the Prime Minister’s very good friend Dr Ross Armstrong was the chairman of Television New Zealand and he went to very considerable lengths to make sure that the structural change sought by officials was substantially modified in order to give him the position of absolute power he demanded. So at very considerable expense a major consulting firm and consultants were wheeled in and the former chairman’s very good friend Kristy McDonald QC was wheeled in to deliver at significant expense to Television New Zealand an opinion about how a format could be devised that would see a parent board and two subsidiaries and why it would not be too bad an idea for the chairman of Television New Zealand to become the chairman also of the two subsidiary companies.  
That was a structure that was put in place in the original bill for one reason and for one reason only—to meet the requirements of the previous chairman the Prime Minister’s very good friend Dr Armstrong to be the chairman of everything that moved in the State broadcaster. This was the “Ross Armstrong structure” in the original bill. Why would it suit the Government so much to accommodate Dr Armstrong’s requirements? Well members should ask themselves about the answer to that question—it suited the Government very well to have its very good friend in the controlling position of every component of the most powerful medium in the country. Miraculously Dr Armstrong left us this bill came back from a select committee and a Supplementary Order Paper emerged that was very different from the format that was introduced. Miraculously the United Future party decided that it would accommodate the Government’s wish to see this particular measure through the House.  
The Associate Minister for Arts Culture and Heritage told us that this bill enjoyed broad support in the House. I want to correct her on that; that is very far from the truth. The simple facts of the matter are that the Greens have told us today that they oppose the bill the ACT party has told us it opposes the bill the New Zealand First Party has told us it opposes the bill and the National Party has said it opposes the bill.  
I want to ask the question again at this final stage: why is it that the United Future party is the only party prepared to help the Government get this bill which will distort the media through the House today? The answer is because it has been bought. 
Mr SPEAKER 
: The member knows he cannot say that. He will withdraw that comment. 
Hon MURRAY McCULLY 
: I withdraw. The members sitting in the House who represent United Future have another chance today to answer the question I asked them at the Committee stage. Have they been promised any directorships on either of the two entities that are being formulated as a result of this bill? Will any United Future persons miraculously pop up on either of those two boards? [ 
Interruption 
] Are those two members saying that that will not happen? Is Mr Smith telling me that that will not happen? Mr Smith is not telling me that it will not happen because Mr Smith knows very well that it will happen. Mr Smith knows that once this bill has been passed we will no doubt see an announcement from the Government that shows what the price tag has been to get United Future to vote for this bill. I say to those two members— 
Hon Judith Tizard 
: I raise a point of order Mr Speaker. You have already pulled up this member for saying that another party’s vote has been bought. He is now saying that we will know the price tag for this vote. I cannot accept that that is within the Standing Orders. 
Mr SPEAKER 
: The first comment was outside the Standing Orders. The second one is right on the edge but I thought I heard Mr Smith’s comments being made very clearly to the member. I ask the member to continue. 
Hon MURRAY McCULLY 
: I am a quick learner. I have a long enough memory to be able to recall in a week or two’s time when the board members are announced the discussion we have had today and on the previous phases of the bill. If there are United Future people—people associated with that party—on either of those two boards then the members who are sitting in the House today will be held to account for their silence on this matter.  
I want to take the opportunity of rehearsing some of the arguments that were made available to the House in the earlier stages of the bill and in particular I invite members of the public who are interested and members of the House who are here to consider some simple arithmetic. We have been told that as a result of this bill we will see the transmission arm of Television New Zealand BCL turned into Transmission Holdings Ltd and become a State-owned enterprise. We have separately seen a statement of corporate intent from the Government which makes it clear that the projection is that the two arms the transmission and the television arm together are going to make a profit of $17.9 million next year and $17.8 million in the year after. We have been told that that includes the $12.5 million that is being delivered to cover charter costs from the Government. In effect we have a $5 million profit being forecast by those two entities combined.  
It is not rocket science to work out that on those numbers the television arm of Television New Zealand is going to be running significant losses. Look at the profits of the transmission arm over the last few years. The Television New Zealand arm is going to be running very substantial losses. I ask members opposite to tell me how those losses are going to be made up. There is only one answer to that question. Television New Zealand will have to go cap in hand to the Minister of Finance on an annual basis. It simply cannot survive on any other basis than the goodwill of the Minister. I ask members opposite: do they really expect members to believe that Television New Zealand’s directors and management will not feel under the slightest degree of pressure that they should earn the $30 million or so they will be asking the Government for to survive each year by appeasing the Government with the quality of their news and current affairs coverage?  
Why is it that in terms of this legislation we have the weakest possible provision as far as editorial independence is concerned? Have United Future members thought about the reason for that watered-down provision? Do they not understand that we are about to enter an era where our State broadcaster the most powerful medium in our country is about to make an annual visit to the Minister of Finance who will no doubt have a conversation with the Prime Minister about whether it can get the $30 million or so it needs to survive? I have worked it out. Members on this side of the House have worked it out. I am surprised that United Future people tell me they have not worked it out. Members of the public are going to work it out. The result of this legislation being passed today will be a very sad very compliant simpering State broadcaster.  
DAVID BENSON-POPE (NZ Labour—Dunedin South) 
: 
 I am pleased to rise in support of this bill. I am very pleased that after a long gestation period the bill is finally having its third reading. 
DAIL JONES (NZ First) 
: 
 On behalf of New Zealand First I say at the outset that we will be opposing the bill. I immediately take up the point made by David Benson-Pope the senior Government whip. He talked about a long gestation period for the bill. The gestation period for this bill began on 20 February 2003 barely a week ago. The bill we are being made to pass by the Labour Party the Progressives and United Future is a totally different bill from that which was introduced into the House on 11 December 2001. It had its first reading in December 2001 it was reported back from the Commerce Committee on 23 April 2002 and its second reading was on 16 October 2002.  
The bill has had no gestation period. I could describe it in many ways that would be totally out of order but clearly it has not been gestated in any way whatsoever. The bill deserves a gestation period and when the Supplementary Order Paper was introduced it should have been referred back to the Commerce Committee so that submissions could be heard and we could hear what the public really thought about it. For the Hon Judith Tizard to say that the public support this bill is an absolute nonsense. The public do not know what is in the bill because largely it has been here only 7 days. The Hon Judith Tizard has absolutely no idea what is in it. She knows as much about the bill as she does about the people of Auckland and their needs—absolutely nothing. No opportunity has been given to the public to consider this legislation. In fact I remember the days when if one behaved like that Geoffrey Palmer would get up and talk about  
Unbridled Power 
.  
This is a clear example of unbridled power by the Labour Party and the United Future party. In less than a year—almost 6 months—the United Future party has taken part in one of the greatest examples of unbridled power one will ever see. A Supplementary Order Paper was brought in changing the bill dramatically from what the select committee suggested and the bill has been ripped through the House in 7 days. That is unbridled power. Of course it is to do with the fourth estate—the most important part of our constitutional process. We would have expected anything to do with control of the fourth estate to go back to a select committee. But no Mr Murray Smith—a lawyer in the United Future party—is not concerned about constitutional matters. The United Future party in general has no regard for the way in which this minority Labour Government is pushing this bill through the House. We are sure that United Future stands to gain something by passing it through the House.  
In fewer than 7 days we have seen a dramatic change in the way in which the bill will operate and the United Future party and the Labour Party Government do not give two hoots about it. We have gone from the provision of a Television New Zealand Crown entity group consisting of a Crown company holding company with two subsidiaries one of which conducts a television business and the other a transmission business to a situation whereby the legislation provides for the existing State enterprise Television New Zealand to be split into a Crown entity conducting a television business and a State enterprise conducting a transmission business. I believe that is a dramatic change in the legislation and I believe that the people of New Zealand were entitled to make submissions on it. Those people have been deprived by United Future and by the minority Labour Government of having the matter properly considered by a select committee. Why was that the case? Were they concerned? I cannot use other words to describe the way in which they might think about it. Were they so greatly concerned that there would be a public uproar about it that they did not want it to go before a select committee? One can only wonder because that chance will not be given to us now.  
One of the interesting things about the bill when it was introduced was that it stated in clause 3(c) that the purpose of the bill was to: “ensure that the subsidiary responsible for the transmission business operates as a successful business:”. That provision has been deleted from the bill. There is no requirement that either part of those new organisations should be commercially successful. Well we know that the one that will not be getting any funds will not be commercially successful. It is doomed from today. They will be going to the respective Minister and the Prime Minister with their hands out asking for more money.  
Someone has mentioned the situation of the Muldoon administration of which I was a part. It came into power only at the end of 1975. For many many years the licence fee through many many Governments was a political hot potato: “Oh no you haven’t been good to us so I don’t think we’ll increase it this year.” That would go on for ever. Various Governments of various hues were involved in what to do with the licence fee. Finally of course it was removed. But whenever a State organisation is dependent in some form or another on the Government for funds one cannot say that the Government will not have some influence on how the media the fourth estate would operate—in this case the television industry.  
The minority Labour Government supported by United Future is leaving our State television system wide open to Government abuse based on the facts as we already know them in New Zealand over many many years. It is an absolute disgrace. Constitutionally it is a disgrace. State television is not meant to be run commercially and it is leaving itself wide open to Government influence. [ 
Interruption 
]  
During the course of the Committee stage which the Hon Judith Tizard who is trying to interject had little influence upon New Zealand First supported a catholic range of amendments to the charter. We felt that it was important that all the ideas put forward by members of this House should be incorporated in the charter. Essentially the charter is just a load of baloney. It will do absolutely nothing. The charter is just a load of baloney. It uses some fancy fancy words but at the end of the day it is a load of baloney. The charter contains some very interesting things but most of it is just absolute rubbish. For example it states that TVNZ will feature programming that contributes towards intellectual scientific cultural spiritual and ethical development that reflects the diverse beliefs of New Zealanders promotes informed and many-sided debate and stimulates critical thought thereby enhancing opportunities for citizens to participate in community national and international life. That is one of about 25 things that are incorporated in the charter. Another one states that it will include in programming intended for a mass audience material that deals with minority interests. How does one possibly do something like that in the one programme? It is an absolute nonsense.  
One of the things that New Zealand First was very concerned about was that there is nothing in the charter that promotes family life. I am disappointed that United Future which has made such a feature of family life when it took so much credit for the new legislation that was introduced last Thursday and when it took credit for its dealings with Michael Cullen failed in all of those dealings to ensure that family life was included in the charter. Despite the fact that the charter is baloney one would have thought that United Future members might have given at least some consideration to having family life included as one of the things that the charter must consider—the promotion and the support of family life.  
I moved an amendment stating that the charter would feature programming of a family nature that supports the family and the development of family life in New Zealand. Regrettably that amendment was lost. One can only try.  
It was opposed by the Labour Party. Darren Hughes the new Labour Party member for Otaki who was the Labour Party whip at the time who voted for the Labour Party saying no he did not support family life. I wonder whether the people of Horowhenua know that their young new member thinks that family life should not be included in something like this. ACT opposed it and the Green Party opposed it. I raised the matter of family support specifically because it is something that is dear to my heart and it has been since 1976 when I first became a member in this House. I supported a Green amendment that included the need to give regard to the environment which was defeated by all other parties in the House. Only the Greens and New Zealand First supported it. I also supported an amendment from Mr Alexander from United Future about violence.  
We are concerned that those organisations have been set up so that they can be sold off. That really is one of the 15 foundation principles of New Zealand First. The way in which those two entities have been set up and established is a prime way for this New Zealand minority Labour Government to sell off anything that is profitable as it has done in the past. I did not hear the Minister Mr Maharey deny that point when he spoke. That is our concern as well. I predict that this minority Labour Government will try to do that in the future. 
A party vote was called for on the question  
That the Television New Zealand Bill be now read a third time. 
Ayes 67 
Noes 47 
Bill read a third time. 
Labour 52; Green Party 7; United Future 8. 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Government Superannuation Fund Amendment Bill (No 2) 
In Committee 
Debate resumed from 26 February. 
Part 1Preliminary provisions  ( 
continued 
)  
PANSY WONG (NZ National) 
:  
I am really pleased to see that there is a change of Minister in the chair for the debate on Part 1. We have the Hon John Tamihere instead of the Hon Michael Cullen who seemed hell-bent on shutting down the debate which was interesting last night. Because of that fiasco last night the Committee spent 35 minutes on debating points of order because the Hon Michael Cullen would not allow the ACT member the Hon Richard Prebble to seek a call on the title of the bill. I find that really interesting.  
My understanding is that Part 1 indeed the whole bill is supported by all parties in the House. So why is the Labour Government so hell-bent on shutting down debate? One would think that it does not want to pass this legislation that modernises the practice that no person should be disadvantaged—in this case whether under the Government Superannuation Fund a widow or widower of a pensioner would continue to receive the benefit if the widow or widower happened to remarry. I am surprised because last night my colleague Dr the Hon Lockwood Smith believed that the title Government Superannuation Fund Amendment Bill (No 2) did not clearly bring out the intention that is set out in Part 1. I believe that the Hon Richard Prebble should be entitled to seek a call on that.  
The Hon Michael Cullen made an accusation towards my colleague the honourable Dr Lockwood Smith who has spent 19 years in Parliament and has never been expelled from the Chamber. All he did was politely ask the Chair whether it was democratic to allow the ACT leader the Hon Richard Prebble to seek a call because the title of the bill does not clearly spell out what is set out in Part 1— 
The CHAIRPERSON (H V Ross Robertson) 
: Could the member just talk about the bill. 
PANSY WONG 
: The bill is about whether a widow or widower who is entitled to receive the pension should not be disadvantaged if he or she chooses to remarry. One would have thought that that was a perfectly reasonable action but nothing is reasonable according to the minority Labour Government. I am still perplexed and hope that the Labour Minister the Hon John Tamihere is not still under a gagging order. I hope he will seek a call to explain to the public why the title of this legislation which seems to be well received by the House does not more clearly spell out the purpose that is set out in clause 3 which might enlighten people listening to this debate. 
The National Party is supporting this bill. As it has been 20 years since the passage of the last bill we think it is about time that society recognises that widows and widowers will remarry and seek another period of happy life. That should not jeopardise their entitlement under this bill to receive the pension. I hope this Minister who does have a reputation of speaking his mind and making his own decisions until his arm has been twisted will take a call to explain further to the public the background that leads to the purpose of the bill.  
I hope the Chairperson will also allow a few more calls from the various parties because we are witnessing one of those rare occasions where most parties—and I would say probably all parties—will support this legislation. But it is important that the Minister seeks the call to explain the issue further because last night some members raised a concern as to whether the investment is being made wisely. 
RODNEY HIDE (ACT NZ) 
: 
 It is very good to see the Hon. John Tamihere given a job in this Parliament by the Government. I know that the Hon. John Tamihere will clearly and comprehensively rebut all claims that he has been muzzled by the Prime Minister Helen Clark.  
We are discussing Part 1 and I have some questions to raise with the Minister. I am hoping that he will dispel all those outrageous claims people have been making that the Prime Minister has jumped down the throat of the second to highest ranking Maori in her caucus and has muzzled him. 
Gordon Copeland 
: I raise a point of order Madam Chair. I want to raise a serious point of order. We are speaking on Part 1. The status of various Cabinet Ministers has nothing whatever to do with the subject matter. I sat here last night for 45 minutes and I believe that the way this Committee behaved itself then—and I have spoken to many people today who listened on the radio—brought Parliament into disrepute. Madam Chair today I would like you to rule specifically that people stick to the point that they speak to the wording of the part and that they do not stray again into extraneous matters. 
Rodney Hide 
: That’s not even a point of order. 
The CHAIRPERSON (Ann Hartley) 
: I tell Mr Hide that I am on my feet and ruling on the point of order. Would he please be silent. The member is quite correct. I ask the member now to speak to clauses 2 and 3 and to stick to those clauses. 
RODNEY HIDE 
: Thank you for the ruling. We are discussing clauses 2 and 3. I would like the Minister to take the next call and answer these questions. With regard to clause 3 how many spouses currently have their annuities suspended? Could the Minister take a call when I sit down prove to the world that he has not been muzzled and answer the simple question: how many spouses currently have their annuities suspended? Would the Minister do that?  
The second question is: what is the fiscal cost of this bill to the Crown? What will this bill cost the Government Superannuation Fund and what will this bill cost the taxpayer? I would like the Minister in the chair—[ 
Interruption 
] We now have an interesting situation. I raise a point of order Madam Chairperson. Mr Copeland who is very very big about points of order is now having a serious conversation right beside where I am trying to give my speech. I would like you to rule as Speakers rule—that that is unacceptable. 
The CHAIRPERSON (Ann Hartley) 
: I ask the member to resume his seat. A lot of people were speaking but the member should not be standing up. 
David Benson-Pope 
: It has to be within the order of the Committee and it is provided for in the Standing Orders specifically for the whip of one party—in this case myself—to discuss a procedural matter with a whip of another party. In this case it is Mr Copeland. 
Rodney Hide 
: Speaking to the point of order—  
The CHAIRPERSON (Ann Hartley) 
: No please be seated. What we must ensure is that the conversation is not interfering with the speech of a member and it was close to the member. Please continue. 
RODNEY HIDE 
: I will recap my questions which Mr Copeland who has come down to the Chamber does not seem to be interested in. Firstly how many spouses have their annuities currently suspended? Second what will be the cost to the taxpayer? Third what will be the cost to the Government Superannuation Fund? I want the Minister in the chair who is collecting ministerial pay and pretending he is a Minister to stand in the Chamber and do his job while he is in the chair—that is answer some questions.  
Also I would like the Minister in the chair to put these costs into some sort of context. What does the cost of providing for these spouses—which I hasten to add the ACT party is supporting—mean in relation to the costs to the Government Superannuation Fund compared to what the fund has lost in the last 14 months? Under Michael Cullen the economic wizard of New Zealand the Government Superannuation Fund has lost $380 million. The Minister Dr Cullen says that is not much; that is normal variance. Well $380 million is a lot of money. Given that this bill has been lying around on the Order Paper for months and months and now my colleague from United Future wants it to pass without debate it would seem I would like the Minister the Hon John Tamihere who has boldly taken up the chair to explain the cost of providing for these widows compared to what Dr Michael Cullen has lost from the fund in that time. I guarantee that we could look after a lot of widows and a lot of spouses who have remarried when we compare it to the $380 million that has been lost. We know that the Hon John Tamihere has plenty of ideas. He is bursting with ideas. He is busting with ideas. I want him to take a call and say: “Why don’t we decentralise and devolve the Government Superannuation Fund to Maori?”. Is it a good idea to devolve it to housing for Maori?  
I refer to clauses 2 and 3. Did that Minister when he was at the Cabinet table discussing this provision talk about his bold initiatives and ideas? Or do we have a case of a Minister who is a lion out in the electorate well away from the ninth floor well away from the Cabinet room but not prepared to speak in this Chamber? 
JOHN CARTER (Senior Whip—NZ National) 
: 
 I raise a point of order Madam Chairperson. I did not want to interrupt the member’s speech but there are two points with regard to the point of order exchanges that have occurred that I want to remind the Committee of.  
Firstly Mr Copeland raised a point of order with regard to relevance. I think it is appropriate at this stage to remind the Committee that when members raise points of order of that nature they must be seen not to challenge the Chair. It is your prerogative alone as Chair to decide whether the member is relevant and it is your prerogative alone to draw that to the attention of the member and the Committee. The second point I want to make is with regard to the issue that was raised by the senior Government whip and that is the matter of exchange between whips particularly. Although it is true that we must take care to ensure we do not interfere with other speeches as we are carrying out our duties as whips in the Parliament there is a longstanding convention that whips acting in that capacity are unseen. So it is important that that convention remains because we do have duties that are peculiar and particular to the Parliament and the running of it. 
The CHAIRPERSON (Ann Hartley) 
: I thank the member. I think those points have been covered. The member raised a correct point of order. 
CRAIG McNAIR (NZ First) 
: 
 I take pleasure in speaking to Part 1. Whenever New Zealand First members look at legislation we look at it in a very balanced and sensible way as we always have. As I look at the bill and listen to some of the speeches—I listened to Roger Sowry last night and to Pansy Wong and some others—I have to say that I think they are missing the purpose of the bill. I really have to make that point. This bill is not a massive and controversial piece of legislation that the Government is trying pass under our noses. As we are speaking to Part 1 I would like the read out the purpose clause but before I do that I do want to remind members that New Zealand First is a strong advocate for the fund to have more investment in New Zealand. Everybody knows that. We have even got a press release about it. 
Simon Power 
: What is the purpose? 
CRAIG McNAIR 
: We have even got a press release about how we should invest more in New Zealand but this is the purpose of the bill— 
Dr the Hon Lockwood Smith 
: No it’s not. 
CRAIG McNAIR 
: Dr Lockwood Smith wants to be all smart about it but if he would just listen to people who want to speak on the bill—[ 
Interruption 
] Pansy Wong is saying that I should speak to the bill. What did she talk about? Absolutely nothing! That just shows the substance of the National Party. 
The CHAIRPERSON (Ann Hartley) 
: The member needs to come back to clauses 2 and 3. 
CRAIG McNAIR 
: Thank you Madam Chair. As a new member I do appreciate your guidance. The purpose of the bill is to remove inequities in treatment between members of the old schemes of the Government Superannuation Fund and the new schemes. That is pretty basic. One good point that Pansy Wong did make last night was that time had moved on. [ 
Interruption 
] If Dr Lockwood Smith is calling for me to speak to the bill I can tell him that I definitely am speaking on the bill. Pansy Wong as I remember was talking about the difference in treatment between the members of the old schemes of the New Zealand Superannuation Fund and the new schemes. The commentary on the bill states: “The purpose of the bill is to remove inequities in the treatment between members of the old schemes of the Government Superannuation Fund (GSF) and the new schemes. The bill seeks to remove an inequity in the treatment of widows and widowers with effect from 1 July 2002.” Time has moved on. There has been a need for us to update the legislation as it were. I am glad to hear that other parties are supporting this bill. New Zealand First as I have always said supports good legislation and opposes bad legislation. We think that this is good legislation. 
Simon Power 
: What’s it about? 
CRAIG McNAIR 
: Does Simon Power think that this is good legislation or bad legislation? 
Simon Power 
: What’s it about? 
CRAIG McNAIR 
: No—I am on my feet. I ask him to tell me whether he thinks that this legislation is good or bad. He does not know. All he has is a question. He probably will not speak on this bill. I do not think that that member heard me when I said what the purpose of the bill is. He is asking me to tell him about the bill. If the member had listened he would have heard what I said about the bill. That just goes to show the substance of the National Party. Simon Power really wants me to spell it out to him—specifically about Part 1. There must be something I do not know because I thought he had been here for at least one term before I was.  
GEORGINA BEYER (NZ Labour—Wairarapa) 
: 
 I move  
That the question be now put 
. 
Dr the Hon LOCKWOOD SMITH (NZ National—Rodney) 
: 
 I rise with some trepidation to speak on Part 1 because when I was speaking on the title only last night I managed to be evicted from this Chamber for the first time ever in 19 years in this Parliament. So I fear this bill may bring me bad luck but despite that nervousness I will do my best to address Part 1.  
Part 1 covers the commencement and the purpose of the bill. The commencement clause is interesting because normally the commencement date indicates a little bit about the Government’s legislative programme. What is interesting is that the commencement clause states: “This Act comes into force on the day after the date on which it receives the Royal 
assent.” What is interesting about that clause is that it shows that the Government’s legislative programme is a shambles. The Government has no idea when this bill is going to come into force—none whatsoever. What is more the fiscal cost of this bill gets greater every week that it does not come into force because the bill goes back to July 2002. So the estimated cost of the back-pay shall we say gets greater with every week that goes by. The Government has no idea when it will get this bill through the Parliament—the bill demonstrates that quite clearly. The Government’s legislative programme is in a shambles. The Government cannot specify a date when the bill is to come into force so it just says that that will be on the day after the date on which the bill receives the royal assent. That is a way of saying: “We haven’t got a clue and that’s the only safe way to put it.” That is the first thing I would say in respect of Part 1. Clearly it demonstrates that the Government’s legislative programme is a shambles.  
The other clause in Part 1 is clause 3 “Purpose” which is I think what my colleague from Rodney Mr McNair from New Zealand First was trying to describe— 
Rodney Hide 
: I raise a point of order Madam Chairperson. I do apologise for interrupting the honourable member on his feet but throughout Craig McNair’s speech and now during Dr Lockwood Smith’s speech a conversation has been going on between two MPs. It is not a short conversation; it has gone on for some time and— 
The CHAIRPERSON (Ann Hartley) 
: The member will be seated. The member himself was speaking quite loudly. Indeed I nearly called for order when Mr McNair was speaking so I suggest that the member refrain from raising those sorts of points of order. 
Rodney Hide 
: Point of order— 
The CHAIRPERSON (Ann Hartley) 
: Would the member be seated. I will not entertain spurious points of order. I am warning the member now.  
Rodney Hide 
: I raise a point of order Madam Chairperson. What I want you to do is point out to members that if they are going to engage in a long conversation—and successive Speakers have ruled on this—they should go into the lobby. I am not actually complaining but it is very hard to hear. The conversation has gone on now through two speeches and I think it is quite within the rules for the Chair to point that out. 
The CHAIRPERSON (Ann Hartley) 
: The member will be seated. There were several conversations going on including his own as I pointed out.  
Dail Jones 
: I raise a point of order Madam Chairperson. May I suggest that you ask those members who are having lengthy conversations to have them outside the House. 
The CHAIRPERSON (Ann Hartley) 
: Yes certainly. They are aware of that. 
Rodney Hide 
: I raise a point of order Madam Chairperson.  
The CHAIRPERSON (Ann Hartley) 
: Please be seated. If it is a point of order on what I have ruled on— 
Rodney Hide 
: No it is not. It is a point about consistency. I raised precisely that point of order. You did not rule in my favour. I know that Mr Dail Jones is probably more eloquent than I am and probably has more legal training than me but he raised the point of order and you accepted it. What is going on? 
The CHAIRPERSON (Ann Hartley) 
: The member will be seated. The member is raising trifling points of order and he will desist. 
Dr the Hon LOCKWOOD SMITH 
: Clearly the purpose clause does change the Government’s fiscal position because it provides the annuity to be paid to spouses after they remarry. It means that the old arrangements under the 1956 Act become consistent with the amendments that were made when the new schemes were brought in in 1985.  
I do have a question for the Minister and I want him to answer the question that my colleague Rodney Hide from ACT asked him. The commentary on the bill has not spelt out the fiscal costs. There clearly is a fiscal cost. Most members support the bill but we deserve to know what the fiscal cost is. I expect the Minister in the chair the Hon John Tamihere to inform us of the fiscal cost. We know that he is in the chair because he is being punished. He is being punished for being a naughty boy and for saying things that the one who is not to be questioned—the Prime Minister the Rt Hon Helen Clark—does not approve of. We know that. 
David Benson-Pope 
: I raise a point of order Madam Chairperson. We have already been down that road once this afternoon. Those comments are irrelevant to the part of the bill that is under discussion and need to be ruled out of order. 
Rodney Hide 
: Madam Chair— 
The CHAIRPERSON (Ann Hartley) 
: Please be seated. I do not need any assistance. The member will keep to the issues in the part being debated.  
Rodney Hide 
: Madam Chair— 
The CHAIRPERSON (Ann Hartley) 
: I do not need any assistance. Please be seated. It is my decision whether to accept a contribution to a point of order and I am not accepting your contribution to this point of order. Please be seated. 
Rodney Hide 
: I raise a point of order Madam Chairperson.  
The CHAIRPERSON (Ann Hartley) 
: Is it a new point of order? 
Rodney Hide 
: Yes. It is quite appropriate to be asking the Minister in the chair questions when— 
The CHAIRPERSON (Ann Hartley) 
: That is not a point of order. Please be seated. 
Rodney Hide 
: Well what’s your ruling? 
The CHAIRPERSON (Ann Hartley) 
: That is not a point of order. The member is continuing to challenge the Chair. The member has been warned. The member will now leave the Chamber. 
Rodney Hide 
: How long for? 
The CHAIRPERSON (Ann Hartley) 
: There will be no further comments on rulings I have made. The member will leave the Chamber until 10 to 6.  
Rodney Hide withdrew from the Chamber. 
Dr the Hon LOCKWOOD SMITH 
: If one were to read the purpose of this bill one would find that it has a fiscal cost associated with it. My colleague whom you have just demanded leave the Chamber asked the Minister two speeches ago to tell us what— 
The CHAIRPERSON (Ann Hartley) 
: Would the member be seated please. It is against the Standing Orders and  
Speakers’ Rulings 
 for a member to refer to my ruling that a member withdraw from the Chamber. Please continue.  
Dr the Hon LOCKWOOD SMITH 
: My huge apologies Madam Chairperson. The fact is that my colleague asked the Minister two speeches ago to inform us of the fiscal cost of the purpose of this bill. A closure motion was moved before the Minister had even responded to Rodney Hide. Why is the Minister refusing to answer that question? Is it because the Prime Minister has muzzled him? Does he not have a note from the Prime Minister telling him what he can say on this bill?  
If he continues to refuse to answer questions on the bill the only conclusion we can come to is that he has been muzzled by the Prime Minister and therefore will not answer our questions. When a fiscal cost is associated with the purpose of a bill we are entitled to have that answer from the Minister in the chair. I want the Hon John Tamihere to tell us whether he is allowed to answer questions on this bill or whether we are just wasting our time. Does he have the Prime Minister’s approval to speak on this matter or has she forbidden him to speak on this matter? If the Prime Minister does not allow John Tamihere to speak on the Government Superannuation Fund Amendment Bill (No 2) he should get out of the chair and let into the chair a Minister who will answer our questions and does have the approval of the Prime Minister to talk on this issue. It is not within the procedures of this Committee for the Minister to ignore valid questions. Sure the Minister can ignore stupid questions but a question about the fiscal cost of the purpose of this bill is a perfectly valid question. The fiscal cost is not mentioned and is not in the commentary on the bill. If members read the commentary on the bill they will see that it tells us how many people might be involved and how many children might be involved but there is no estimate of the fiscal cost. It should be in the commentary on the bill. It is a fair and valid question for that Minister to answer. 
DAVID PARKER (NZ Labour—Otago) 
: 
 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 
Noes 39 
Motion agreed to. 
Labour 52; Green Party 7; United Future 8. 
New Zealand National 26; New Zealand First 13. 
Part 1 agreed to. 
Part 2 Spouses’ annuities and children’s allowances 
PANSY WONG (NZ National) 
: 
 Part 2 goes into some depth about the exact changes the effect of those changes and the time frame of those changes affecting surviving spouses and also children. Even though this is a small bill it is a bill that is supported by all parties in the House. The Government Administration Committee of which I am a member received submissions from the Government Superannuitants Association; the Law Society who provided a very good technical amendment which we accepted; and also the National Council of Women. I draw members’ attention to the submission made by the council. Although in general it supported the intention of the bill it raised two very valid questions. 
The first question was about when the changes would take place and the second dealt with an issue that is not answered in the commentary on the bill. The Minister in the chair the Hon John Tamihere should take a call and answer that question. The council raised the issue of whether those changes will apply only to children under the age of 16. The council said that sometimes children over the age of 16 are still financially dependent and asked why they are excluded from the entitlement. The officials told us—and we included the answer in the commentary—that discretions can be made to apply those entitlements to children over 16 years. But what are the criteria? We cannot find the answer anywhere in the commentary.  
The National Council of Women has always been very diligent in making good substantial submissions. This submission was made by three joint standing committees of that council which had a very genuine concern about the welfare of children who may be over the age of 16 but are still financially dependent. We were told by the officials that discretions can be made by the Government Superannuation Fund to ensure that those children get an entitlement under the scheme. But nowhere have we found the criteria. So the Hon John Tamihere the Minister in the chair must stand and answer the genuine questions posed by submitters about the criteria for those children who are still dependent. How do they know whether they are entitled to that discretion—that waiver—under the Government Superannuation Fund which their parent had subscribed to?  
The Minister should answer. It will be a sad day when a Minister is in the chair but simply as a punishment because he somehow upset the Prime Minister Helen Clark and then refuses to answer valid questions. Every Minister who earns a salary as they do and sits in that chair has an obligation to answer valid questions raised by members of Opposition parties. In this case the questions have been raised by the public. The National Council of Women spent time making submissions and wanted answers but the arrogant minority Labour Government puts a Minister in the chair who knows nothing about the bill will not consult the officials and refuses to answer questions from people who might be affected by these changes. How do they know? Where do they go to apply for these discretions? Even if they are over the age of 16 and financially dependent where do they go and who do they ask? How do they know whether they might fit the criteria for that provision to be uplifted? I do not think it is good enough for the Minister to continue to sit there not answering genuine questions raised by a member of Parliament especially when the questions are raised on behalf of a substantial organisation the National Council of Women. 
CRAIG McNAIR (NZ First) 
: 
 Dr Lockwood Smith had a very good point last night when talking about how only 800 adults and 19 children were affected by this bill. But even though it affects such a small number of people it is still very important legislation which is why New Zealand First will support the bill in its entirety. We support the aim of the bill which is to repeal the provisions of the Government Superannuation Fund Act that suspend the payment of benefits to widows or widowers in the event of remarriage and provide for the restoration of suspended benefits under those provisions. We also want to put on the record that we support the replacement of the prescribed fixed allowance paid to children of deceased members under the old scheme with the inflation-adjusted allowance provided for in the new scheme.  
Once again we feel this is a very important bill. It does not really matter how many people it affects; it is still very important legislation and I am very proud on behalf of my New Zealand First colleagues to support the bill. 
Dr the Hon LOCKWOOD SMITH (NZ National—Rodney) 
: 
 We are privileged now to have the Minister of Finance who has deigned to return to the Chamber to sit in the chair on his bill. Maybe we might now get some answers now that the muzzled John Tamihere is no longer in the chair.  
Part 2 spells out the details of this bill and there are a couple of issues I would like to ask Dr Cullen about. He will note that during the work of the select committee clause 4(6)(b) was struck out. The commentary states that the committee struck it out to avoid confusion. I would like the Minister to look at that and satisfy himself that it was the right thing to do. Subclause 6(a) spells out that a person is entitled to an annuity under the provision of the principal Act but as I read clause 4(6)(b) the amount of that annuity should be as if the person had been in receipt of all the adjustments to the annuity over time. In other words if those adjustments are not taken into consideration is the Minister satisfied that the legislative provision for the amount of the annuity is secure? When the bill was originally drafted it is pretty clear that subclause 6(b) was put in there to make sure that the amount of the annuity that would be paid was clarified—not just that a provision was being made to pay an annuity but that the amount was to be at a level that included all the adjustments made since the new schemes came into being in 1985. I would be interested in the Minister taking a call to advise us whether he is satisfied that clause 4(6)(a) on its own covers that aspect. I think it is quite important. We do not want to be passing legislation that provides for an annuity but does not actually tell the recipients how much they are entitled to.  
During the earlier debate Opposition members asked a perfectly valid question about the cost of this legislation. It is important because payments under the Government Superannuation Fund are defined benefits so regardless of what happens to the fund the benefit will be paid out. It is an important protection to those who receive annuities from such a scheme. Now with the scheme having lost so much money in the last 14 months—what is it $380 million?—there is an issue about whether taxpayer funds will have to be used to enable the scheme to meet all its commitments. It is a defined-benefit scheme and commitments have to be met. If they cannot be met from the scheme directly as I understand the law they must be made up by the Crown.  
Those are the two things I would appreciate the Minister answering in respect of Part 2. The first is whether he is totally satisfied that the omission of clause 4(6)(b) does not leave any loose ends about the amount of an annuity a remarried spouse or any children might be entitled to under this bill. The second thing is whether given the fact that the Government Superannuation Fund has lost a lot of money and is a defined-benefit scheme there are any fiscal consequences for the Crown from this legislation as we look ahead.  
Those are perfectly reasonable questions to be asking and I hope the Minister of Finance is in a better position to answer them than the Minister of Youth Affairs who had been instructed that he was not allowed to make comments on areas outside his own portfolio. I guess he was too muzzled to answer our questions and somewhat punished by being put in the chair on a bill that was not his. I am sure that if those questions could be answered there would be a fair bit of satisfaction in the Chamber that Part 2 is in reasonable shape and therefore worthy of the support of the Committee. 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I think the member has raised a couple of quite reasonable questions and I apologise for not having been in the chair. I have been to the dentist so I apologise if I am slightly incomprehensible; the effect of the injection I had is still wearing off.  
I am perfectly satisfied about the consequence of the removal of paragraph (b) in subsection (6) of clause 4. That means that the full amounts will be paid. Certainly the Government Administration Committee was told that there could be a conflict of interpretation between paragraph (b) and paragraph (c) but clearly the full amounts will be paid backdated to 1 July 2002.  
The fiscal issue is quite an interesting point but it is not affected by the short-term performance of the fund. Indeed an appropriation had to be made for that particular provision in any case—obviously in the 2002 Budget—because it comes into force on 1 July. The technical issue surrounding it was whether we had to accrue the full long-term net present value if one likes of the change in benefit. That would have been counted—I think it was $25 million—in one lump which would have been quite difficult to do in any one year. In the end it was determined that under the accounting rules it could be done on an annual basis—I think between $2 million and $2.5 million. But it is fully an appropriation because it would not under any circumstances affect the amount to be transferred from the fund so the additional amount has to be borne by the Crown account.  
STEPHEN FRANKS (ACT NZ) 
: 
 I rise to ask another question about Part 2. I do so aware that the Government Administration Committee may have examined this matter and that there may be members present in the Chamber who could easily answer the question. However the Committee stage is the right time to find out about it.  
There is a statement that the purpose of the bill is to restore fairness and equity. I am never quite sure in this context whether those words mean anything other than the same thing or indeed whether they mean anything at all. They seem to be thrown in when people want to say “this is a good thing” and it is not clear at all that they had a particular unfairness in mind. But in a bill that is achieving fairness and equity I am puzzled by the fact that the adjustments are backdated only to 1 July 2002. Surely if it is unfair now it was unfair before that date. If it was unfair sufficient to justify what from the perspective of the recipients must be a windfall—because they will now have an entitlement that they never had before—then why do we limit the redress of unfairness to 1 July 2002?  
That is particularly interesting because one imagines that the Government Superannuation Fund—at least when it was originally established—had some sort of actuarial foundation. There was some kind of relationship between the trade-off members made in their primary salaries and what they saw as the benefit of their pensions. At the time when members were paying into the fund it was seen as fair that one provided for a spouse but that spouses who remarried would be provided for by the new partner. Therefore there was no perceived unfairness at the time. What we are doing now is revisiting history to apply our current ideas of what is fair and unfair across financial arrangements that were made in quite different circumstances.  
I am quite prepared to accept that the conscience of the Government sees it as important to change the rules now and apply a new sense of fairness but why is there no back-payment? What is the justification for choosing 1 July 2002 as a cut-off date and not 1 July 2001 or 1 December or any other date? If this were not just a matter of politics if there were some reason that it is fair from 1 July 2002 but not before I would have expected the select committee to mention the principle on which it made that assumption in its report. Instead there just seems to be assertion as though it were absolutely self-evident.  
Not having sat on the select committee or been present in the earlier part of the debate I imagine that that is the sort of thing the Minister in charge of the bill should be able to address very easily in the Committee stage. He should be able to explain exactly what that principle is how those members’ sense of fairness is not outraged by their loss before the start date and how they feel assuaged now—to the point where not only is inequity being addressed but also unfairness whatever the difference between those two is. Perhaps the chairman of the select committee that advised that this bill achieved fairness and equity could help us by explaining what the committee meant. Certainly there are members of the select committee present including its deputy chairperson. I am sure she would be quite happy to explain in terms of removing discrimination just what was significant about the date of 1 July 2002.  
Of course when the word “discrimination” is thrown in we are all supposed to genuflect and suspend reason because discrimination of all kinds is inherently wrong—even according to this Government discrimination against bad people. We are not to discriminate against criminals.  
DAVID BENSON-POPE (Senior Whip—NZ 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 
Noes 45 
Motion agreed to. 
Labour 52; Green Party 8; United Future 8. 
New Zealand National 26; New Zealand First 12; ACT New Zealand 7. 
Part 2 agreed to. 
Bill reported without amendment. 
Procedure 
DAVID BENSON-POPE (Senior Whip—NZ Labour) 
: 
 I seek leave of the House at this point to move directly to the third reading of the Government Superannuation Fund Amendment Bill (No 2). 
Mr SPEAKER 
: Is there any objection to that course being followed? There is objection. 
Taxation (Annual Rates Maori Organisations Taxpayer Compliance and Miscellaneous Provisions) Bill 
Second Reading 
Hon Dr MICHAEL CULLEN (Minister of Revenue) 
: 
 I move  
That the Taxation (Annual Rates Maori Organisations Taxpayer Compliance and Miscellaneous Provisions) Bill be now read a second time 
. The Finance and Expenditure Committee has carefully considered the bill and reported it back in December. 
The single most important feature of the bill is the introduction of legislation that modernises the taxation of organisations that manage Maori assets held in communal ownership. These organisations which are known in tax law as Maori authorities range in size and functions. They may be trusts that manage a single asset such as a small block of land that involves only a few owners. At the other end of the spectrum they may be large organisations with diversified holdings that involve hundreds or even thousands of individual owners or they may be organisations that receive treaty settlements assets. 
Organisations that manage communally owned assets face problems not encountered by ordinary companies and trusts. Communally owned assets cannot be easily sold and severe restrictions are often placed on their use by specific legislation or Government process. We have always had specific tax rules designed to deal with the administration of Maori freehold land and other tribal assets and they will continue to be necessary just as specific rules for other groups of taxpayers are necessary. 
The present rules governing Maori authorities were last revised in the 1950s and are now badly out of date. They have become unwieldy do not mesh well with other tax laws such as dividend imputation and now must apply to a much wider range of activities than envisaged half a century ago. They impose unnecessary complexity on contemporary Maori authorities create high compliance costs and in some cases double tax income. The new rules introduced in this bill provide greater flexibility and choice for Maori authorities. If they wish to do so they will be able to apply the general tax rules instead which may be more efficient for some of them. The proposed changes will enable them to structure their affairs more efficiently whichever tax laws they use. 
The bill tightens the definition of Maori authorities for tax purposes. They will include only those organisations that manage communally owned assets and whose ownership and administration are subject to certain statutory restrictions or Government processes. Not all organisations that qualify as Maori authorities under the present definition will do so under the new definition. The committee has recommended clarifying that the definition includes entities that are subject to the legislative restrictions of the Maori Land Act and bodies that receive and manage Treaty of Waitangi settlement assets including fisheries assets. The Government agrees with these changes. 
The measure that has generated most heat in some quarters is the proposal to introduce a tax rate of 19.5 percent on the income of Maori authorities. Some have claimed that this would introduce favourable tax treatment based on race. This is simply untrue. This measure does not apply to Maori as a group it does not apply to all businesses run by Maori and it does not apply to all organisations that manage communally owned Maori assets. To reiterate a point of fundamental importance the 19.5 percent rate will apply only to organisations that manage communally owned Maori assets that have heavy restrictions on their use and management imposed upon them by legislation or Government process. There is a simple rationale for that rate. It is the rate at which all New Zealanders pay tax on the first $38000 of their income. Since 90 percent of the owners of tribally owned assets are estimated to earn less than $38000 a year 19.5 percent is the statutory rate for that vast majority. Tax from Maori authority income will be paid at the authority level at the rate that is most sensible for the vast majority of members. 
From an administration perspective—which costs taxpayers money—it is much simpler to withhold tax at the statutory rate for most members than to withhold it at a higher rate and require most members to seek tax refunds at the end of the year particularly because in this case many of the individual owners have very small amounts of assets involved so the level of tax rebate involved in many many cases will be very small. We are talking in terms of a figure of between 19.5c and 33c of a rebate of $10 $20 $30 or $40 in many cases. It is administrative nonsense to impose that kind of burden not on the Maori authorities but on the Inland Revenue Department and the taxpayers who fund the Inland Revenue Department. To accuse that of being racism is simply to get one’s hat on completely upside down and wonder why it is getting full of water. 
Let me cite an example of the difficulties a higher tax rate creates in this case. The Maori Trustee which administers over 2000 properties makes distributions to over 50000 individuals a year. The average size of these distributions is estimated to be about $135; if it were taxed at 33c the average refund due would be less than $20 for those 50000 people. That does create real compliance costs. 
The estimated 10 percent of owners who are on a higher statutory tax rate will pay the remaining tax on the income at that rate when the income is distributed by the Maori authority. Individual Maori will not benefit from the 19.5 percent rate if they are higher-income earners because they will still have to pay tax at 33 or 39 percent when the income is distributed and they put in their annual tax return. 
The committee considered the many viewpoints expressed in submissions on the bill. The main change is to remove wholly owned companies from the 19.5 percent rate because it can be argued that that would give them a competitive advantage against similar companies operating in similar areas of activity. But let me say that is a fine judgment and there is still a theoretical argument in favour of imposing a 19.5 percent rate. It is a compromise but a fair compromise. 
There are many other important changes in this bill and particularly very many taxpayer-beneficial changes—for example taking into account taxpayers’ good behaviour when imposing two of the five categories of tax shortfall penalties. The committee also recommended amendments that recognise that taxes paid more frequently such as GST offer more room for taxpayer error so need a more concessionary approach. The Government agrees with those recommended changes. The bill also of course provides for the annual approval of the statutory rates of income tax.  
An amendment added to the bill after its introduction exempts people visiting New Zealand as crew members of superyachts from paying income tax in New Zealand. It is clear that the present law if enforced would simply lead to those people exiting every 6 months to go somewhere else and we would probably lose some of the maintenance work that we do on those superyachts within New Zealand. 
So this is a very important bill. It incorporates an important change. We will hear much huffing and puffing about so-called race-based taxation. It is totally meaningless for that to be said but that will not stop a number of gums beating together at great length over the coming period of time.  
Dr the Hon LOCKWOOD SMITH (NZ National—Rodney) 
: 
 This bill obviously contains several elements. I agree with the Minister of Revenue that those relating to compliance costs are positive for taxpayers. The issues relating to penalties being more appropriately adjusted to the crime being committed by a taxpayer and the effort to improve use-of-money interest arrangements to allow tax pooling are positive measures. But the bill contains two sets of measures that the National Opposition cannot accept. 
The first is that this bill confirms current tax rates and the current tax brackets. I wish Dr Cullen was able to hear this point. The recent OECD analysis showing that New Zealand has the second-highest increase in income tax of any country in the OECD other than the Czech Republic for an average wage-worker—or production worker as the OECD calls it—relates partly to our tax rate system and the tax bracket system. Over the years in which the OECD has done this analysis the average wage of a production worker in New Zealand has been right at the cusp of the 19.5c-33c change. If we look at the data that the OECD has been working on we see that the actual New Zealand dollar average wage of that production worker which it is all based on is exactly $38000 or $39000. So we have a whole shift in the number of people starting to pay 33c in the dollar instead of 19.5c in the dollar. The Government is collecting far more income tax as a consequence. The OECD has pointed out that this Government is taking more income tax off ordinary working New Zealanders. The increase is bigger than for any other country in the OECD other than the Czech Republic—bigger by far than for any other country in the developed world other than the Czech Republic. 
Here with this bill we confirm the existing rates and existing tax brackets that are doing that to ordinary working people in New Zealand—and National opposes that. The Government should not be doing that; it should be thinking about what its tax policy is doing to ordinary wage-earning people but clearly it just does not care. We hear the rhetoric about this Government caring about ordinary working families but clearly with this bill it does not care a jot. The fact that it is clawing a bigger increase in the income tax take off the ordinary working family in New Zealand than in any other country in the developed world does not seem to worry it. With this legislation the Government confirms the very rates and the very tax brackets that are doing that to our average family in New Zealand. If it cares to look at the OECD analysis it will see that our average worker in New Zealand is sitting right on the cusp of the shift from 19.5c to 33c—just over that cusp—and that is one of the reasons this Government is clawing so much more tax off the average worker in New Zealand. 
That is the first thing National objects to and one of the reasons that we oppose this bill—despite the useful compliance measures in it. But the second problem with this bill is one that worries us even more. Dr Cullen tried to write it off as if it were not serious and significant but it is serious and it is significant. For the first time that I am aware of in this country’s history a favourable tax rate is being applied on the basis of race. Whatever way one looks at this bill one cannot reach any other conclusion.  
Clayton Cosgrove 
: Rubbish! 
Dr the Hon LOCKWOOD SMITH 
: Clayton Cosgrove sits over there and says “Rubbish!”. I want him to identify one other racial group in New Zealand—just one other than Maori—whose businesses will receive this favourable tax rate of 19.5 percent. Is there a Pacific Island business that will receive this favourable 19.5 percent tax rate? Is there one low-income group of European descent that will receive this 19.5 percent tax rate for its business? There is not one. The only businesses in New Zealand that will receive this favourable 19.5 percent tax rate are Maori businesses. It is not good for the future of this country to make our tax law on the basis of race. That is wrong whatever way one looks at it. 
Having said that I acknowledge there is a problem with the taxation of Maori authorities. I am not being blind to the problem which a lot of people will not understand so let me explain it very clearly. At present if a Maori authority distributes its profits it is treated like any other business. It pays 33c in the dollar tax which is imputed so that any persons receiving a share of those profits do not need to pay any more tax than their normal statutory rate. There is a problem though. A Maori authority that does not distribute its profits is taxed 25c in the dollar—25 percent. If it does not distribute that profit within 4 years but does distribute it thereafter that 25 percent tax is not refundable. If the profit is not distributed within 4 years that 25 percent tax is not refundable. Therefore if it distributes after 4 years there is an issue of double taxation. I accept that. Although I say and although National says that it is wrong to give special taxation treatment on the basis of race it is also wrong to have double taxation of some people in this country and doubly wrong should that double taxation apply only to Maori organisations. So I accept that there is a need to remedy that flaw in our tax law. That is absolutely accepted. 
But we do not fix up one inadequate piece of law by replacing it with legislation based purely on race that confers a tax advantage on a race. For Dr Cullen to say that it does not confer advantage is not consistent with what the Finance and Expenditure Committee found. The select committee recommended that wholly owned subsidiaries should not be included. The reason the select committee suggested that—and Clayton Cosgrove was the chair of the committee—was that it could see that if a business was being taxed at a lower rate on profits that it had retained it had a competitive advantage in being able to invest more money in the future. It paid a lower tax on profits had more money to invest and therefore was at a competitive advantage. David Parker a new Labour member—he is an accountant—accepted very clearly the reality of that competitive advantage. The Government members of the select committee accepted that wholly owned subsidiaries should be excluded from this favourable tax rate. 
This is the sharp point. There are among Maori organisations businesses that are not wholly owned subsidiaries but come within the definition of Maori organisations in this bill. Major farming businesses some of the biggest farming businesses in our country will be able to compete ahead of other farming businesses to reinvest more in their business because they will be taxed at a lower rate. That is wrong. We do not fix up one problem by implementing an even greater wrong. Conferring greater benefit on the basis of race is not right for this country. 
I urge Labour to rethink what it is doing here. This will be very divisive. It is not good for New Zealand’s future. It will result in disharmony. It does confirm privilege under our tax laws purely on the basis of race. We reject that and I think most sensible right-thinking New Zealanders will reject that. The Government should go back to the drawing board and remedy the problem around the taxation of Maori authorities with new legislation that does not confer privilege on the basis of race. It is morally wrong to do that. 
GORDON COPELAND (United Future) 
: 
 I rise in support of the second reading of this important bill. Many of the bill’s provisions are non-controversial and are aimed at both reducing compliance costs for taxpayers particularly businesses and clarifying areas of uncertainty with regard to the present law. These provisions will be welcomed by all taxpayers.  
For example the provisions relating to charities will I believe be welcomed by that important sector. The change made is relatively minor but it is a precursor to the Government’s announced intention to establish a charities commission that will register and monitor the activity of that sometimes under-appreciated sector of New Zealand society. It is a sector that United Future wants to see strengthened in every way possible because it is so fundamentally important to the functioning of a robust civil society. For example research estimates that a dollar of social benefit delivered to families and individuals through charities would cost the taxpayer $2 were it to be delivered through the Government bureaucracy. Peter Drucker the guru of modern management and organisational excellence has concluded that charities are the most efficient organisations ever devised.  
There is one aspect of this bill however that has proved to be controversial and it relates to the new Maori authority tax regime. That has been signalled already by Dr Cullen and was well exemplified by the speech we have just heard from the Hon Lockwood Smith. It is a pity that this has become controversial because from a tax policy point of view the matter is clear and straightforward. The new rules simply align the rate of tax paid by a Maori authority with the marginal tax of its beneficiaries. In this particular instance a 19.5c in the dollar rate has been struck because that is the rate that will be paid by 90 percent of those beneficiaries. This in my view is exactly right in principle just as it would be right for a rate of 39c in the dollar to be struck if 90 percent of the beneficiaries of Maori authorities were in that tax bracket. Business New Zealand and other submitters to the Finance and Expenditure Committee expressed their wholehearted support for the new Maori authority regime and specifically asked the Government to extend its principles into other areas such as superannuation and life insurance funds so that there too the tax rate paid will coincide with the marginal tax rate of the members of those funds. Dr Cullen has indicated that at least in principle he agrees with those submissions.  
However the point I want to emphasise is that Maori authorities as defined in the bill are a reality and have their origins in the culture and customary practices of Maori prior to the arrival of other races in Aotearoa New Zealand. 
If our history had been different and the authorities involved were Vietnamese Chinese English or Scottish then that would not alter one iota the principles involved and any pretence to the contrary simply does not stand up to the analysis of common sense. In my judgement it is mischievous and shallow to attempt to classify the situation as an example of race-based laws. In that connection I add that it is also the conclusion of well-known tax commentator by the name of John Shewan of PricewaterhouseCoopers who has also come out publicly and said that this is not an example of a race-based law.  
However the other discussion on this issue centred on competition—the point dealt with by Dr Lockwood Smith. The argument was that the 19.5 percent rate for Maori authorities would give them a competitive advantage over other types of businesses that may be paying tax at say 33c or 39c in the dollar. I felt that argument was put to bed very clearly by Robin Oliver the general manager of tax policy for the Inland Revenue Department. He pointed out—in my view entirely correctly—that so long as we have a progressive tax system in New Zealand determined by income bands then similar organisations with relatively higher or lower tax would end up paying tax at different rates.  
Let us take an example. Let us suppose that there are two sole-trader panel-beating shops operating alongside each other. One shop is not faring too well and its owners are paying tax at 19.5c in the dollar. For the benefit of Dr Lockwood Smith I would like to point out that it does not matter whether that panel-beating shop is owned by a Chinese a Vietnamese a Scotsman or an Irishman—it has nothing to do with race. The other shop is a roaring success and its owners are paying tax at 39c in the dollar. [ 
Interruption 
] I am responding to the member’s challenge to Clayton Cosgrove to name any business owned by other than Maori that would be paying tax at 19.5c in the dollar. I am saying to him that any sole-trading panel beater of whatever race who is in that income bracket will pay tax at 19.5c in the dollar. In those circumstances how can we claim that the business paying the higher tax rate is at a competitive disadvantage? In fact it is obvious that it is exactly the other way around and that the poorer business—the guy who is making less money—is struggling. That exactly parallels the situation here.  
Whilst it may be true that profits retained by the Maori authority at least from a timing point of view attract tax at a lower rate than income retained by businesses paying say 33c in the dollar that is only one side of the coin. The other side alluded to in my example of the panel beaters has to do with the overall wealth of the organisation and in particular its access to new capital funding. When it comes to new capital Maori authorities are in reality at a competitive disadvantage for two reasons. Firstly as mentioned above 90 percent of their shareholders or beneficiaries are in the lowest income tax bracket—hardly a fruitful source for new equity. Secondly lending institutions are sometimes more reluctant to lend or lend at higher interest rates because of the communal land ownership structures that are a feature of these organisations. Personally I am entirely satisfied that when we look at the bigger picture the competitive argument can safely be dismissed.  
Perhaps I could conclude by emphasising how important it is for Maori business in New Zealand to flourish. As a nation we have growth aspirations and that will not happen unless Maori business also lifts its game and becomes more profitable. For that reason I would be very satisfied indeed if I should live to see the day when 90 percent of the beneficiaries of Maori authorities were paying tax at the top end of the bracket rather than at the bottom. United Future will support the second reading of this bill. 
Hon DAVID CARTER (NZ National) 
: 
 I was intrigued by that contribution from the United Future man Mr Gordon Copeland in which he attempted to argue to justify the special tax rate that has been apportioned to Maori authorities. It seemed to me that his basic tenet for his argument was that Maori were in this country first. 
Clayton Cosgrove 
: You were the finance spokesperson? 
Hon DAVID CARTER 
: I will add to that. I was also the chair of the Finance and Expenditure Committee that the member now chairs. I tell that member that if I had been there chairing the committee on this bill I would have done a far better job of this legislation than has been done with it. 
Clayton Cosgrove 
: Why did Bill English sack you as finance spokesperson? 
Hon DAVID CARTER 
: I do not know. The member will have to ask him. I tell him though that I have far more confidence in the man who is now our spokesperson on finance than I have in the person who is the Labour Party spokesperson on finance. I am absolutely sure of that.  
I want to speak about the special rate that has been created for Maori organisations. It does mean that there is a competitive advantage. People in business will now have the ability if they are a Maori authority to pay tax at a lower rate than a business operating right next door that is carrying out exactly the same business activity. 
Hon Tariana Turia 
: Be a Maori and try to get a loan from a bank. 
Hon DAVID CARTER 
: This legislation has nothing to do with getting a loan. This legislation sets the tax rates and the tax rates are paid only when that business is operating at a profit. I tell the member that this legislation has nothing to do with getting loans. One of the most successful corporations in the South Island is Ngai Tahu Holdings Corporation. It has done a superb job but it will now have a tax advantage. I sat on the Finance and Expenditure Committee briefly when Ngai Tahu appeared before it arguing in support of this legislation. I asked Ngai Tahu whether it was in a takeover for Shotover Jets a business that at that stage was and I think still is listed on the Stock Exchange and it said it was. I said to Ngai Tahu: “Having then successfully taken over that company you’re going to argue to the select committee that it should pay a tax rate of 19.5c in the dollar whereas Kawerau Jets which operates in opposition to it would then have to pay tax of 33 cents?”. To be fair to the select committee as I was on it only for that day I understand that it has picked up—[ 
Interruption 
] Mr Chairperson could I have a little bit of silence to outlay this argument. 
The CHAIRPERSON (H V Ross Robertson) 
: I remind members that running commentaries are out of order. If they would like to check that they can look at Speaker’s ruling 51/5(3). 
Hon DAVID CARTER 
: I pointed that out to the select committee and to its credit it now says that if a business such as Shotover Jets is a wholly owned subsidiary then it should not be entitled to the special concessionary tax rate. That goes some way to strengthening my argument that it is a concessionary tax rate. Let me tell members that any sharp accountant now has the opportunity to minimise the tax that companies will pay on a successful wholly owned subsidiary and end up making sure that the tax they have to pay is within the Maori organisation. They will therefore be paying it at 19.5c. If companies cannot employ accountants who can engineer that then they have a problem with their accountancy company. So they will have a competitive advantage.  
Let me take another industry in which Maori are very significantly involved and in which they do a very good job—agriculture. Many of their farms are owned collectively and are Maori organisations. They might exist right next door to a farm that is run or owned by Polynesians Chinese or Pakeha New Zealanders. 
Hon Tariana Turia 
: Individual choice. 
Hon DAVID CARTER 
: Yes individuals. Now under this legislation they pay substantially different tax rates. I say that is unfair.  
Hon Tariana Turia 
: Most of them are beneficiaries. 
Hon DAVID CARTER 
: Tariana Turia just keeps on interrupting. Because of the state of this economy most New Zealanders are not paying the top tax rate. Most New Zealanders who may own a few shares in a company like Air New Zealand do not pay 33c in the dollar. But do we create a special exemption for them? No we do not. So members should not come into this House and suggest that this legislation is not racially based because it is. This legislation is racially based because it gives one tax rate to people who are Maori and that tax rate is not available to anybody else. 
David Benson-Pope 
: What’s that member’s solution? 
Hon DAVID CARTER 
: Mr Benson-Pope now wants me to do the tax rate for the Labour Party. I will do it instantly. 
Jill Pettis 
: How? 
Hon DAVID CARTER 
: By bringing down everybody’s tax rate to 19.5c. That is the answer. It took as long as that to think of the answer. That is the solution. If everybody’s tax rates were brought down there would not be this problem. 
Darren Hughes 
: Why not 19 percent like yours? 
Hon DAVID CARTER 
: Mr Hughes does not know my tax rate—he does not know whether I am on 19 percent—and I am not about to tell him what it is.  
The other point I want to comment on is that this legislation also cements in the annual tax rates. I do not want to let an opportunity go by without saying that the tax rates in this country are now constraining growth. Helen Clark comes into the House in question time and time and time again she says there is no relationship between tax rates and growth and she would be the only informed economist in the world who would argue that. Even Dr Cullen cringes when Helen Clark makes those sorts of stupid remarks. 
Darren Hughes 
: Lindsay Tisch believes that. 
Hon DAVID CARTER 
: Lindsay Tisch can speak for himself and very shortly he will. He will make a very good speech. Two things are wrong with the current tax rates and there was an opportunity to do something about them. We had the stupid legislation that increased the envy tax—the 39c in the dollar tax rate—in the year 2000. In fact as a result of the surpluses it has been proved that the Government never needed to do that. It created all that inconsistency in tax law and resulted in people having to rush off to their accountant and say: “Corporatise me because I don’t want to pay 39c.” Thousands of people have done that. Sure they have complicated their own tax affairs but they are not paying 39c. It is relatively easy to set oneself up. But the sad thing is that the Government never needed to do it. It gained the Government around $400 million and that has not been necessary— 
David Cunliffe 
: Robin Hood in reverse. 
Hon DAVID CARTER 
: Robin Hood in reverse? No no. I come from a different philosophy from David Cunliffe’s. I do not think that because people are successful they should be penalised with more taxes. That is a nonsense point of view but I acknowledge that some people in the Labour Party feel that people should not be allowed to be successful and that if they are successful we should drag them down by putting up tax rates.  
My final point is one that Dr Lockwood Smith also made. It is about the recent OECD report that pointed out that it is actually ordinary New Zealanders who because of the cusp they are finding themselves on—they are moving into the next tax bracket about $38000—are paying far more tax now than they were. Lockwood Smith gave some very credible figures from that OECD report— 
Hon John Tamihere 
: Oh yes! Very credible. 
Hon DAVID CARTER 
: —that is if members accept the OECD reports. Mr Tamihere might have a “BS” description or a “blankety-blank” description of it but I do not. 
Clayton Cosgrove 
: I could use one about this member’s speech. 
Hon DAVID CARTER 
: I guarantee that Clayton Cosgrove has not even read the report which clearly states that people are paying more tax than they need to. 
CLAYTON COSGROVE (NZ Labour—Waimakariri) 
: 
 That was an amazing speech for a number of reasons. First for the first time in history David Carter admitted that Bill English did sack him as the Opposition spokesperson on finance—and after that contribution is it any wonder? The other startling thing in this debate is that the Minister of Finance got up—it is his bill—and spoke but there was no call from Don Brash the Opposition spokesperson on finance the one who blew David Carter away the one Bill English put in ahead of David Carter. I invite Don Brash the Opposition spokesperson on finance to get up and take a call. 
We heard some contributions from Dr Lockwood Smith and David Carter that basically dealt with two concepts. The first was the issue of high tax. They rabbited on about how allegedly New Zealanders are overtaxed. Dr Lockwood Smith said—I think this was the phrase he used—that these taxes impact on working-class New Zealanders. But he never acknowledged that a significant positive impact on working people and people down on their luck is what Governments do with their tax revenue. Governments can provide for example State housing—which that mob sold off—decent health-care and social services. That also has on the revenue side a positive impact on working people down on their luck. 
Lindsay Tisch 
: There are people living in caravans now. 
CLAYTON COSGROVE 
: The gnome at the end of the garden who keeps interjecting on me should actually stop take a breath and listen. The other issue that the National Party members raised in a sort of a race to win the redneck constituency was that Maori based on race are getting a better tax deal. I will make two points about that. 
Lindsay Tisch 
: Well they are. 
CLAYTON COSGROVE 
: I make two points to “Papa Smurf” over there. One is that a special tax rate for Maori has been around since 1939 and there has been the odd National Government in power since 1939. Why is there a special tax rate? Put simply—and I know that the scales will fall from that member’s eyes—it is because Maori authorities are different from commercial private sector entities. Why? They have constraints on them that other commercial private sector entities do not. Mr Tisch says he is a businessman. I say: “Wakey wakey! Prove it to us.” 
What are some of the constraints? Communal ownership is a constraint. Mr Tisch owns a business. If he wants to dispose of his business or his assets—and if his shareholders knew who were running it they would probably want that to happen—he can sell them. A Maori authority does not have that ability. Yes it has shareholders and yes it has beneficiaries of those assets but they are communally owned. I say again to that member: “Wakey wakey! Get the concept!”. Those authorities cannot dispose of the assets. They have certain commercial constraints on them. They cannot market their assets as that member can with his estate or his business or whatever he has. Therefore there is a disadvantage. 
I ask that member this: why if that policy is so wrong did his Government and subsequent National Governments since 1939 not correct it? Why did Dr Lockwood Smith who was in Government when there was a special tax rate not stand up then and make the lofty redneck speech he made today? Because deep down he knows that this policy is right. He sat on the Finance and Expenditure Committee and I was chairman and he made a positive contribution—more positive than he did today I have to say. He knows that this is right because of the constraints on Maori authorities. [ 
Interruption 
] 
I say to Mr Tisch who is interjecting that I am dumbfounded that we have not heard from Dr Brash. Maybe the reason that he has not taken a call today is that unlike Mr David Carter a member of the C team and unlike Dr Lockwood Smith he actually deep down believes that this policy is right. Deep down he believes and understands—unlike Mr Tisch Mr Carter and Dr Smith—that this is appropriate because he understands the commercial constraints put on Maori authorities. 
I say in conclusion that we have been attacked because of tax rates. The only solution that the National Party put out today in response to interjections from our side was a flat tax.  
Lindsay Tisch 
: Lower all taxes. 
CLAYTON COSGROVE 
: Say it again so that the people can hear! Mr Tisch says: “Lower all taxes.”—a flat tax. That is exactly the policy for which National was done over by the electorate the policy that the people of New Zealand rejected—not once but twice. They will do so a third a fourth and a fifth time and for ever more. [ 
Interruption 
] The ACT party member joins the cry for a flat tax; his leader wants one as well and that is why he has only seven or eight and a half or nine members or whatever it is. 
One fact that the National Party will never stand up and acknowledge is that regardless of what it says about our tax rates we have achieved growth of 3.9 percent one of the best in the OECD— 
Lindsay Tisch 
: Ha ha! 
CLAYTON COSGROVE 
: Mr Tisch laughs. I thought he was a man with some commercial and economic acumen. Obviously that notion has been blown away. 
We have created 123000 new jobs. Unemployment is at a 20-year low—4.9 percent. I come back to it: we get criticised by National members for our tax rates but there is no policy solution from them. They fail to acknowledge that the more important thing is not the tax rate but what a Government does with the tax what it does to redeploy that revenue to our communities where it is needed—to our working people through housing the health system and social services and so on. That outfit across the floor—I say “outfit” because it is not really a political party—never did that in 9 years and that is why—[ 
Interruption 
] 
I can handle “Papa Smurf’s” interjections—no problem. I relish them because every time he interjects he shows his ignorance and every time he interjects he puts another nail into the National Party coffin because he has learnt nothing and his party has learnt nothing. The people told that member twice in two elections that they reject a flat tax that they reject his policy. But no National members have nailed their colours to the mast. I as a Labour Party member am pleased they have. I really am rapt they have not changed their policy. They have changed their spokesperson on finance three times and the failed one got up to take the call on this bill. He is the one who spent only 5 minutes on the select committee the failed one the one who got sacked. Dr Brash has not got up and taken a call yet he is the Opposition spokesperson on finance. He may well want to get up and take a call because I think there is a shred of decency in Dr Brash. Probably the reason that he has not taken a call is that he actually agrees with this bill. 
I commend the bill to the House. I think it is sound legislation. I endorse Mr Copeland’s speech and he made a fantastic contribution to the select committee. I hope we can get away from the redneck racist despicable sorts of antics that we have seen in this House and actually talk about some solutions and the positive nature of this bill. I endorse the bill. 
CRAIG McNAIR (NZ First) 
: 
 I take pleasure in rising to speak on behalf of the New Zealand First Party on behalf of my New Zealand First colleagues on the Taxation (Annual Rates Maori Organisations Taxpayer Compliance and Miscellaneous Provisions) Bill. I had to take a big deep breath to say that; it is a quite long title. But I am not going to criticise the Government for having a long title; we are not speaking to the title. 
Debate interrupted. 
The House adjourned at 6 p.m.