Volume 681 Week 15 - Tuesday 26 June 2012 
Text is incorporated into the Bound Volume 
Volume 681 Week 15 - Tuesday 26 June 2012 
[Sitting date: 26 June 2012. Volume:681;Page:3271. Text is incorporated into the Bound Volume.] 
Tuesday 26 June 2012 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Obituaries 
Major Hone Hikitia Te Rangi Waititi QSO 
Hon PAREKURA HOROMIA (Labour—Ikaroa-Rawhiti) 
: 
 I seek to move a non-debatable motion relating to the passing of Major Hone Hikitia Te Rangi Waititi QSO JP. 
Mr SPEAKER 
: Is there any objection to that course of action being followed? There is none. 
Hon PAREKURA HOROMIA 
: Ka whakatau ahau 
 Kia arongia e te Whare tenei arakua rere atu a Hone Hikitia Te Rangi Waititi QSO tetahi o nga tino pakeke o tatou te rangatira morehu o Te Ropu Maori e 28 a ngauhia ana o tatou ngakau puta noa te motu e tenei ngaronga tangi ana hoki 
. 
[ 
I move  
That the House note that Hone Hikitia Te Rangi Waititi QSO one of our great elders an esteemed survivor of the 28th Maori Battalion has passed on and that Maoridom throughout the nation feel this loss and grieve as well.] 
Major John Waititi was the last surviving company commander of the 28th Maori Battalion in C Company. He fought in World War II and was well respected and loved by his company. He was a humble man with strong leadership characteristics. He went to Te Aute College from 1935 to 1938. While over in Italy he was wounded three times. From there the company moved on to fight in North Africa and Italy. Major Waititi said the comradeship of C Company was cemented on the battlefield of about a dozen battlefields from Olympus Pass to Cassino: “You develop this closeness because you realise if it wasn’t for your mates then you might have lost your own life. They were there to cover me. I covered them. These things are set aside as being sacred to us particularly those relating to the men who died.” 
Following Major Hone Waititi’s return to New Zealand he was elected president of the Maori Battalion. He and his first wife Mataku Allison farmed at Te Waiti. Much later in life he married his current wife Judy Clifford-Waititi and they have two children Kahurangi and Haimoana. 
Major John Waititi looked after his men when they returned creating employment opportunities and doing what he could to support them to return to life back in New Zealand. I had the privilege of attending his 90th birthday. He was a rare breed and a special man. He will be sorely missed by all Maoridom and New Zealanders generally. He has returned to his ancestral marae of Kauaetangohia in Cape Runaway where he will lie in state until Thursday. 
Motion agreed to. 
Questions to Ministers 
Better Public Services Targets—Announcement 
1. 
JOHN HAYES (National—Wairarapa) 
 to the  
Minister of Finance 
: What steps is the Government taking to get better results and value for money from the public service? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The Government is determined to continue to provide a high-level if not better Public Service with less resource so we have set ambitious targets across 10 results which were announced yesterday. The targets focus on difficult issues like reducing crime reducing long-term welfare dependency and reducing educational underachievement. Progress will be reported regularly as data becomes available so New Zealanders can see how we are tracking. 
John Hayes 
: Why is getting better results important? 
Hon BILL ENGLISH 
: As we have worked through in tougher times Government spending it has become clear that the previous Government liked to demonstrate that it cared by getting more money. We are going to show that we care—and we are showing that we care—by getting actual results. We have been shifting the Public Service culture in this direction. Keeping one more teenager on the rails is actually the lowest-cost result that we can get so it is a better Public Service and we save money. 
Hon David Parker 
: Does his target for benefit numbers mean that the number of people on working-age benefits in 2017 if he achieves his target will be 20000 higher than when he took office 9 years earlier if New Zealand is unlucky enough to still have him in power? 
Hon BILL ENGLISH 
: And it is only the residents of “Planet Labour” who overlook the fact that there was a global recession along the way. 
Hon David Parker 
: I raise a point of order Mr Speaker. The Minister did not address my question as to whether my figure was correct. 
Mr SPEAKER 
: Well if the member wanted his question answered he should not have put the last bit on the question. I am afraid that he gave the Minister a let off the hook that way. 
John Hayes 
: How will the Government and the Public Service go about achieving better results? 
Hon BILL ENGLISH 
: In the first place by focusing on making a difference rather than just getting more money which has been the culture up to 2009. Secondly by working more closely together among departments. But thirdly by looking around the wider community to see who can help us with getting higher levels of educational achievement or less offending in prison. Under the National-led Government the Public Service is not so arrogant that it believes everything has to be run by the Public Service. 
Rt Hon John Key 
: Has he seen any reports that the Government’s attempt to quantify 14 different outcomes is “pretty meaningless stuff” and does he think it is pretty meaningless stuff to be tackling rheumatic fever abuse of children and better education for New Zealanders—is that pretty meaningless stuff? 
Hon BILL ENGLISH 
: I saw a report—well I heard a report that I did not initially believe actually because it was a quote from some chap called Chris Hipkins from the Labour Party who said of these result areas—better educational achievement less crime and fewer vulnerable children—“It’s actually pretty meaningless stuff.” And on “Planet Labour” I think it is. 
State-owned Energy Companies Sales—Potential Legal Challenges and Directors’ Fees 
2. 
DAVID SHEARER (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he stand by all his statements? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes. 
David Shearer 
: In light of his statements concerning litigation around the plan to sell off shares in Mighty River Power is it the Government’s intention to hold back some of the 49 percent of the Mighty River Power shares it is privatising to cover the risk to the Government of a successful challenge from Tuwharetoa; if so what is that percentage ? 
Rt Hon JOHN KEY 
: No. 
David Shearer 
: Was the risk to the taxpayer of any litigation identified by the time of the Budget; if so was it included as a specific financial risk quantified or unquantified? 
Rt Hon JOHN KEY 
: There is always litigation risk. That has always been known. The likely effect of that is not cost; the likely effect of that would be delay. 
David Shearer 
: Is it the Government’s intention that the taxpayer may need to therefore bear the risk of the Tuwharetoa or Maori Council challenge in court; if so is this a deliberate protection of companies and individuals contemplating buying shares? 
Rt Hon JOHN KEY 
: We live in a democracy where people have the right to test their legal rights in court if they choose to do so. Whether someone would be successful in getting such an application heard in the courts or successfully judged in the courts is a completely different issue. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. That was an interesting answer but not one to the question that was asked. The question that was asked went to who was bearing the risk: whether it was the taxpayer or the purchasers. That was not addressed. 
Mr SPEAKER 
: I will allow the Leader of the Opposition to repeat his question for avoidance of any doubt. 
David Shearer 
: Is it the Government’s intention that the taxpayer bear any risk of Tuwharetoa’s or the Maori Council’s challenge; if so is this a deliberate protection of companies and private individuals contemplating buying shares in Mighty River Power? 
Rt Hon JOHN KEY 
: There would not be a financial risk; there could be a time risk. 
David Shearer 
: Did his Government encourage the board of Mighty River Power to increase salaries before partial privatisation in order to avoid the embarrassment of salaries skyrocketing after the sale? 
Rt Hon JOHN KEY 
: No. I would note that in the 9 years that Labour was in office the chief executive’s salary at Mighty River Power trebled. 
David Shearer 
: In light of his answer did he think that was a good justification for the increase in salaries this time around with Mighty River Power? 
Rt Hon JOHN KEY 
: Contrary to what the member might think I have not been asked about salaries today; I was asked about directors’ fees. 
David Shearer 
: Has he seen the analysis by Ernst and Young that Mighty River Power Genesis and Meridian Energy are well run by international standards and is he therefore aware that any effort to extract further profits from these companies will be at the risk of either asset stripping or increasing power prices? 
Rt Hon JOHN KEY 
: If they want to increase power prices all they need to do is go and ask Labour because Labour got them up by 72 percent. 
Dr Russel Norman 
: In his answer to the earlier question is the Prime Minister now admitting that the legal action or potential legal action from Tuwharetoa and the Maori Council could delay the asset sale programme? 
Rt Hon JOHN KEY 
: There is always that risk from litigation; that has been known for a very long period of time. I do not think it is necessarily likely. I am just saying that that is always a possibility. 
Dr Russel Norman 
: Given his reported statement that he is unconcerned and unsurprised that directors’ fees would double if his asset sale policy goes ahead why did he not tell New Zealanders earlier that privatisation would mean that power company directors would see their pay double paid for out of power bills? 
Rt Hon JOHN KEY 
: I am not sure I have ever been asked that question either. I was asked about an increase in the fees for the directors of Mighty River Power not in the context of what percentage they were moving. It is worth remembering that Mighty River Power is a company of revenue in the order of about $1.5 billion so changes of the magnitude that has been outlined by the member are not likely to have any impact on power prices. 
Dr Russel Norman 
: Has the Prime Minister seen the document from Treasury that indicates that director fees are likely to double and where does he think these companies are going to get the money from if not from consumers? 
Rt Hon JOHN KEY 
: No I have not seen that report. Secondly I think it is very unlikely. History tells us that companies that are run privately where they are listed on the stock exchange have continuous disclosure and are open to all of the analysis by stockbrokers and by analysts in the market tend to be better run. 
Better Public Services Targets—Reducing Long-term Welfare Dependence 
3. 
MELISSA LEE (National) 
 to the  
Minister for Social Development 
: What commitments has the Government made to reduce long-term welfare dependency? 
Hon PAULA BENNETT (Minister for Social Development) 
: 
 As part of this Government’s Better Public Services programme we have committed to reducing the number of long-term beneficiaries. After legislation changes next year this will combine those currently on the unemployment-related benefit sickness benefit DPB with children over 14 years widows benefit and women alone benefit. Jobseeker support is projected to have 130000 people on it 78000 of whom will have been on a benefit for more than 12 months. We will reduce that by 30 percent. 
Melissa Lee 
: How does this target to reduce long-term welfare dependency fit with the Government’s current welfare reforms? 
Hon PAULA BENNETT 
: This is part of our investment approach. Under the welfare reform programme when you look at how we are going to work with people who are on benefits the reality is that for those who are particularly on benefits long term and for longer than 12 months I think they can expect to see more support going into them more help for the training that they need to get them into work and the upskilling to help them get those jobs that they desperately want and need. 
Jacinda Ardern 
: Does she consider her target to reduce the number of long-term beneficiaries by 30 percent by 2017 ambitious enough when it means the number will still be 20000 higher than when she took office? 
Hon PAULA BENNETT 
: That is not actually factually correct and I will take the member through as to why. 
Jacinda Ardern 
: Show me. 
Hon PAULA BENNETT 
: I can take the member through actually and I am quite happy to table this if that would help. So for an example in March 2007 considering those who were on the unemployment benefit those who were on the sickness benefit and those who were on the domestic purposes benefit with children aged 14-plus we had 61551; in March 2008—if that helps the member—we had 52288. Look at the policy. If the member looks at the target how we are making it up and the reductions 20000 is factually incorrect. 
Hon David Parker 
: I raise a point of order Mr Speaker. I would take the Minister up on her offer to table that document. 
Mr SPEAKER 
: Order! If the Minister was quoting from an official document—[ 
Interruption 
] It is not an official document so the member cannot— 
Hon David Parker 
: I raise a point of order Mr Speaker. The Minister said during her answer to the question that she was willing to table the document. 
Mr SPEAKER 
: Order! It is absolutely up to the Minister. Members cannot raise points of order about that matter. 
Hon David Parker 
: I raise a point of order Mr Speaker. Next time the Minister makes that statement should I take a point of order that her statements are— 
Mr SPEAKER 
: Order! The House does not need to waste time like this. The member knows that if Ministers are quoting from official documents the member can most certainly require to have them tabled. We checked and the Minister has advised that it is not an official departmental document. It is presumably information prepared for her answer and it is up to her whether she seeks leave to table it. We will see what happens shortly. 
Melissa Lee 
: How many people currently on benefits who have been on for longer than 12 months will be included as part of this target? 
Hon PAULA BENNETT 
: I think this might help with the previous question as well. As at April 2012 135416 people were receiving benefits that will make up jobseeker support. Of this number 78074 had been receiving a benefit for more than 12 months. This is made up of 38927 who are receiving the sickness benefit 23031 who are receiving the unemployment benefit or unemployment training 12212 who are receiving the domestic purposes benefit—sole parent—and 3904 who are receiving the widows benefit. That is how that benefit is made up. Those are the ones who have been on benefits for longer than 12 months. Those are the ones that we will be reducing. 
Hon Paula Bennett 
: I seek leave as I think we should do at the end of our question not the middle of it— 
Mr SPEAKER 
: Order! Order! The Minister will just seek leave. 
Hon PAULA BENNETT 
: I seek leave to table a document that was made up by my office but which does give the numbers of those who have been on long-term benefits from March 1997 to March 2012. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 









Document by leave laid on the Table of the House. 
Economy—Targets 
4. 
Hon DAVID PARKER (Labour) 
 to the  
Minister of Finance 
: Does he stand by his statement that “We are a government that thinks getting results is what’s really important”? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes particularly when you look at the progress we have made. We inherited an economy that had been in recession for a year forecasts of never-ending deficits ever-rising Government debt record net international liabilities approaching 85 percent and a near-record current account deficit of 8 percent of GDP. Despite many difficulties since all of these have improved. 
Hon David Parker 
: As part of the Better Public Services targets he announced yesterday did he give Treasury targets and milestones for wage growth overseas debt reduction or export growth? 
Hon BILL ENGLISH 
: Measures of those are made every day. The accountability for economic management is crystal clear and occurs every time new data becomes available. The member knows that because he comments on it regularly. 
Hon David Parker 
: I raise a point of order Mr Speaker. My question was whether he had given Treasury targets not what the historical figures are. 
Mr SPEAKER 
: The member’s point is absolutely correct. He asked a dead straight question. He asked whether or not Treasury had been given targets for those matters. 
Hon BILL ENGLISH 
: No. 
Hon David Parker 
: As part of the Better Public Services targets he announced yesterday did he give Treasury targets for making New Zealand superannuation sustainable? 
Hon BILL ENGLISH 
: If the member actually read the results that were published yesterday he would see that they do not include those targets. 
Mr SPEAKER 
: Order! Order! The question was not a loaded question. It was a reasonable question and therefore the questioner should not be abused. The questioner asked whether Treasury had been given targets for sustainability of superannuation. I call the Hon Bill English. 
Hon Gerry Brownlee 
: We’re now on to yes or no answers. 
Mr SPEAKER 
: Order! The Hon Bill English is to answer the question. 
Hon BILL ENGLISH 
: The Government published the results for the Public Service yesterday and the suggestions that the member is making are not on that list. If he read it he would know that. 
Hon David Parker 
: In the 4 years approximately that he has been in Government what targets has he set pursuant to his promises to close the wage gap with Australia and have those targets if any been met? 
Hon BILL ENGLISH 
: As the member will know the Government set a target by means of the 2025 Taskforce on closing the gap with Australia. Along the way as we have discussed in here a number of times the net after-tax wage gap with Australia has closed slightly. 
Young Offenders—Vetting of Child Youth and Family Placements 
5. 
METIRIA TUREI (Co-Leader—Green) 
 to the  
Minister for Social Development 
: Have Police CYFS medical and referee checks been carried out for all current placements by CYFS under referral by the Youth Court; if not why not? 
Hon PAULA BENNETT (Minister for Social Development) 
: 
 To clarify with reference to this question which is quite detailed and quite complicated the Youth Court’s role is not to refer young people into placements. The Youth Court is a specialised criminal court. Aside from the most serious offences where the Youth Court might place a young person into Child Youth and Family custody—generally a placement in a residence—the custody of the young person remains with their parents or caregivers. As a result of offending a family group conference may come up with a plan for the young person. This may include whom they live with. This is not a Child Youth and Family placement. However under a recent policy change criminal checks are now done after a youth justice family group conference. 
Metiria Turei 
: Can the Minister assure the public that the full suite of checks are now mandatory for all referrals that come from family group conferences through the Youth Court given that her deputy chief executive said on Sunday that staff were expected to do police checks only if there were concerns with the placement? 
Hon PAULA BENNETT 
: I am told that because of the policy change that went through earlier this year mandatory checks are now being done on all family group conference placements for youth justice and not just police checks but also Child Youth and Family checks and follow-ups. It is part of our strengthening that process and taking a higher level of responsibility I think for the outcomes of those family group conferences. 
Metiria Turei 
: Will the Minister commit to undertaking full police checks for all current placements via family group conferences where those police checks have not been done? 
Hon PAULA BENNETT 
: I would have to seek advice on that as to what kind of resource that would need and how that would look going backwards. As I say it has been happening since the policy changed this year but I would have to take advice on what the capability and the capacity are to do that. 
Metiria Turei 
: What is the Minister doing to identify young people who have experienced abuse as a result of this gap in the policy? 
Hon PAULA BENNETT 
: What we have done is greatly increase our monitoring. I would say that particularly with the youth justice side it has not perhaps been as tight as we would like it to be or as consistent so we have now gone back and we are making sure that that monitoring into homes is a lot tighter. What we have also done is really increase our resource both financially and in people resource into historical claims. For example since 2008 this Government has actually settled 272 claims. Prior to that only 54 had been done. So I do say to anyone who thinks they might have historical cases of abuse against them to bring them to the State. We want to hear their story. We want to do everything we can to settle that to help them move on in their lives. 
Metiria Turei 
: Is the Minister confirming that compensation is available to young people to help mitigate the long-term effects of abuse that they may have suffered while in State care? 
Hon PAULA BENNETT 
: Yes and we put more money aside for historical claims of abuse in the previous Budget as well. I cannot remember what that number is but it was a significant amount of money put in for historical claims. 
Metiria Turei 
: Will the Minister now ask Child Youth and Family to fully evaluate the effectiveness of its mandatory checking processes both for the custody cases and for Youth Court family group conference referrals? 
Hon PAULA BENNETT 
: Constantly. I must admit that I asked the officials before I came down whether I could give an assured guarantee that everybody is. They have told me that the policy is being changed. It is the expectation and there are checks that are done through the system to make sure that it is being done at 3-monthly intervals as it is done anyway. 
Metiria Turei 
: What guarantee can the Minister give to New Zealanders to assure them that children in Child Youth and Family placements or those processed through Child Youth and Family will not suffer abuse and neglect at the hands of those whom Child Youth and Family place them with? 
Hon PAULA BENNETT 
: On the case that has been brought up in the last couple of days I do have to make a clarification that the young person was not placed by Child Youth and Family. It was very much a family group conference. That young person was not under the care of Child Youth and Family. However—rightly so I think—Child Youth and Family has stood up and said that the abuse of this young person by their uncle was absolutely horrific and that systems could be changed and it has done that. But actually there were nine people in that family group conference. She herself said on TV that there were family members who knew the man was a convicted rapist and did not speak up and as such kept those kinds of checks and balances from being done. So I would say that yes Child Youth and Family most certainly has a role to play but so do extended whanau and the community themselves. 
Better Public Services Targets—Advanced Trade Qualifications Diplomas and Degrees 
6. 
COLIN KING (National—Kaikoura) 
 to the  
Minister for Tertiary Education Skills and Employment 
: How is the Government working to encourage economic growth with a more highly skilled workforce? 
Hon STEVEN JOYCE (Minister for Tertiary Education Skills and Employment) 
: 
 Demand for highly skilled or degree-qualified people is expected to continue to grow and on current trends to exceed supply by 2018. We therefore are working to ensure we have the right people with the right skills to fill these gaps. That is why the Government has set a target of having 55 percent of 25 to 34-year-olds with a level 4 or above qualification by 2017. That would mean a further 11250 people with a level 4 or higher qualification over and above the growth we will achieve with current policy settings. People earning a level 4 or above qualification obtain a significant income premium and a greater likelihood of sustained employment. 
Colin King 
: How will the Government achieve this level 4 and above qualification target? 
Hon STEVEN JOYCE 
: To increase the growth in the number of people with advanced trade qualifications diplomas and degrees we need to further increase enrolments within the tertiary sector continue to improve tuition quality and completion rates put a greater focus on achievement at foundation levels and continue to increase institutional performance. We have already taken a number of steps to improve performance but this target will be a big challenge for providers and Government agencies alike to achieve. 
Grant Robertson 
: Can the Minister confirm the State Services Commission statement that “The proportion of the 25 to 34-year-old population with qualifications at level 4 or higher was growing steadily up until around 2009.” and can he think of an event that occurred in November 2008 that might have caused that growth to flatten off? 
Hon STEVEN JOYCE 
: The Government has achieved many things but reporting on the tail of what had been happening at tertiary institutions minutes after we achieved office is not actually one of those things. There certainly was a decline. Actually my figures say that it flattened out in 2007. If we look at Bachelor’s degree achievement in New Zealand it is quite revealing. In 2006 we had a peak of around 29000. It dropped back to 26000 then was 28000. In 2011 the provisional numbers say nearly 31000 people achieved degrees in New Zealand and it is predicted to be above 31000 and then above 32000 for all of the next 5 or 6 years. That is real progress but we do need to achieve more. 
Grant Robertson 
: In light of the Minister’s comments I seek leave to table the “Better Public Services: Boosting skills and employment” document which says that— 
Mr SPEAKER 
: The source of the document? 
Grant Robertson 
: The State Services Commission. It says that qualifications at level 4 or higher were growing steadily up until around 2009 and since then have flattened off. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 









Document by leave laid on the Table of the House. 
Superannuation—Effect of Immigration 
7. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
 to the  
Prime Minister 
: Does he stand by all his statements? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes. 
Rt Hon Winston Peters 
: Does he stand by his statement at the Monday 18 June press conference on the impact of immigration on entitlement to New Zealand superannuation where he said: “Yes there are some people who come to New Zealand and either are in the workforce for a short period of time or not [in the workforce] at all but for the most part they’re a very small group.” 
Rt Hon JOHN KEY 
: Yes; and I advise that those who get New Zealand superannuation are 592470 and those who have qualified at over 55 years of age and therefore got New Zealand superannuation but would not have worked for very long are 14135. 
Rt Hon Winston Peters 
: Did he mislead the public by selectively using the number of 14135 immigrants aged 56 and over who are already receiving New Zealand superannuation rather than reveal the full real extent of entitlement to New Zealand superannuation when Immigration Service statistics show that 15499 people just in the 60 and over bracket—not 55 and over; the 60 and over bracket—have been granted residence from non - reciprocal pension agreement countries and will be entitled to New Zealand superannuation after only 10 years? 
Rt Hon JOHN KEY 
: No and anybody who is here for 10 years or longer is entitled to New Zealand superannuation. The advice I have had is that the number for those aged over 55 is 14135 of which the estimated Chinese number is 3444—not 22000 as per the Dominion Road Chinese restaurant. 
Rt Hon Winston Peters 
: So is he saying that this Department of Labour source document showing that the number for non-reciprocal arrangement countries for age 60 and over—just that small category; not 55-plus but 60 and over—is 15499 precisely; and does he not acknowledge that the changes introduced to immigration policy in May of this year in the parental category are a belated response to the huge influx of migrants who will after only 10 years residency be entitled to full New Zealand superannuation? 
Rt Hon JOHN KEY 
: What is true of what the member says is that the Government has tightened up the provision in the way that it allows people in. The Ministry of Social Development numbers we have are 14135 and of that 3444 are likely to be people who have come and not been in the workforce either at all or very little who are Chinese and getting New Zealand superannuation not 22000 as the member has made out. 
Rt Hon Winston Peters 
: Can the Prime Minister not seem to understand that the figure of 15499 is the entitlement figure which was the subject of the debate he spoke to the press conference about; and does he not understand that this superannuation policy is highly accessible and generous to those admitted through parental reunion from non - reciprocal pension agreement countries who may make no contribution at all before qualifying after 10 years? 
Rt Hon JOHN KEY 
: Unless I am missing something 15000 or whatever number he has got from the Department of Labour or 14135 which is the number I have got from the Ministry of Social Development—both those numbers are a hell of a lot less than 22000 Chinese people on which the best advice I have had is 3444. 
Rt Hon Winston Peters 
: Who said that the figure was 22000 Chinese people— 
Hon Members 
: You did. 
Rt Hon Winston Peters 
: Oh no no—no no. 
Mr SPEAKER 
: Order! The member will resume his seat for the moment. [ 
Interruption 
]—Order! I am on my feet. The member is entitled to ask his question without an answer in unison like that. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. The point that I thought you were going to get on your feet for was the suggestion that you had in fact made that figure up. [ 
Interruption 
] 
Mr SPEAKER 
: Order! I was more keen to enable the right honourable gentleman to ask his question than be worried about myself but members should be aware of that. They should not interject in that way either because if they say “you” it does mean the Speaker. 
Rt Hon Winston Peters 
: Where in the speech or the press conference following that speech by the leader of New Zealand First is there any reference to the 22000 being Chinese only; second does he not understand that in the 50-plus category which is the third measurement the figure was beyond 26000? So in short he is just blatantly misleading the public with selective micro figures. 
Rt Hon JOHN KEY 
: I am prepared to accept that when the member was talking in hushed tones about some Chinese dude he had once met who hung out somewhere and who could not back up his numbers but liked chicken chow mein from a Dominion Road Chinese restaurant then I may have got it slightly confused. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. The Prime Minister can ramble on as much he likes. 
Mr SPEAKER 
: Order! [ 
Interruption 
] Order! No wonder I am on my feet. I invite the right honourable member to go back and read the  
Hansard 
 of his question. Given the question asked the Prime Minister had a lot of licence in how he answered. I see very little grounds for any point of order over the Prime Minister’s answer but I am prepared to listen. 
Rt Hon Winston Peters 
: I do not think I need the  
Hansard 
; I have got the question right in front of me. None of that enables the Prime Minister surely within the Standing Orders— 
Mr SPEAKER 
: Order! The member cannot raise points of order in that way. If in fact as he claims he asked exactly the question that he had written in front of him I would be very surprised. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. The fact of the matter is the Prime Minister was asked to verify where he got his statement from— 
Mr SPEAKER 
: Order! The member is not going to debate with the Speaker. The only reason why the member’s question was possibly within the bounds of supplementary questions was the Prime Minister had mentioned the member’s speech in his answer. The member could not possibly have predicted the Prime Minister was going to mention the member’s speech in his answer so he could not possibly have prepared a supplementary question that he wrote out on the basis of that answer. That is why I made the point that I just did as Speaker. As I say given the question the member asked the Prime Minister had wide licence in how he answered it. 
Rt Hon Winston Peters 
: Supplementary question— 
Mr SPEAKER 
: The member has already had five supplementary questions I am afraid. That has used the entitlement for New Zealand First. Fortunately I did not hear that final interjection. 
Rt Hon Winston Peters 
: In accordance with Speaker’s ruling 148/4(1) I seek to table a document setting out the 15499 figure for the 60-plus group alone. 
Mr SPEAKER 
: The source of the document? 
Rt Hon Winston Peters 
: The Department of Labour collation. 
Mr SPEAKER 
: Leave is sought to table a Department of Labour collation. Is there any objection? There is no objection. 









Document by leave laid on the Table of the House. 
State-owned Energy Companies Sales—Chief Executives’ Salaries and Payments to Board Members 
8. 
Hon CLAYTON COSGROVE (Labour) 
 to the  
Minister of Finance 
: Does he stand by his statement regarding SOE chief executive salaries that “There’s a couple of bigger pay increases I think three with the energy companies which will be probably related to the share float that’s coming”; if so does he support the $451873 pay increase for the Chief Executive of Mighty River Power whose pay is increasing from $1317469 to $1769342? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 As the member will know from his time as Minister of State Owned Enterprises Ministers are not involved in setting the pay. There are a number of considerations that the board of Mighty River Power would be taking into account but we would urge the energy companies to show restraint because that is the current mood of the country. 
Hon Clayton Cosgrove 
: Is he aware that since Contact Energy was privatised remuneration for the board increased from $385000 to $1008000; if so what guarantees can he give New Zealanders that the same thing will not occur on the boards of Mighty River Power Genesis Power and Meridian Energy after they are sold off? 
Hon BILL ENGLISH 
: I was not aware of that. 
Hon Clayton Cosgrove 
: What guarantees can he give New Zealanders that these substantial costs like big pay increases to board members and chief executives and $120 million spent on merchant bankers to do the deal will not be clawed back through higher power prices on the back of consumers? 
Hon BILL ENGLISH 
: As has been discussed in this House over recent weeks the improved competitiveness of the electricity market means that no company can afford to indulge in unnecessary spending and automatically get that back off customers. They used to be able to do that when Labour was running these companies when chief executives’ salaries trebled and power prices went up 72 percent in 8 years. 
Hon Clayton Cosgrove 
: Given that he has stated that the sale of State-owned assets is all about “reducing debt” why is his Government doing everything it can to reduce the amount it will receive from the sales through the issuing of free loyalty bonus shares and the setting aside of additional shares for the settlement of Treaty claims not to mention big pay rises for chief executives and boards et al.? 
Hon BILL ENGLISH 
: Well the Government is striking a reasonable balance between getting good value for taxpayers and achieving our objectives of 51 percent Crown ownership and widespread Kiwi ownership of these companies. I notice the member is increasingly agreeing with the policy because now his party has promised not to buy these companies back. 
Road Safety—Changes to Give-way Rules 
9. 
JAMI-LEE ROSS (National—Botany) 
 to the  
Associate Minister of Transport 
: What reports has he received on the public’s understanding of the new give way rules? 
Hon SIMON BRIDGES (Associate Minister of Transport) 
: 
 I am informed that Kiwis are giving way like never before. We are a little over 3 months into the change and I want to give credit to Kiwi drivers for the smooth switch-over to the new give-way rules. In April the New Zealand Transport Agency commissioned a survey of a thousand drivers. It shows high levels of awareness and understanding of the rule changes: 90 percent of respondents chose the correct option when asked which vehicles give way at an uncontrolled T-intersection compared with just 61 percent surveyed in February. For the right-hand turn rule 89 percent answered correctly compared with 74 percent in the earlier survey. 
Jami-Lee Ross 
: Are there any other indicators that show that drivers are adjusting well to the changes? 
Hon SIMON BRIDGES 
: More good news for the House. To date there have been no serious incidents attributable to the changes. AA Insurance has reported only a handful of claims for minor crashes. There were a few very vocal critics who predicted widespread chaos and argued Kiwis would not be able to cope with the changes. These naysayers have been proved wrong. 
District Health Boards—2012 Community Pharmacy Services Agreement 
10. 
Hon MARYAN STREET (Labour) 
 to the  
Minister of Health 
: Does he stand by all the answers given on his behalf to Oral Question No. 6 on Thursday 21 June? 
Hon TONY RYALL (Minister of Health) 
: 
 Substantially yes though I understand that where Mrs Goodhew referred to a document being sent out on 1 June it was in fact put on the internet and made available to everybody with notification. The district health boards have been in negotiation with pharmacy businesses for some time and we are now moving to a new contract which recognises the considerable clinical expertise that pharmacists have instead of just paying them for filling bottles and containers. There are around 950 pharmacy businesses. Two-thirds are represented by the Pharmacy Guild. I have spoken to the guild today and although there are some individual businesses with issues signed contracts are pouring in and the guild is happy the district health boards are doing everything possible to meet its pharmacy members’ needs. 
Hon Maryan Street 
: In the light of that answer do I take it that the reason that some pharmacists were seeing a copy of their 163-page contract for the first time as late as midday last Friday was that they were meant to go to the website to discover it on 1 June? 
Hon TONY RYALL 
: People were made aware that a copy of the contract was available online on 1 June. Individual PDFs were sent out from 6 and 7 June with some occurring slightly later than this. I am aware of one situation down south where because their contract was not varying from that appearing on the website they did not receive a physical copy until a bit later on. But the only variation from what was on the website was that their name was filled in. 
Hon Maryan Street 
: Will the fees that apply from 1 February 2013 be included in the contract that pharmacists are being asked to sign by 5 p.m. today or if one listens to the Pharmacy Guild by 13 July or by 23 July; if not can he guarantee that pharmacists will not be worse off after 1 February 2013? 
Hon TONY RYALL 
: As the pharmacy businesses will know the latest advice I have received is that over 60 percent of pharmacy businesses in New Zealand have already returned signed contracts or indicated that they do intend to sign the contracts. The fees payable from 1 February are the subject of some continuing negotiations between various working parties. But what the district health boards have indicated is that the quantum of annual funding will remain the same. There is no reduction on what we are spending this year that I am aware of. 
Hon Maryan Street 
: Can he guarantee that the new contract will meet the requirements of high-needs communities and will not threaten patients’ safety as one pharmacist in a high-needs area has put it? 
Hon TONY RYALL 
: I think if we are moving from a system where we pay pharmacists money for every bottle and container of medicine they pour some pills or some liquid into to one that rewards them for the care and the use of their clinical skills that is a win-win not only for pharmacy but also for high-needs patients. 
Hon Maryan Street 
: Will he address the current chaos in this sector and simply instruct the district health boards to roll over the existing contract until such time as all the concerns around the professional and financial matters that pharmacists are raising are allayed; if not why not? 
Hon TONY RYALL 
: No. Already well over 60 percent of the pharmacy businesses in New Zealand either have returned their contracts or have indicated that they are going to sign them. We have been negotiating for quite some time and I have got to say that actually there is a lot of goodwill in pharmacy businesses to make this change. When you have been to university for so long and you have got such great clinical skills I actually think you should be paid for your clinical skills not for pouring pills into a bottle. 
Freshwater Management—Farming Practices and Protection of Water Quality 
11. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
 to the  
Minister for the Environment 
: Does she agree with Bay of Plenty Regional Council Pollution Prevention Manager Nick Zaman that “courts council and the wider community will not tolerate the pollution of our environment” and if so what action will she take to encourage farmers and farm owners to comply with their legal responsibilities to protect waterways? 
Hon AMY ADAMS (Minister for the Environment) 
: 
 I certainly agree that all New Zealand is rightly concerned to ensure that water quality is maintained and where possible enhanced. That is why this Government is taking clear action against water degradation from all sources not just farming including implementing the Fresh Start for Fresh Water programme; establishing the Land and Water Forum; assisting in the refreshing and expanding of the Dairying and Clean Streams Accord including nutrient budgeting and stream fencing; preparing and implementing the National Policy Statement on Freshwater Management; doubling penalties for Resource Management Act offences; and working with local authorities to ensure they are properly monitoring and enforcing standards. I note that Mr Zaman went on to say that actually most farms are doing a really good job. 
Te Ururoa Flavell 
: What mechanisms does Government have to ensure that proper checks and monitoring are in place to prevent the unlawful discharge of effluent and what responsibility can Government expect the industry to take for the way in which it responds to the effluent spill in Maketu by Armer Farms? 
Hon AMY ADAMS 
: Central government’s role in this is to set the framework including the legislation under which it operates and the penalties which as I noted we have doubled. It is the responsibility of local government to be concerned with the monitoring and enforcing of resource consent conditions. For our part what we do is we work very closely with local councils to ensure that they are adequately carrying out those monitoring and enforcement obligations and I would say that we expect industry regardless of its sector to be properly managing the environmental impacts of its activities. 
Te Ururoa Flavell 
: What influence will the Dairy Industry Restructuring Amendment Bill have in assisting farmers and farm owners to comply with the Dairying and Clean Streams Accord? 
Hon AMY ADAMS 
: Well I just suggest that the member is probably better to set down any questions he has around that bill to the Minister in charge of it the Minister for Primary Industries. 
Television Public Service Channels—Closure of TVNZ 7 
12. 
CLARE CURRAN (Labour—Dunedin South) 
 to the  
Minister of Broadcasting 
: In the light of the latest monthly audience figures by Nielson which show almost 1.6 million New Zealanders watched TVNZ7 in May an increase of nearly 120000 viewers in just one month is he now prepared to recommend that the Government review its decision not to provide further funding so that TVNZ7 the only nationwide public broadcast television station can continue operation beyond 30 June? 
Hon CRAIG FOSS (Minister of Broadcasting) 
: 
 No. Last year the Government reaffirmed the decision of the previous Labour Government that TVNZ 7 funding was to end on 30 June 2012. I am disappointed but not surprised that the member and the Labour Party do not recognise that Maori Television— 
Mr SPEAKER 
: Order! The Minister is not responsible for what the Labour Party might think. 
Clare Curran 
: Why does he persist in stating that the Government has not made a conscious decision to close down TVNZ 7 when his predecessor Jonathan Coleman received a paper dated 23 February 2011 that states: “It is proposed that Cabinet agree that no further funding be made available for the continuation of TVNZ 7 when the current appropriation ends in 2012.” clearly indicating that it was an option that was available to the Government? 
Hon CRAIG FOSS 
: As I said in the primary question the Government reaffirmed the decision of the end date of funding for TVNZ 7 last year—TVNZ 7 which sits beside Maori Television as a nationwide public broadcast television station. 
Clare Curran 
: Was any Television New Zealand (TVNZ) business plan on the table for continuing the operation of TVNZ 7 at the time the Government confirmed that no special purpose funding would be available to sustain the channel—the decision that was made on 6 April 2011? Did that plan go to Cabinet and why was it turned down? 
Hon CRAIG FOSS 
: I note that I was not in Cabinet at that time. I understand there were proposals from various entities including TVNZ and such things as levies to fund TVNZ 7. 
Clare Curran 
: I raise a point of order Mr Speaker. This is the Minister of Broadcasting who is responsible for broadcasting. He would know what reports went to Cabinet. 
Mr SPEAKER 
: Order! Ministers remain responsible; it is why reports are allowed that enable Ministers to comment on what has happened historically. So just because a Minister may not have been present at the time does not relieve a Minister of being answerable for what took place. That supplementary question asked whether a business plan was on the table and whether it went to Cabinet. The Minister may not have the information to answer the question but he should at least attempt to answer the question. 
Hon CRAIG FOSS 
: As I said I was not in Cabinet at that time but I do understand that various proposals were put by various entities including TVNZ for various options for TVNZ 7. 
Clare Curran 
: I raise a point of order Mr Speaker. My question was very specific. It asked: “Was there a proposal on the table did it go to Cabinet and was it turned down?”. 
Mr SPEAKER 
: Order! [ 
Interruption 
] Order! A point of order has been raised. The answer did say that yes there were proposals on the table and that the Minister’s understanding was that they did go to Cabinet—a range of proposals did. So it would appear that he has answered that question. The member can dig further into that answer obviously. 
Clare Curran 
: Following the axing of public broadcasting television channel TVNZ 7 on 30 June will he commit to reserving spectrum for a public service or non-profit public interest television channel for the future; if not why not? 
Hon CRAIG FOSS 
: Maori Television is doing very well across that spectrum. Those are decisions for TVNZ itself which has made announcements about that. Again the closing of TVNZ 7 was as scheduled by the previous administration. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I know that we are not meant to argue the accuracy of answers but the Minister may not have heard the question. The question was about the allocation of spectrum. That is not TVNZ’s responsibility— 
Mr SPEAKER 
: Order! The member must resume his seat. The member knows that the Minister’s answer—I mean the Minister has answered the question. The Speaker cannot in any way be accountable for the accuracy or otherwise of the answer. The Minister must stand by his answer and it cannot be litigated by way of point of order. It certainly can be tested by way of a further supplementary question. 
Clare Curran 
: I raise a point of order Mr Speaker. My question was nothing to do with Maori Television. It was to do with public television spectrum. 
Hon Trevor Mallard 
: I think you invited us to continue by way of supplementary question. There is a slight problem and that is that we have not got any. Every now and again— 
Hon Steven Joyce 
: See you tomorrow. 
Hon Trevor Mallard 
: Well we cannot ask a supplementary question tomorrow without asking another primary question. Silly old Steven Joyce interjected— 
Mr SPEAKER 
: Order! The member will resume his seat immediately. He was doing reasonably well until that point. [ 
Interruption 
] Order! The House will come back to order. I apologise. It is my fault. I thought that the Labour Party had one more question and it appears that I may not be right on that. Under the circumstances rather than have an argument—[ 
Interruption 
] Order! Rather than have an argument over whether or not the Minister has answered the question adequately I would rather have the member ask a further question. I believe that that way we can deal with this problem rather than have an ongoing argument through points of order as to whether the Minister answered the question. I invite the member to ask a further supplementary question. 
Hon Gerry Brownlee 
: I raise a point of order Mr Speaker. So that we do not have an argument over the question it is worth pointing out that the Minister responsible for spectrum is the Minister for Communications and Information Technology not the Minister of Broadcasting. 
Mr SPEAKER 
: I appreciate the member’s point of order but the Speaker has total control over the allocation of questions. He has allocated a further supplementary question. 
Clare Curran 
: In the light of the Government’s  
Regional and community broadcasting framework 
 of 22 July 2011 which states its objective as that “spectrum is allocated and reserved for future developments in population demographics audience demand and technology particularly digital developments;” and following the axing of TVNZ 7 on 30 June will he commit to reserving spectrum for a public service or non-profit public interest television channel for the future; if not why not? 
Hon CRAIG FOSS 
: No. 
Clare Curran 
: I seek leave to table the following documents: the latest 4-week cumulative audience figures by Nielsen Media Research. 
Mr SPEAKER 
: These are available to all members are they not—these audience figures? They are available in the media readily. I do not think— 
Clare Curran 
: They have not been released. 
Mr SPEAKER 
: We are not going to seek leave to table stuff that is available in the media already. [ 
Interruption 
] If there is any doubt leave is sought to table those documents. Is there any objection? There is objection. I believe the Speaker was not wrong. 
Clare Curran 
: I seek leave to table the Ministry for Culture and Heritage report dated 23 February 2011 providing broadcasting Minister Coleman with a revised Cabinet paper on options for the future of TVNZ 7. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Clare Curran 
: I seek leave to table the Government’s  
Regional and community broadcasting framework 
 dated 22 July 2011 which states as an objective that “spectrum is allocated and reserved for future developments”— 
Mr SPEAKER 
: Order! Leave is sought to table that document. We have heard all of that previously. Leave is sought to table that document. Is there any objection? There is objection. 
State-Owned Enterprises Amendment Bill 
Public Finance (Mixed Ownership Model) Amendment Bill 
Third Readings 
Hon TONY RYALL (Minister for State Owned Enterprises) 
: 
 I move  
That the State-Owned Enterprises Amendment Bill and the Public Finance (Mixed Ownership Model) Amendment Bill be now read a third time 
. These bills are part of the Government’s wider plan to control debt and to keep investing in our economy. [ 
Interruption 
] They are part of a wider plan to control debt and keep investing in the New Zealand economy. 
There are some people who think that the global financial crisis is over. They do not understand the relentlessly worsening international financial situation. There are more and more countries confronting the problems of debt. Greece Spain Portugal the United Kingdom Italy—countries that are fast running out of choices because they refused to control debt and get their public finances in order. Their situations are precarious. The ability of these countries to continue investing in growing and protecting their economies is significantly at risk. But New Zealand wants to take action to ensure that we can continue to invest in our country’s growth and prosperity and at the same time control our debt. 
This Government has carefully planned its spending and borrowing through the financial crisis and the Christchurch earthquake. Through good financial management over the next few years our country will return to surplus and we will keep our debt under control. When we inherited this economy after the 9 years of absent management by the party opposite our country owed $8 billion. Through protecting our country from the sharp edges of the recession we now owe $52 billion and in 3 years’ time we expect to owe $72 billion. New Zealand must control its debt. The mixed-ownership model is about freeing up some of our capital tied up in a minority of these companies and using that money to control debt by allowing us to continue to invest in schools roads and hospitals—important infrastructure in New Zealand. That is what this legislation allows us to do—to control our debt and continue to invest in important things like our schools our hospitals and our roads. This legislation enables the sale of a minority of these companies to the value of between $5 billion and $7 billion which will give us cash up front in an uncertain world when we would have otherwise had to borrow from foreign lenders. 
Over the time of this debate—this debate that has not happened through urgency; this debate that has involved the public—this Government has made it absolutely clear that we are not going to be diverted by the scaremongering and nonsense of the three-headed party opposite. Fact: this Government will maintain majority New Zealand control of these companies through its legislated 51 percent shareholding with a 10 percent cap on any other shareholder. Contrast that with the experience when that party was in power in the 1980s and sold $10 billion of assets to the highest bidder 100 percent without getting a mandate from an election—without getting a mandate from an election. This Government expects that 85 percent to 90 percent of these companies at float will be owned by New Zealanders. The Government will make sure that it gives effect to this policy through its ability to control the allocation and will ensure that everyday New Zealanders who want an opportunity to participate in these businesses will have that opportunity. It will ensure that superannuation funds KiwiSaver and other New Zealand institutions where New Zealanders save for their retirements also have an opportunity to get shares. This policy helps control debt. Our critics have exaggerated the numbers. They have been very selective but it is very clear in the Budget documents—simple and clear—that the estimated impact of the mixed-ownership programme is a $6 billion reduction in our net debt. 
 In their desperate attempts to discredit that for which this Government has a mandate we have had this latest claim that this policy will drive up electricity prices. Remember question time last Thursday when the Opposition said that all the information shows that the State-owned electricity companies are cheaper than private companies? Well what we know is that a more comprehensive analysis shows that there is no difference and that what really matters is the level of competition not the ownership. Our Government in our first term set about fixing the competition issues and making sure that the regulations were right such that in a 6 or 7-month period 425000 New Zealanders have changed power companies. In 14 of the 21 power regions the private companies are the cheapest. That is what happens with competition. New Zealanders get more choice and they are getting more competition and that is what we want to see. 
The other nonsense we have heard from the party opposite is that this is a rushed process. Are we doing this through urgency? When that party opposite was in Government and sold assets it put everything through under urgency. Did we invite the public to make submissions? Did the Prime Minister announce this policy in January 2011? Did we have an election on this issue? Was it the centrepiece of Labour’s election campaign and did Labour get the lowest vote it has ever got? This was what the entire election campaign was about. From Labour’s perspective every dollar that it cobbled together went on campaigning on this issue—and the Greens’ dollars—and Labour got the lowest vote it has ever had and National got the highest vote that any single party has ever got under an MMP election. 
 We do have a mandate. We do have the support of New Zealanders for our wider economic package to control debt and get this economy on the tracks that we need to have future prosperity. And that is what this is about. Unless we control our debt and free up money that we can continue investing in our schools and our hospitals and our roads then New Zealand is at risk. We are at risk of being seen by the international lenders as on a par with other countries that are losing control of their destiny. So this Government has a mandate from the people of New Zealand—no doubt about that. 
This Government has a focus on protecting majority New Zealand control through a 51 percent legislative guarantee in the law passed in this legislation with a 10 percent cap on any one shareholder. That money the future stream of dividends that we are making available to the minority shareholders will be captured up front in the price that we get for the shares. And that money will be put into the Future Investment Fund and that money will be available for investing in schools roads and hospitals. So this is what works for New Zealand. We control debt and at the same time we protect grow and invest in our economy and that is what New Zealanders would want us to do. 
Over the next few weeks we are going to continue to hear a whole lot of nonsense from our opponents. These are our opponents who when they sold public assets did it without a legislative mandate did it to the highest bidder and never gave everyday New Zealanders a look-in—never gave everyday New Zealanders a look-in. That is not what this Government will do. This is about giving everyday New Zealanders a chance to own shares in these businesses whether directly or through their superannuation funds or their KiwiSaver or their other Crown financial institutions. This Government wants to be absolutely clear with New Zealanders. This is part of a wider plan to make sure that we protect and grow our economy in these difficult times. When you do not have a Government with that sort of commitment you end up seeing what New Zealanders are seeing on their television news 6 o’clock bulletin after 6 o’clock bulletin. Countries that do not control their debt and do not invest in the future begin to lose control of their destiny. This Government will not put our country in that position. 
DAVID SHEARER (Leader of the Opposition) 
: 
 I knew that if we waited around here long enough we would hear “If we don’t do this we’ll end up like Greece or Spain or Italy.” It is the classic is it not? You have got to look offshore and say: “If we don’t sell off our assets we’re going to be like Greece.” What a lot of nonsense. What an absolute travesty of the truth. It is absolute nonsense. 
We may be finishing this legislation the State-Owned Enterprises Amendment Bill and the Public Finance (Mixed Ownership Model) Amendment Bill in this House today but I can tell you what the fight is not finished. It will be out of here and on to the streets. That is where it is going. That is where we will continue to fight this battle to keep our assets because we are taking the petition to have a referendum on these asset sales to the people of New Zealand. I can tell you that when you go out there and ask people to sign the petition they clamour to sign it. They stand in line to sign the petition and they are not just as Mr Key would say people who vote Green or Labour or whoever. These are National Party supporters who are standing in line and they say that. They come up to you and they say: “Look I voted National but I’m willing to sign this petition because I totally disagree with this Government selling off our assets.” 
So today in the third reading this legislation is likely to go through. But it is likely to go through with a wafer-thin majority brought about by Peter Dunne of United Future who has not really taken a very active part I have to say in this debate. 
Hon Clayton Cosgrove 
: He hasn’t spoken any time. 
DAVID SHEARER 
: I think he has maybe spoken once but he has certainly not taken an active part in this debate and why would he? Because we know that in his electorate where we have been collecting the most signatures of any of the electorates around the country they are dead against him selling off and putting his name alongside the National Government in selling off our assets. So it is a wafer-thin majority that is coming before this House and our assets are being sold off in a piece of legislation that can be seen and understood only as being particularly obnoxious. 
Let us ask a few questions about this legislation. Would we be better off? Actually no. It is a little bit like selling a profitable business to put an extension on to your house. What you end up losing is the revenue that is coming in to the Government—the revenue. 
Hon Ruth Dyson 
: Year after year. 
DAVID SHEARER 
: Year after year after year the people of New Zealand will lose this revenue. Will this mean we have more risk? Absolutely because even today we have Tuwharetoa and we have the Maori Council which is putting in court cases and claims against this legislation and who bears the cost of that? 
Hon Annette King 
: The taxpayer. 
DAVID SHEARER 
: The taxpayer will bear the cost. The taxpayer will own only according to Mr Ryall 51 percent but they will take the entire risk of any litigation against this legislation. So the taxpayer will take all the risk. The taxpayer will lose out on the revenue. 
But what about the cost? What about the cost to put this through? Well Goldman Sachs Group Macquarie—those banks are going to receive around about $120 million in revenue to put this deal through. I can think of a lot more things that I would rather like to do with $120 million and that might include decreasing class sizes. It might even go to getting behind and reversing the $45 million that this Government took out of improving teacher in-service training. That was supposed to increase the teacher quality that now this Government decides it wants to fix. And what about power prices? Well Mr Ryall is leaving the Chamber before he hears this— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! Order! The member must not refer to that. 
DAVID SHEARER 
: What about power prices? Well as an indicator of what is going to happen to power prices let us look at what is happening already to the directors of these companies. They have just doubled their compensation to $2500 a day. That is good work when you can get it is it not—$2500 a day that you will receive if you are a director of these companies. Already they are not even sold off and they have bumped up their compensation for being a director. And where is that money going to come from? Well the only place it is going to come from is out of the pockets of New Zealanders because they are the people who are paying the power prices. So are power prices going to go up? Of course they are going to go up. Of course they are going to go up. There is nothing surer than power prices going up. 
And are these shares going to end up in corporate ownership? Well of course they are going to end up in corporate overseas ownership. Of course they are because if they do not they will not get the price that the Government needs. That is what Treasury told the Government: “You’ve got to sell overseas otherwise you won’t get the price.” So did the Government put mums and dads—that cutesy little phrase “mums and dads”—in the legislation to make sure that these mums and dads these New Zealand investors will get to the front of the queue? Well no of course the Government did not do that. Of course it did not do that. If the Government was going to guarantee it it would have put it in the legislation and it did not do that. 
So here we are standing in front of legislation that is obnoxious to New Zealanders. More than two-thirds of New Zealanders do not like this legislation and do not support this legislation. More than 100000 people out there already—in a few weeks—have signed on to the citizens initiated referendum petition and are queuing up to sign. This Government is still persisting in putting through this piece of obnoxious legislation. 
Grant Robertson 
: Out of touch. Out of touch. 
DAVID SHEARER 
: As Grant Robertson just said this Government is so out of touch with the way ordinary New Zealanders feel and the way New Zealanders feel about selling off their assets. Mr Ryall has the audacity to say that compared with when Labour sold off assets in the 1980s—two and a half generations ago almost—somehow this is less bad. That was awful but this is somehow “less bad”. It is still bad but it is just slightly less bad than what it was in the 1980s. Well it is still bad. It is still bad policy. To liken New Zealand’s situation to that of Spain and Greece frankly is an insult to New Zealand and an insult to the people who work so hard. 
The Labour Party will be working hard out in the streets to get those 300000 signatures and as I said people are queuing up to sign that petition. We will bring that back to this House. We will bring that back to this House and we will have a referendum on whether New Zealanders want this or not. I can tell you now the way that the referendum is going to go. It is not going to go well for the Government. In 2013 or maybe even 2014 there is going to be a referendum on asset sales that will flow through to the election in 2014. 
Chris Hipkins 
: And the one after that. 
DAVID SHEARER 
: And the one after that because New Zealanders do not want these assets to be sold. If that is not a Government out of touch and if that is not a Government that is arrogantly dismissing the wishes and the desires of New Zealanders I do not know what is. I do not know what is but I can tell you and give you the commitment right now that the Labour Party will be out there fighting every inch of the way to make sure that these assets are not sold. We will be out there come rain or sunshine to get those signatures to make sure that the referendum goes ahead and that New Zealanders get a real chance to have a say in the future of their country. Thank you. 
TODD McCLAY (National—Rotorua) 
: 
 It gives me pleasure to rise to speak in this debate. The last speech from the Leader of the Opposition reminded me of a speech I heard on 25 November last year. It was a Friday in Rotorua and the sun was shining. At a dam not so far away in the Taupo electorate the then leader of the Labour Party Phil Goff was standing with three or four of his supporters and I heard a similar speech on the news that night. It was all about what was wrong with New Zealanders how the Government was not listening to them and what a great error they would make the next day if they voted for John Key and his Government. 
I say to the current leader of the Labour Party: the solution is simple and it is within his grasp. It is possible for him and his colleagues during this debate to stand up and say to New Zealanders: “We will buy these assets back.” Stand up and say to New Zealanders: “We believe this is so wrong that today we make a commitment to buy those assets back.” Can I say that at least one party in this House has stood up and laid its cards on the table in this respect and told New Zealanders what it will do. I look forward to hearing that from the other speakers in the debate. Stand up and say to New Zealanders: “This piece of legislation is so wrong that today the Labour Party makes a commitment to buy it back.” And you know what? I do not think we are going to hear that at all. 
In January of last year 2011 Prime Minister John Key stood up and said to New Zealanders that there was a plan to sell parts of assets that were currently owned by the Government. He told New Zealanders about the mixed-ownership model. In January of last year that was—19 months ago. Then all parties in this House campaigned on this issue and 10 months later there was an election where New Zealanders knew if they re-elected this Government what would happen. They certainly knew from the Opposition what its position was on this issue. On that day on 26 November 1 million New Zealanders voted for a National Government—the largest vote that any party has had under MMP. Significantly fewer voted for the Labour Party. In fact I did a quick bit of research. It was one of the lowest votes that Labour has ever had under MMP. [ 
Interruption 
] In fact my colleague tells me that it was the lowest vote. So on the one hand we have a party that campaigned on an issue that was announced 11 months earlier and we got the largest vote possible. We had another party that had a one-issue campaign—a one-issue campaign; it is the only thing we can remember them talking about—and it got the lowest vote possible under that scenario. 
Today this debate is about three things and three things only. It is about controlling debt and not borrowing more money it is about strengthening capital markets and it is about funding for new high-priority infrastructure programmes. That is all that this is about. We will hear lots of things from the Opposition but that is all it is about. Do you know the difference between what is proposed today is simple. Over 11 months last year this was campaigned on. Our Prime Minister John Key fronted up to New Zealanders and said that we will not do what other parties did previously and that we will retain 51 percent control for the Government on behalf of New Zealanders. He said that 49 percent would be offered up for sale to New Zealanders for KiwiSaver for the Superannuation Fund and to iwi and there will be a 10 percent maximum put on that so that no party other than the Government can own too much of these companies. 
It is estimated that $5 billion to $7 billion will be raised to invest in important projects in New Zealand. It is not to go and borrow more money; it is to invest in important projects for New Zealand for New Zealanders to benefit from. You will hear in the debate from the Opposition that this is not a problem that it is not about debt and that this is all about other things. Well our debt in New Zealand is forecast to peak at 30 percent of GDP about $72 billion and we are forecast to get back to surplus in a couple of years’ time. 
When we came into Government 4 years ago we inherited an atrocious amount of debt where it was forecast to spiral out of control. I am very proud as part of this Government that we have been able to turn that round in a small period of time. New Zealand will have one of the lowest levels of debt of any developed country in the world because of sound financial management and because of important sound financial decisions. When it comes to assets we have heard previously in the House that currently the Crown on behalf of New Zealand owns about $245 billion of assets. We have a very strong plan to grow that over the next 4 years to $267 billion. This is not actually about just what we own because our commitment on this side of the House to assets is clear. 
So what is going to happen to these funds? We are not going to go and borrow; I have said we are going to invest in important projects for New Zealanders. The Future Investment Fund will be established which is another thing that our Prime Minister told New Zealanders about before the last election. He came forward he made speeches he spoke on doorsteps he visited all parts of New Zealand and he talked about our plan. So $1 billion from this will go into modernising and transforming New Zealand schools and what a great thing that will be. As I visit schools around New Zealand boy do they need that support and one of the best things we can do is to support young New Zealanders by doing more for them in education. 
Already $88 million is set aside for further hospital redevelopment and I think we have only just started to hear the start of what the fund can be used for. For example $250 million will go into KiwiRail. Some would say “What a waste of money.” but actually the previous Government paid more to get it back than it was worth. There are some Australians who think that is a great idea but we have made a commitment to turn it round and make it work for New Zealanders because you cannot keep borrowing money to prop these things up. You cannot keep taking taxpayers’ money and putting it aside as the last Government did to prop things up. They have got to work well and this Government will invest further in that. 
There will be $400 million for irrigation. What is going to get parts of our economy our rural sector going than good solid positive irrigation that balances the environment with the needs of the farming community so that we can produce more and export more—not borrow more as the Opposition would have us do but actually to export more. And then there is money going into industrial research high tech and so on and so forth. Those are some of the things we have announced in the Budget some of the things that are still to come. 
But can I say to you very clearly: New Zealanders have had an opportunity to come to this House via the Finance and Expenditure Committee and talk about this issue. The committee has given them all of the time that we could. [ 
Interruption 
] 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! 
TODD McCLAY 
: I understand that members opposite do not want to make decisions; I accept that. I understand that members opposite at the last election said they were against this piece of legislation; I understand that. And I understand—[ 
Interruption 
] 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! What I want is what everyone wants in this world and that is order. 
TODD McCLAY 
: Thank you Mr Assistant Speaker. I will do my best to stay in order. I understand that members opposite do not want this legislation— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. The member was able to speak. He was continuing. I want to question whether you should be protecting him given the fact that that member was the one who stopped New Zealanders speaking when they wanted to— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! The member may well have a point but he also knows that that is a debating issue as well. 
TODD McCLAY 
: I can at least be grateful that Mr Mallard directs these attacks at me in the House not outside in the back. That has happened before. Can I say very clearly that members opposite do not like this; I understand that. They were making those speeches the whole of last year. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. You just asked the House to come back to the debate. That chicken member who would not hear the debate in the committee has gone right away from it. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The House is getting a little bit out of order and we are starting to slide down. I just ask members to reflect on this. This is a robust Parliament as it should be but we should also be mindful of the contribution of others. Courtesy is contagious. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. Although I accept your ruling that courtesy indeed is contagious one other issue that draws the House into disorder is when people tell untruths and that becomes contagious. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! The member knows—he is a longstanding member. He is a longstanding member and he knows. The member will stand and withdraw. 
Hon Clayton Cosgrove 
: I withdraw. 
Michael Woodhouse 
: I raise a point of order Mr Speaker. The term “Tell the truth!” is a phrase that creates disorder. That was a ruling from Speaker Wilson in the last Parliament and it is in Speaker’s ruling 42/3. I would ask the member to withdraw. 
Hon Clayton Cosgrove 
: You will recall in the Parliament before last the obscenities including terms far more incendiary than that—including words like “corruption” and other things—that were hurled at members of Parliament by that side of the House. If we are going to rule out the phrase “Tell the truth!” then I suspect we will not have a debate at all in many cases in this Parliament. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Thank you. Can I just ask members to reflect on the debate as it stands and debate the issues. But I have looked at Speaker’s ruling 42/3 and it is indeed by Margaret Wilson. She said: “it is a phrase that creates disorder in this House so from now on it will be considered an unparliamentary term.” So I ask the member to withdraw. Withdraw. 
Hon Trevor Mallard 
: I withdraw. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Thank you. 
Hon Amy Adams 
: Oh—how gracious! 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! 
TODD McCLAY 
: Thank you Mr Assistant Speaker. The truth of the matter is that for 11 months of last year the Labour Party told New Zealanders not to vote for John Key and the National Government as they would sell assets. The truth of the matter is for 11 months of last year John Key told New Zealanders what he would do if we were re-elected to Government. He told New Zealanders about our plans. The truth of the matter is New Zealanders had an opportunity to vote. They did so. I commend this legislation to the House. 
Hon CLAYTON COSGROVE (Labour) 
: 
 The truth of the matter is that the member Todd McClay chaired a select committee the Finance and Expenditure Committee that abused and truncated the contribution of submitters. And that member as instructed by the Minister for State Owned Enterprises by his own admission—in fact he admitted it in the meeting—instructed Treasury to produce a report on submissions. Do not shake your head. He should not shake his head. If he reads the minutes he will be shaking all right but it will not be his head that is shaking. He instructed Treasury to prepare a report on submitters before they had finished submitting. Then in this House he and his ilk tried to stop the official minutes of the Finance and Expenditure Committee being let out and put on the website so that journalists and others could see their record of blocking the contribution of submitters. That is the truth of the matter. That chairman has made history in this place. He was led like a lamb to the slaughter led by the nose by his Minister to do exactly what he was told. And they were so afraid of the truth getting out that even when we asked Treasury officials questions that chairman instructed the committee to block our request to have those answers tabled at the committee before we lodged our minority reports because they did not want the answers. 
There is a saying—Edmund Burke I think said it—that those who do not learn by their history are in danger of repeating it. I place on record the comments of Trevor Mallard and others that yes in our time in Government in the 1980s we sold assets but we learnt. 
Hon Trevor Mallard 
: When the member was at primary school. 
Hon CLAYTON COSGROVE 
: When I was 14 and apparently according to the Minister for State Owned Enterprises totally responsible for all the ills of the 1980s Labour Government. We sold them but we learnt. This mob under the Bolger Government sold the assets and they are doing so again as quick as they can after they were returned to office under the Key Government. They learnt nothing. 
There is a person in this House—because this is a day of shame for this House and a day of infamy for New Zealanders as this bill goes through if it goes through by a wafer-thin majority—who has never contributed anything to this debate. He has contributed not one speech not one whimper—well maybe a wimp—and not one contribution. That person is Peter Dunne. He is the man of course who would not even see his own constituents and talk through the issues the man who has made no contribution and has hidden at every stage of this debate and the man who will have the unique place in history as the man who gave the Government the vote it required to sell every New Zealander out—the generations of New Zealanders who built these assets; the generation of New Zealanders their grandkids and their kids who have benefited from the revenue of these assets; and the future generations who will not benefit from the revenue of these assets. 
The truth is that this Government has failed to convince New Zealanders of the worth of its proposition. We know that consistently polls have said that 80-plus percent of New Zealanders are against the sale of assets which they already own. The Government uses as its justification the fact that it won an election but what it forgets to tell New Zealanders is that it booked the proceeds from the sale of these assets in the Pre-election Economic and Fiscal Update but did not book the loss in dividends. What the Government fails to tell New Zealanders is that yes you save $266 million in debt-servicing costs but you give up $360 million per annum in dividends. That is a loss to the New Zealand taxpayer of 100 million bucks. What these people think is that Kiwis are silly and that after this bill—if it goes through—is passed and after the Governor-General gives it Royal assent like many issues in this Parliament once the legislation is through Kiwis move on. 
The problem this Government has of course is that all this legislation does is put the bullets in the gun. It enables this Government to sell assets and then every year at least for the next 4 to 5 years this Government’s programme by its own admission is to assent to sell a major asset. The Government says the first one will be Mighty River Power. The day the power bills go out with the large increases etched on the memory of every Kiwi will be the words “With the compliments of John Key”. Those power prices will be visited and those increases on Kiwis—ordinary Kiwi mums and dads—who have no guarantee in this legislation that they will be first in the queue to get anything because most of them do not have the thousand bucks they are going to need to look after their families let alone buy a parcel of shares. They will know that those power prices are the direct responsibility of the John Key Government. And next year we will have another one and the next year—which hey presto happens to be election year—there will be a third. That will be a weeping sore for this Government a reminder—and Kiwis will not forget—that every year another bit of the family silver goes. They will remember and my prediction is that they will visit retribution on these members. Peter Dunne will be and is a political cadaver over this issue as we speak—the walking the crawling dead. The body bags will be out for that member as the man who gave this Government the power the vote it needs to sell out ordinary New Zealanders. 
The Government says that it expects 85 to 90 percent of these shares to be held in Kiwi hands. Well let us look at the factual history of that. We have Contact Energy which in 1999 on float had 225000 individual shareholders. That has now decreased by 65 percent to 78225. That was without a loyalty bonus. And let us get to the loyalty bonus because the loyalty bonus simply means this—here is the prediction—it simply puts off the fateful day when ordinary Kiwis will do what is best for them. I respect their right to do what is best for them to survive in the economic archaeology that these people are leaving us. Kiwis will sell those shares because they will have a windfall gain and if they do I respect their right to do so. But here is the deal: firstly that costs this crew money and secondly what I predict will happen is that the offer will expire or take effect from just after the next election so that Mr Key can prance around like a sort of cock sparrow and say that 95 percent of New Zealanders or whatever it is are still in the scheme. Of course they will be because they will wait for that loyalty bonus they will take that windfall gain and then they will do what is right for them in terms of their economic survival. Shares will be onsold and there is no control in this legislation as to who—foreign or domestic—will be the recipients of those sold shares just like there is nothing in this legislation as we were told at the select committee to stop the proverbial bus being driven through the 10 percent cap and nothing at all to guarantee that Kiwis will be first in the queue. 
So I say to the Government that it has ridden roughshod over public opinion and in its arrogant way believes that it is right. And in our society— 
John Hayes 
: Not true. 
Hon CLAYTON COSGROVE 
: It is not true? So it is wrong? 
John Hayes 
: Not true. 
Hon CLAYTON COSGROVE 
: Well make up your mind. In our democratic society we have a thing called an election and a Parliament and those who have the numbers can push things through. That is the nature of our sweet little democracy. But the people also have a say and the people also have a memory. The people have said that they do not want this to continue and the people are now out on the streets—not just as John Key said arrogantly the Labour Party and its members the Green Party and New Zealand First. Oh no. You have got Grey Power—which the last time I checked I thought would have a few members who are a bit blue—the New Zealand Council of Trade Unions and a whole series of community organisations that are galvanised to stop this happening. 
The next test for the Government will be when this referendum gets up and is triggered. The Government will stand and be humiliated as 80 percent from a few opinion polls—in fact a lot of opinion polls—becomes formalised to I would predict 80-plus percent of the voting public in a referendum who say this Government is wrong. Then we will have the ultimate sanction in 2½ years’ time as members of the public go into the polling booth and give their verdict in respect of this Government’s conduct. They will remember the rush. They will remember the arrogant statements. They will remember and they will stand firm on their principles which is to say that they own these assets they have always owned these assets they want to continue owning these assets and they do not want these assets flogged off by any Government of any shade. 
I invite Mr Dunne—wherever he may be in this Chamber; I am sure he is somewhere cowering under a desk—to think very very carefully on that as he casts his vote. The year 2014 colleagues ain’t that far away. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I rise to speak on behalf of the Green Party on the third reading of the Government’s privatisation legislation the State-Owned Enterprises Amendment Bill and the Public Finance (Mixed Ownership Model) Amendment Bill. History is the victory of remembering over forgetting and I guess most New Zealanders—if the polls are right—understand their history. It would seem that most of the Government members do not and they have lost or forgotten the lessons of history as they go down the privatisation path once again. 
What has I think been really inspiring about this debate is that most New Zealanders actually do have a vision a long-term vision for their country. The Government is promoting a very short-term vision: “We will just sell it off and pay the bills today but we will have nothing left to pay the bills tomorrow.” But most New Zealanders do not subscribe to the short-term vision of this Government when it comes to asset sales. What we have seen over and over again is that in spite of the Government’s public relations campaign most New Zealanders overwhelmingly do not want their power companies privatised. Most New Zealanders understand that this is part of the long-term vision for their country. 
When people sign the referendum petition they are not just signing a piece of paper that says: “I demand my say on privatisation of the assets.” What they are saying is: “I believe in my country.” What every one of those people who sign the petition—the 100000 people who have already signed the petition—is saying is: “I believe in the future of Aotearoa New Zealand.” Every one of those people is saying that. The 350000 people who will be signing the petition to force the referendum on asset sales those people are the future of our country. They are the people who believe that Aotearoa New Zealand has a future that they are a part of it that they want to invest in our future and that they are willing to hang on to the assets and make an investment in the future of their country. 
National has decided that the way it will solve its short-term economic and fiscal problems is to flick off the assets that it inherited when it got into Government. In order to pay the bills that the Government has and in order to fill the fiscal hole that it has because of the tax cuts to upper-income earners—the fiscal hole that this Government created because of the tax cuts that it gave away to upper-income earners—it is flicking off the assets. It is selling the assets that were built up over generations. 
The people who have been signing the petition—the people who believe in the long-term future of our country—are saying: “I believe in the long-term vision of my country. I am willing to make a stand.” It is not just about saying “I demand that I should have a say.” although it is about that. People are saying: “I should have a say about the future of my country and these assets that the Government is selling on for short-term gain.” People are saying: “I believe in the future of my country and I am willing to stand up for that future.” 
The Green Party put up an alternative future for these energy companies in the election campaign. In that election campaign the majority of voters cast their vote in favour of parties that wanted to retain the assets. A minority of voters voted for parties that supported asset sales. There is a very narrow majority in this House—61 votes to 60—in favour of asset sales because some of the parties that supported retention of the assets did not make the 5 percent threshold. In that election campaign the Green Party said: “We should retain these assets. They are our future.” 
This is the next Fonterra for our country. The renewable energy sector is growing dramatically internationally and these companies have the expertise and critical mass to actually project New Zealand into that global renewable energy market and renewable energy future. That was the alternative vision and that remains the alternative vision. These companies should partner with private sector entrepreneurs. We have always supported that because we believe that the private sector has a huge contribution to make. But by retaining the companies in State ownership we ensure that the headquarters stay in New Zealand and we ensure that the research and development stays in New Zealand. 
We have seen what happens to every other infrastructure sector in New Zealand when they are flogged off. Whether it is telecommunications or banking the companies get bought up from overseas the headquarters are moved overseas—usually to Australia—the research and development is moved to overseas and New Zealand simply becomes a profit centre for a multinational corporation. These companies will no longer become an export platform to the world and part of New Zealand’s economic future. Instead they like the banking sector simply become a drain on the New Zealand economy. 
We stood up against that and most New Zealanders voted against that at the election. Every poll shows that the vast majority of New Zealanders believe in the long-term future of their country which is why they oppose privatisation. The majority of New Zealanders understand what this Government is doing. They understand that this is a short-term fix and that it will in the end simply leave us with more debt in the long term. It does not solve the underlying challenges which are quite real that face the New Zealand economy. That is what this legislation does. 
So every person who signs the referendum is writing their name down and saying: “I believe in the future of New Zealand.” That is what that referendum is all about. That is what the petition is all about. It is all about people who are willing to stand up against the short-term vision of this Government a Government that has embarked on a reckless fiscal and economic path and a Government that is selling assets in order to cover a short-term fiscal hole. New Zealanders are saying: “We don’t agree with that strategy. We have a vision for our country and that is why we are signing the petition. That is why we believe in our future.” 
The other part I think that is important about this debate is the understanding of the nature of the electricity sector in New Zealand. There is this naive belief within the Government that there is competition within the electricity market in New Zealand—that perfect competition will solve all of the problems in the electricity market in New Zealand. It is a naive belief. It is childish to think that that is the case. The electricity sector will always be characterised by problematic competition because there are so few players. The retailers and the generators are hooked together as one in so many of the major companies. There is actually very limited competition in the sector so it is very easy for these companies to extract super-profits out of the electricity market. So the naive belief that we hear from the Government that somehow perfect competition will lead to lower prices is simply not true and the evidence is to the contrary. 
 The private electricity companies charge on average 12 percent more for electricity than State-owned enterprises do currently when you look at the analysis of the data. This will only get worse because Contact Energy and TrustPower have made public statements that they resent the State-owned enterprises because the State-owned enterprises put an anchor on the price of electricity in New Zealand. And once that anchor is lifted then they are free to jack up prices and extract even more revenue from the sector. 
We have a long-term challenge around climate change and we have a long-term solution in front of us in the form of these energy companies. This is one of New Zealand’s great opportunities to take advantage of the growth in the global green economy and this Government does not seem able to see the reality that is facing it right in the face. It cannot seem to listen to all the leading business people from Pure Advantage and numerous other groups who have spoken to it about the green economic opportunities that are available of which these companies are some of the prime examples yet over and over this Government does not understand. It is trying to build an economy in the 19th century when we are in the 21st century. All it does is invest in carbon-intensive and fossil fuel - intensive companies. 
The transfer of wealth involved in this privatisation from the 99 percent to the 1 percent is a disgraceful transfer of wealth that the National Party Peter Dunne and John Banks are forcing through this Parliament. The fight is not finished. Every person who signs the petition is saying “I believe in the long-term future of New Zealand.” and the Greens are with them. 
PAUL GOLDSMITH (National) 
: 
 It is my pleasure to speak on the State-Owned Enterprises Amendment Bill and the Public Finance (Mixed Ownership Model) Amendment Bill. Given the heat from the other side it is hard to think that this is the Labour Party that was quite happy to have the mixed-ownership model for Air New Zealand for all that time. It is hard to think this is the same Labour Party that Mr Cunliffe was a member of when he said only in 2010 to the Institute of Policy Studies: “in a capital constrained environment [Labour] will better leverage the Crown’s balance sheet in new and innovative ways.” He also said that we need to unleash State-owned enterprises to create and grow them with private partners and private shareholders. 
That was Mr Cunliffe only 2 years ago. But now Labour members are manufacturing a great deal of heat over their opposition and it makes me wonder why they are doing it. Maybe they feel that the Greens are breathing down their necks and they are panicking and now they are trying to get very excited about this. I suppose the question is whether they will buy it back when they get the opportunity. I am not sure that they will. 
So why are we doing this? We are doing this to reduce our need for borrowing in a dangerous global financial environment. We need to build a more competitive and productive economy based on savings and investment and away from debt borrowed from foreign lenders. It is about controlling our destiny by keeping the total amount of Government debt under control. We watch the travails in some European countries and too often we assume it could never happen to us. Well why not? New Zealand is heavily exposed in private debt and that is why it is critical that our Government debt remains as low as possible. So our mixed-ownership model policy is part of a wider economic programme to reduce debt increase savings and get our country through one of the worst economic crises in 100 years. 
There is so much that we want to invest in in this country and this ownership structure will free up $5 billion to $7 billion to invest in the Future Investment Fund in new high-priority infrastructure projects. That is why it makes good sense. Another benefit from this legislation as we have heard is that it will help deepen New Zealand’s capital market extending ours into an ownership society. It is a policy that will boost the New Zealand stock market and broaden the pool of investment for New Zealanders. That is important because that is how our companies will get the opportunity for more capital to grow further and to add more jobs if we have a more effective capital market. 
Thirdly the most important aspect of this legislation for me is that by introducing a share of private sector investment this legislation will strengthen the companies involved by bringing to those companies private sector scrutiny and governance. The tenor of the debate from members on the other side of the House has been anti-business and anti - private enterprise. Profit is a dirty word and private enterprise is all about putting prices up and ripping people off they say. “They do not care about customers.” they say. It just goes to show that the Labour and the Green members on the other side have no idea about the reality of businesses. 
If a company is always more expensive than the opposition when providing the same thing it will go out of business. That is how market capitalism works. And a company will be successful for its shareholders—half the Crown and half the private sector—only if it services its customers well and to do that it needs to be as efficient as possible and to look after its own staff. The only time that that basic law of capitalism does not apply is when the State controls the provision of the goods and services and when there is no healthy competition. 
I commented in the Committee stage by quoting David Lange when he referred to State trading enterprises that his Government had inherited in the 1980s. He said that they were “ludicrously overstaffed horribly overcapitalised just embarrassments”. So the State-owned enterprises that we have today are infinitely— 
Hon Trevor Mallard 
: And people lost their jobs. 
PAUL GOLDSMITH 
: And they went on to do more effective things; they actually spent their lives doing something productive. That is what it was about. So we have a situation where we have an electricity market today that is working very effectively. In 14 out of the 21 regions in New Zealand the Powerswitch website indicates that it is the privately owned company that is the cheapest. In the past year 422256 customers have changed retailer. So that indicates to me that we have a very effective market working and that is the key to it. 
Finally I wanted to say that if ever there was a policy that was clearly spelt out by a party coming into an election with a clear mandate this is such a policy. We did not hide our light under a bushel. We came out in January 2011 and said: “This is our policy.” Labour’s entire campaign was focused on saying that this was going to happen. The Greens were opposed to it vigorously and what happened? We had a very strong clear mandate the strongest polling result for any party in MMP’s history. I am not surprised that most people are now turning their attention to buying it. 
What do they expect us to do—to go back on our word? We made a clear indication prior to the election. We are going to stick with what we promised we would do which is go through with this mixed-ownership model. We have also heard a lot of nonsense about the process. I was involved with the select committee process and I heard every single one of the submissions. It was a fair and detailed and extensive process. 
Finally we are looking forward to hearing Winston Peters speaking next. I will be very interested to hear him tell the House about back in 1988—he has Shane Jones his next deputy behind him—and the 1988 prospectus for Auckland International Airport. It was signed off by the then Deputy Prime Minister and Treasurer Mr Peters when he said: “We are very pleased with the most successful public sale. It’s popular capitalism in action.” So I will be very interested to hear from him as to what has changed in the last 12 years when he was quite happy to sell that. Now he is so strongly opposed to any of these things. 
So we are looking forward to this. I believe that this is excellent policy. I am very glad that we finally made the third reading of these bills and I commend them to the House. Thank you. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 What is private enterprise when the object is to raid the public enterprise? What is private enterprise about that? The second thing is that the previous speaker Paul Goldsmith knows full well that back in 1998 a party called New Zealand First walked out of a Cabinet and walked out of the second most powerful job in the country as Deputy Prime Minister and Treasurer because we would not sell Wellington International Airport. We learnt from our experience. How devious and specious is the National Party when it gives its word on issues like that? So let us have no more humbug like that. The day you do the same thing we will know you have got some grit and courage to stand up for principles. That is our bona fides. What is yours? 
Let us have an obituary first of all. Let us begin with an obituary for the MP for Ohariu. For 28 years Peter Dunne has sat in this House periodically switching sides so as to avoid the winds of change when they occasionally gust through here. His proudest achievements include being the only man in history to lead three political parties to oblivion. But he is also the only politician in the whole wide world to have planked on television. Remember that? That is his fame: 28 years in Parliament and he planked on TV. That is his record. What a plonker! What a plonker! Such was his desperation for relevance at the last election. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. Earlier in the debate I was forced to withdraw for using an expression that had been widely used. Much as I am reluctant to defend Peter Dunne I think calling someone a plonker for planking is probably not quite within the Standing Orders. 
Mr DEPUTY SPEAKER 
: I think the spirit of the debate was light-hearted—at least that is the way I interpreted it—but we really do not want any offence. That is why we have rules that all members are honourable members and that appropriate nomenclatures and names should be used at all times. 
Rt Hon WINSTON PETERS 
: Saved by Mr Key in a desperate exercise in deceit Mr Dunne has one last chance to redeem himself one last chance to represent his electorate and to stand up for the people of New Zealand and one last chance to act for the people of this country not for his own selfish personal egregious self-interest. In case Mr Dunne has forgotten let us remind him. In the last election this is what the United Future party’s website said: “New Zealanders would never—or should never—accept a sell-off of the supply of the water or any of the aspects around it.” That is what he campaigned on and then he used public taxpayer money to do the same on TV in his party’s advertisements and its commercials. You know the last time we checked Mr Dunne power companies had dams. Dams are there to conserve water. Genesis Power Meridian Energy Mighty River Power and Solid Energy all have an interest in the country’s water supply. That is a fact. That is what the promise was and yes for the previous speaker’s sake we do expect members of Parliament to keep their word. That is what he campaigned on. He cannot hide behind semantics now. 
Again I say that he leads the party that said: “New Zealanders would never—or should never—accept a sell-off of the supply of the water or any of the aspects around it.” That unequivocal statement was repeated in United Future’s taxpayer-paid television advertisements. So we challenge the member to dig deep find the courage of his convictions and do what is right for the people of Ohariu and New Zealand. It is his last chance so that he is not disregarded as a footnote from 28 years of doing nothing and remembered for planking. Or does he want to be remembered as the man who at the eleventh hour came to his senses regained his integrity and stopped the sale of critical taxpayer-owned assets? 
Why should we keep them? Well the great English philosopher and statesman Edmund Burke—of course he used to be a paragon of virtue to the conservatives of this country at one time when we had real conservatives and not sell-out merchants—said: “People will not look forward to posterity who never look backward to their ancestors.” In short people who do not appreciate what happened in the past leave a poor legacy for the posterity of this country and that is what National’s mission is now. Those members should take heed. These words are as relevant today in the 21st century as during Georgian England. 
The dams and power stations that supply this country with electricity were built by men of vision and stamina and across party lines. When Labour and National were running this country decades ago they agreed on these fundamental things being in the hands of New Zealanders. Their hard work and sacrifice must not be forgotten for they believed in something that the members opposite me today do not. They believed in New Zealand. They believed in our collective identity as a nation. They believed in a national purpose. But this is a Government with no sense of history no sense of purpose and no sense of what is right. They are short-term thinkers with no vision or plan to lead the nation into the 21st century and out of the crisis we are in now. 
You know we were told National would lead us to the brighter future. 
Brendan Horan 
: Over in Australia. 
Rt Hon WINSTON PETERS 
: Yes. National was going to lead us to a brighter future. “I am aspirational” says “Mr Spray and Walk Away”; “I believe in the glass being half full.” Of course he is aspirational. Basically what is he in the job for? So it can be on his CV before he swans off back to Hawaii when the going gets tough. 
Brendan Horan 
: With his bodyguards. 
Rt Hon WINSTON PETERS 
: With his bodyguards—oh not bodyguards this time. Oh no you cannot take the bodyguards when you are an ex - Prime Minister. 
You know back then people believed in the collective identity of a nation and national purpose. These members have no such belief. They said they would provide sound economic management. They even said they would stop the exodus to Australia. What a con that was—what a con! And all they have to offer is some half-baked hare-brained scheme that might raise a small amount of capital in the interim but in the long term will leave the country worse off. Every independent economist has said that. Everyone who came before the Finance and Expenditure Committee said that as well. Almost 1500 submissions all said that. 
Andrew Williams 
: And they blocked them. 
Rt Hon WINSTON PETERS 
: And they blocked them. So panicked they got the bill out of the select committee and now they are debating it in Parliament. The parliamentary report-back date for that select committee was 16 July—16 July. Three weeks from now. 
Hon Member 
: They’re efficient. 
Rt Hon WINSTON PETERS 
: No no. They wanted it out of the way. This sale will lose hundreds of millions of dollars of dividends to the country in respect of retained profits and that is only a conservative estimate. I daresay we can expect the actual figure to be much higher. To think that after 3½ years this is the best National could come up with—the best it could come up with after 3½ years. 
The worst part is that we have been here before as other speakers have said. Look at Telecom. It was sold for $4.25 billion in 1990 and delivered dividends to its foreign owners and its new owners of $15 billion. Nearly $9 billion of that went overseas. 
Andrew Williams 
: Overseas. 
Rt Hon WINSTON PETERS 
: Yes. It was sold for $4.25 billion it delivered $15 billion in dividends and $9 billion of that has already gone offshore and those members think it is a good idea—they think it is a good idea. It is a huge transfer of wealth—like a giant vacuum cleaner—out of this country every year and they talk about a brighter future. I suspect they are doing it because of the financial backers of the National Party. It is why Mr Key spent so much time with the boys from the Macquarie Group. Check out his diary—that is the inside word. That capital as I say could have been reinvested in other New Zealand productive enterprises. 
Another example is BNZ. It was sold for $1.5 billion in 1992. It has transferred to its Aussie owner $13 billion in wealth every year like a giant vacuum cleaner. No matter what we do now we are a standout economy in this context. No other similar economy has so much of its ownership in foreign hands. And we have got a group of people over here who wrap around the national flag at election time but do their utmost for the next 365 days times three to sell the flag down the river. That is their legacy: treachery and treason. They can do and say what they like but those are the facts. 
I will tell you what is going to happen. When the next election is over and the dust has settled we are telling everybody—and I mean this because New Zealand First is notorious for being tough negotiators—that we will take it back at the price we paid. [ 
Interruption 
] Laugh now and cry later. I have seen these members climbing over cut glass to get to New Zealand First. Well here comes part of the price—get that clear now. We do not intend to vacate our responsibility to the New Zealand people just because some temporarily empowered over there have decided that treason treachery and betrayal will be their political mantra. 
JOHN HAYES (National—Wairarapa) 
: 
 It has been interesting in the House this afternoon listening to commentator after commentator member after member talking about history. Well a bit like the Leader of the Opposition I was in the aid business before I came to this place and here is some history. It is actually set out in  
Time 
 magazine this week on 25 June page 9. “Who wants to be a millionaire?” is the little heading and it ranks the countries with the greatest proportion of households as millionaires. The lead country has a 17 percent share. What is the name of the country? Can anybody tell me? Let me tell you. It is Singapore. Singapore is the same size as Lake Taupo it has no assets no natural resources and it has the same population as New Zealand. So how come Singapore is at the top of the pile? When I went to Singapore in 1977 to our high commission there— 
Hon Clayton Cosgrove 
: You should’ve stayed there. 
JOHN HAYES 
: —your Government was giving them foreign aid. What was one New Zealand dollar worth in 1977? It was worth 3.40 Singapore dollars. What is it today? One for one. Who has got to the top of the millionaire pile? Singapore. Where are we? We do not even rate. There has got to be reason for that. How is it that Lee Kuan Yew and his Government have moved his country from the Third World to the First World in 30 years? 
 I will tell you how it was done. It was done without corruption because it has a clean Government. It was done through pragmatic common-sense economic policies. And if we want to stay in a poor space for our community if we do not want to buy Herceptin for women who have cancer if we do not want to retire at 65 and we want to push the age back to 75 then just stick with the Labour and New Zealand First arguments. Just stick to the New Zealand First and Labour and Green arguments. I would rather listen to the community—the community that voted in the last election. And in my electorate the community voted for exactly this legislation. I stood on the platform—there was not a New Zealand First candidate but there was from Labour and there were from the Greens. They got trounced by the people in Wairarapa. Those people said: “No no no. We don’t want to listen to holding these assets. We don’t want to have more foreign debt so we can pay interest to foreign bankers offshore thank you very much. We don’t want to increase debt. We don’t want a downgrading of our credit rating. We want to sell 49 percent of some of our assets so that we can use the capital to build better skills to build better science blocks to keep the Wairarapa Hospital going in Masterton and those sorts of things.” That is what the community said. 
And I can tell you what the polls are saying now. The polls are saying that 60 percent of those polled want to buy these shares. They want to buy these shares. So I do not understand what the Opposition is on about. The community has said that it wants to build a more competitive and productive economy based on savings and investment because that is how Singapore got there. It had 30 percent savings in their economy and everybody paid. And we want to move away from foreign debt. We want to move away from foreign lenders. We want to keep the money in our country. [ 
Interruption 
] Just keep in mind Mr Peters that we see on television almost every night of the week now the damage that too much debt has done to countries like Greece a failed State. Debt has damaged Spain and it is going to come up and damage Italy. It today damaged Cyprus. We can see that damage and we do not want it in New Zealand. No we do not. My people in the Wairarapa do not want to see that at all. 
So what this legislation does is say that we will guarantee that the Government the people of New Zealand will own 51 percent a controlling interest in the shares and that we are prepared to strengthen our capital markets by attracting money from other people particularly New Zealanders to purchase these shares. And doing that will help us not go to foreign lenders. Also requiring and preventing any other than a New Zealand shareholder owning more than 10 percent will ensure widespread New Zealand investment. 
Rt Hon Winston Peters 
: Plug him in again; he’s run out of steam. 
JOHN HAYES 
: This Mr Peters is a partial share float. It is a partial share float not a whole share float as your Government presided over. It is a partial share float and the point of doing it is to broaden and deepen our capital markets— 
Hon Clayton Cosgrove 
: This member’s broad. 
JOHN HAYES 
: But he’s not bald. We need to grow our capital markets because that is how our companies get the opportunity for more capital to grow further to add more jobs and to get into businesses like pharmaceuticals and electronics like Harvest Electronics in Masterton that will grow significant businesses and export income for this country. 
This debate is about three things: it is about controlling our national debt it is about strengthening our capital markets and it is about providing funding for new high-priority infrastructural projects. If Opposition members are so against the partial sale of these assets then I would invite them—any member of the Opposition in New Zealand First or the Greens—to stand up in this House in this debate now and give an undertaking that should they make the Treasury benches they will buy the shares back. I want to see a brighter future for my children for my grandchildren in this country. I support this legislation unreservedly. Thank you. 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 This legislation which arises from the Mixed Ownership Model Bill has been described as a “Dunne deal”. Many people have pointed to the opportunity the member for Ohariu has to stop this deal in its tracks. I want to say that it is more than just a “Dunne deal”; it is a “Dunne-y deal”. This is a deal that flushes a big chunk of New Zealand’s economic sovereignty down the toilet. This is a dunny deal for New Zealanders. Today is the third reading of this legislation. It has been an atrociously rushed process. We had in our Finance and Expenditure Committee despite what members opposite have said a rushed process. Five minutes was the limit for many submitters. We were allowed to ask one question—one question. 
Hon Trevor Mallard 
: Undemocratic. 
Dr DAVID CLARK 
: It was undemocratic as the member says. We reported back 5 weeks early despite no time pressures and we had rushed teleconference arrangements which meant many people could not make their contribution. There were no visits to my home town. Many people felt aggrieved by these rushed processes. 
Hon Trevor Mallard 
: I thought they promised to go to Dunedin. 
Dr DAVID CLARK 
: They talked about going to Dunedin but they never went there. 
Unfortunately this process still gave the Government an overwhelmingly negative message. It still fed back to the Government that nobody likes this deal this “Dunne-y deal” for New Zealanders. Just 0.6 percent of the submissions that we heard were in favour. Of the over 1400 submissions just 0.6 percent of people wished to speak in favour of this legislation. But the Government had cotton wool in its ears. 
It has no mandate. We have heard various members opposite try to argue for one. They will try and try but they will fail. More votes went to parties in the election just gone that opposed asset sales than to parties that supported asset sales. You cannot rewrite history I say to members opposite. The mandate is not there for these sales. Only 0.6 percent were in favour. Over 98 percent were against these sales. We had people voting for parties that opposed these sales not parties that supported them in overwhelming numbers and we had a rushed process designed to take the heat out of this issue. Well it will not happen. The issue will not go away. New Zealanders know that this is a bad deal. 
Mighty River Power is the first asset that National wants to put on the blocks. It is owned by all of us now; National wants to make it owned by a privileged few. There is a citizens initiated referendum out there that is gathering momentum. We know that it already has got 100000 signatures and we know that New Zealanders will be out there campaigning as it goes on. More and people are collecting these signatures. We know that number is going to grow. We know that the necessary number of signatures will be reached probably before this year is out. So the New Zealand public is giving the Government a clear message. It still may not hear it but it would be a very foolish Government that ignored a citizens initiated referendum. I would not put it past this Government but I would say it would be a foolish Government that would ignore it. 
We heard Bill English at question time today shedding some crocodile tears over salary increases for chief executives and directors under his watch. There were crocodile tears that the salaries had risen under Labour’s term. Well there can be no way that those crocodile tears mean that increasing them still further is a good idea. Yet we have heard that directors’ salaries have gone up again. And how are they going to be paid for we ask ourselves? How are those directors’ salary increases and chief executives’ salary increases going to be paid for as these companies are prepared for private sale? How are they going to be paid for? We know. We know that those salary increases will be paid for by higher power prices. This is something that we had submitters tell us through the select committee process. We asked the Government to do some research on it to have its Treasury officials do it but unfortunately it had already asked the Treasury officials to write the report before we had heard all of the submissions. 
Hon Trevor Mallard 
: No! 
Dr DAVID CLARK 
: No I am deadly serious. Treasury wrote its report. It was against democratic principles. 
Hon Clayton Cosgrove 
: It was that Todd McClay. 
Dr DAVID CLARK 
: It has been a rushed process. Mr Todd McClay was involved; it started from the chair. It is outrageous. These chief executive officer and board salaries are like the farmer fattening up the pig before it goes to the slaughterhouse. A recent  
New Zealand Herald 
 survey found that the chief executive officer pay of the four energy companies rose 26.3 percent between 2010 and 2011 compared with general chief executive officer salaries going up just 0.4 percent overall. Those directors’ fees have risen and who will pay for them? We know. We know who will pay for them. It will be us. It will be the consumers of power in New Zealand. 
There are also Treaty issues that have not been put to bed. Again the select committee process gave room for these issues to be addressed but they were put to one side. The chair dismissed them and said they were no problem. Well we glossed over them in the select committee but Tuwharetoa have not yet let go. They said that they were contemplating action that would undo the asset sales legislation. If the Government wants to use the water resources that Tuwharetoa say they gifted for public good without working through the Treaty issues it is running a big risk. We know that when Richard Prebble tried to sell off State-owned forests in 1989 the Maori Council took the Government all the way to the Privy Council because the Government was about to sell land that was subject to unresolved Treaty claims. And it won. It won and Tuwharetoa will use that as a precedent. The Government will lose. It has not learnt from history. The Labour Party has learnt from history. The National Government refuses to learn from history. 
Hon Trevor Mallard 
: That’s right. Some of us learnt with our jobs. 
Dr DAVID CLARK 
: Mr Mallard said earlier that he lost his seat and his colleagues Mr Goff and Ms King lost their seats as a result of the asset sales that took place in the 1980s. They spent 9 years in the wilderness and they learnt their lesson. The National Government did as many asset sales as it could in the 1990s but here it is back at it again. It does not bode well for National’s future election chances for it to ignore the will of the New Zealand people but on it goes. It is not willing to listen to the will of the people. 
What did John Key promise as we went into the last election campaign? He promised and these are his words—the words of John Key—“We’re giving people a commitment that 85 to 90 percent of the entire company will be owned by New Zealanders. That is my commitment to them tonight as Prime Minister.” He said that in the leaders’ debate. Well we wonder now what those words were worth because we now know that those words are not given effect in the legislation. It is like the Prime Minister promising not to put GST up. We know where that led. That led to tax cuts for the wealthiest New Zealanders while the rest of New Zealand—middle New Zealand—struggles on. So we know that those words may well not be honoured because they are not worth the sentence that they make up. There is nothing in the legislation to ensure it. 
The other point to make is that this is about mums and dads being at the front of the queue so the rhetoric goes but we know that New Zealand mums and dads already own these assets. The sale of these assets makes no sense. Most mums and dads do not have any cash to spare once they have paid their electricity bill at the end of the week. They sure as hell will not have the money to stump up to buy these shares. 
John Key says that the typical individual bundle of shares is about $5000 worth. So if you want to keep your shares in Mighty River Power in Meridian Energy in Genesis in Solid Energy and in Air New Zealand Mr and Mrs Consumer out there are going to have to fork over a total of about $25000. It is not the mum and dads I know who have that cash floating around. Most Kiwis cannot afford to pay $25000 to buy something they already own. 
This is made even worse by the economy which National has been neglecting. Rather than promoting policies that would promote growth in our country—pro-growth tax policies decent savings policies research and development policies and other policies that would support our exporters—National seems to be interested just in selling off those assets we already own. It is not interested in supporting exporters. We had submissions in the select committee that this policy would increase costs and red tape. The National Government was not interested in doing its homework. It does not actually care about New Zealand businesses. It does not actually trust New Zealand businesses to grow our stock market. It thinks we have to get Government assets on to the stock market because it does not think New Zealand business people are capable of growing our capital base. That is the message that it is sending and it certainly has lost touch. That is the thing we need to note from this. 
To conclude I want to just say that these asset sales make no sense. New Zealanders know that the citizens initiated referendum is going to bring that home to the Government and it will proceed with these sales at its peril. This is a “Dunne-y” deal. We are flushing more of New Zealand’s sovereignty down the toilet. It makes no sense. 
Mr DEPUTY SPEAKER 
: This is a split call. The first call goes to the Greens. 
EUGENIE SAGE (Green) 
: 
 Tena koe Mr Speaker. If New Zealanders thought it was such a good idea that they should have to buy assets that they already own and pay twice for them first through their their parents’ and their grandparents’ taxes for the infrastructure that the State-owned enterprises have built up—the dams the hydro generation capacity—and then through paying to get shares in the assets that the Government is now selling we would not need a massive public relations and advertising campaign to try to convince the public that it makes any kind of economic sense. 
Government members are scared. They are scared of what is happening in Europe. They are scared that in the middle of the global recession they will get so little from the sell-down of our energy companies that they will have created an even worse economic mess. They are scared that they will not be able to spend up large and underwrite irrigation schemes that they have been promising agribusiness and the construction industry. But most of all they are scared that New Zealanders will tire of their stunted economic thinking. 
They are scared because most New Zealanders oppose asset sales. Most New Zealanders know that it does not make sense to sell these strategically important and highly profitable assets. That is why tens of thousands of New Zealanders are signing the petition to get a referendum on these asset sales and that is why the Government is spending $120 million some of which is going to organisations and companies like Clemenger BBDO and SenateSHJ to run a public relations and spin campaign to try to persuade Kiwis that it is a good idea. 
The expertise in our State-owned energy companies could be the cornerstone of a cleaner smarter and more robust economy. It could help New Zealand lead rather than lag in the race for green growth. As the recent Pure Advantage report noted many OECD countries are demonstrating the link between green growth and strong economic performance. To quote the report: “Countries all over the world are investing in green development to help their economies’ transition to a more robust sustainable and economically benign platform.” But not in New Zealand. No under this Government we lag behind both in our environmental indicators and in the Government’s seeking of economic nirvana through dinosaur thinking of the last century on intensive resource exploitation. We are seeing that this week with the aerial surveys over the South West New Zealand World Heritage Area to find mineral resources.  
We have the resources in Aotearoa and we have the expertise and the experience in producing renewable power and in managing grid systems that supply renewable energy. The Government is selling our best opportunity to become large-scale exporters of renewable energy technology and that is because under this legislation there will be no statement of intent provided to the companies by Ministers no principle of social responsibility and no ability for Government Ministers to influence and direct the companies towards cleaner energy technologies and to have an operating strategy that benefits New Zealand’s overall energy strategy and mix. 
Worse still this legislation will make our debt problems worse. The Government says that it has an expectation that no more than 10 to 15 percent of the shares in these companies—that is 20 to 30 percent of the shares it wants to sell—will end up in foreign ownership but that is $2 billion more foreign ownership $2 billion more on our net international liabilities. We already send about $10 billion a year overseas in profits to the owners of our companies and to our foreign debtors. Selling our energy companies to foreign owners will only make that worse. Even on the very conservative numbers provided by the Government about $100 million a year in profits will flow offshore. That is $100 million a year that we will have to make up for by borrowing or selling more assets. 
There were amendments suggested in the Committee stage that would have put a fence round foreign owners and investors buying these assets. Those amendments were sensible but they were opposed. So there is nothing in this legislation that ensures that Kiwis get the major stake in these assets and that is because the Government knows that Kiwis cannot afford to pay again for what they already own and so it needs to sell to overseas buyers. If the Government and its support partners were serious about these asset sales being an opportunity for Kiwis to invest they would have supported those amendments. 
We oppose this legislation. Tens of thousands of New Zealanders oppose it and are standing up for Aotearoa and a better economic future. 
MOANA MACKEY (Labour) 
: 
 We often have robust debate in this House but there are very few days that you can actually say are a day of shame for the New Zealand Parliament. This unfortunately is one of those days. National knows that it does not have a mandate to sell State assets. It knows that despite the fact that we are going to save some money in terms of debt servicing we are going to be losing more money in terms of the revenue flow from those companies and we are going to be $100 million worse off. National members know that. They know that overwhelmingly New Zealanders do not want them to do this but they do not care. They do not care because the people that they really represent in this Parliament the people they trot down to Wellington every week to truly represent do support asset sales. They are the 1 percent that is going to benefit from the hocking off of the assets that the rest of us own. There are very few opportunities to see that glimpse of truth of whom National really represents. Rarely do we get it but we have got it on this legislation. The 1 percent—that is whom those members come down here to represent. That is who is going to benefit and it is the rest of us who are going to pay for it. 
They like to say that this is a great opportunity for mum and dad investors. Well mum and dad investors already own these companies. And if there ever was a more true definition of Tory charity it is selling people something that they already own and then expecting them to be grateful for it. Mums and dads already own these assets. Most mums and dads I know are more concerned about how they are going to pay the power bill than trying to buy the power company. That is how out of touch the National Party is. 
The quality of the Government’s arguments and speakers we have had so far speaks volumes. We had Todd McClay chair of the Finance and Expenditure Committee who oversaw a shoddy process where he reported back 5 weeks early. He rammed the Mixed Ownership Model Bill through the select committee process so that it did not have the public scrutiny it needed. They often say that the role of the Finance and Expenditure Committee chair is an audition for Cabinet. Well I can say that based on his performance he can look forward to a long political lifetime of patsy questions Mr McClay—a long lifetime. I remember when I sat on the Finance and Expenditure Committee and the National Party went apoplectic about how rushed that process was. Do you know how long that process took? It took 58 hours of hearing submissions and 16 hours of deliberation. Well under Mr McClay’s watch the committee departmental report was written before the submitters had even submitted and there was less than an hour of deliberation—less than an hour. That is a double standard and it shows just how scared National is about the political impact of this legislation. 
Then we had Paul Goldsmith who lectured us on the virtues of market capitalism and told us that only private companies can ever run anything efficiently. Apparently the global financial crisis was just something that happened to other people in Mr Goldsmith’s world. He says that we have to do this because that is the only way we are going to get productivity out of these companies. 
But National’s king-hit argument is that it is doing it because Labour did it a quarter of a century ago. Well it was wrong then and it is wrong now. Labour paid politically and electorally for those decisions and more important the country paid economically for those decisions to privatise in the 1980s and 1990s. That is why the last Labour Government sold no assets. In fact we had to purchase some of them back because they were being stripped and because they were at risk of falling over. I wonder whether Mr Goldsmith thought that Air New Zealand was a shining model of market capitalism when it nearly got bankrupted and the Government had to bail it out—the Government had to bail it out. 
Kiwis know that we are all going to be poorer as a result of these sales. They know that power prices are going to have to go up when the motive becomes profit maximisation rather than any kind of aspect of social responsibility. The State-owned companies under their current legislation have to show restraint around pricing and have social responsibility. That is why on average they charge less than the privately run companies. The Government’s response to this is to say that no people are going on the internet to swap power companies and that shows the market is working. No it does not. It shows that people are desperate. It shows that they already cannot pay their power bills and they are looking for any way to reduce that burden. That is why New Zealanders oppose these asset sales: because power prices are going to go up. 
New Zealand is unique in the world in not having any protections for domestic power consumers to ensure that they can pay the power bills. That is why since the global financial crisis hit in New Zealand power prices have continued to increase while everywhere else in the world as those protections have kicked in power prices have gone down. There is no protection for domestic power consumers in New Zealand. Power prices will go up. The Government does not have a mandate to sell these assets. It should admit that. Where is Peter Dunne the man whose— 
Mr DEPUTY SPEAKER 
: Order! Time has expired. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Speaker. Kia ora tatou katoa. I am pleased to take the opportunity to represent the Maori Party in setting out our position on this legislation. The Maori Party has maintained a clear position on the mixed-ownership model from the moment it was mooted and that is to oppose this legislation which enacts National’s decision to sell a significant share in specific State-owned assets. The planned sale of power companies raises issues of ownership and management of freshwater and other natural resources that are still under discussions between iwi and the Crown. We absolutely support the well-founded right of Maori to be party to those discussions. We also remind the Crown of its obligation to enter into dialogue with its Treaty partner and I hope to speak to that matter shortly. 
Let me make it clear that we strongly oppose the removal of the four State-owned enterprises from the State-Owned Enterprises Act and the proposal to sell 49 percent of these important Crown assets until historical Treaty settlements are concluded with all claimants who wish to include these assets in the redress package. We should not claim that not a lot is left in the bucket on the one hand while at the same time selling off the resource. 
Our position has been informed by the context of some fundamental kaupapa that the Maori Party believes in and it forms the foundation of our analysis of the legislation. Kaitiakitanga talks about resource management and healthy water land and people. Whakapapa relationships talks about the relationship between the sea and inland and our commitment to enhancing the well-being of whanau hapu and iwi. It is also about understanding the interconnectedness between the different elements of our environment. Mana whenua and mana moana are about rights and responsibilities. These are the sorts of kaupapa that give us a Maori world view and concepts by which we should operate.  
Then we must consider the historical context: a history shaped by far-reaching decisions throughout our history in education land te reo Maori forestry radio and television. It is a history that has helped define our nation ensuring that Maori have the same rights as others to the protection of law and recognising our unique distinctiveness as tangata whenua and as one of the two partners of the Treaty. Vitally it reminds us all of the constitutional significance of Te Tiriti o Waitangi as instructing us on how we should live together as partners.  
Since the famous New Zealand Maori Council lands case in 1987 Treaty protections have kept economic and strategic assets of huge value in New Zealand hands; they have been guaranteed protection by the Treaty of Waitangi settlement process. To arrive at a point whereby that partnership is beginning to be recognised by the Crown through its legislation has taken many many years and we have been absolutely determined to follow that through and preserve it. This legislation is a backward step that makes a mockery of a proud history and in particular section 9 of the State-Owned Enterprises Act 1986 which declares that “Nothing in this Act shall permit the Crown to act in a manner that is inconsistent with the principles of the Treaty of Waitangi.” 
 Despite voting against this legislation we are happy enough with the precedent established by that section 9 which is retained in this legislation. We fought very hard and to the wire to ensure those protections were maintained but we know that the fight is not over. Although we know that the legislation imposes Treaty obligations on the Crown there are however some fish-hooks about how the Crown will exercise its Treaty obligations. As a case in point the Crown Treaty obligations apply only to the exercise of the Crown’s powers as a shareholder. And what would that mean in practical terms? That is pretty much uncertain at this point. Under this bill the Crown-appointed directors would not be subject to the Crown’s Treaty obligations. Although it would be unorthodox it would have been a showing of good faith if this bill spelt out how the Crown’s Treaty obligations would be met through its directors. These questions prompted us to vote in support of the amendments put forward by Mr Mallard and Mr Parker at the Committee stage that would enable companies and the directors placed under a mixed-ownership structure to continue to be bound by the principles of the Treaty of Waitangi but it was not to be. 
This legislation has been a mammoth exercise that iwi Maori have been actively engaged with. The Maori Party pays a huge tribute to all of those iwi and indeed to the 1488 submissions of which many were from iwi and hapu groups for being prepared to stand up and be counted. It would be impossible to summarise these views but I did want to ensure that this final debate ends with the words of iwi. In this case I have turned to the submission from one of our own Te Ariki Tumu te Heuheu on behalf of Ngati Tuwharetoa. The collective Ngati Tuwharetoa position was to oppose the bill on five clear grounds and I will outline those now. 
 Firstly they said that “Ngati Tuwharetoa are the legal owners of the lakes and rivers used by Mighty River Power and Genesis Power …”. Their concern is that the model privatises electricity generation operations on their waterways without them having any say in the matter. They are not prepared to stand by and watch private commercial interests generating private profits from lakes and rivers they own in freehold title. 
Part 2 of the submission was about the fact that these power schemes were established to generate electricity for the public good not for private profit. Sir Tumu in his eloquent way said that “The model expressly enables the privatisation and consequential commercialisation of schemes that were previously operated in the national interest.” Tuwharetoa also remarked that it was a very auspicious occasion in 1993 under the National Government of the day when Lake Taupo was returned to the hands of Ngati Tuwharetoa. This legislation will now urge them to reconsider their position around public free access in light of the likely commercial exploitation of the Taupo waters. 
The third element I want to talk to from the Tuwharetoa submission was that “justice dictates … our opportunity to reach a fair resolution … Treaty claims should not be foreclosed by the sale of the SOEs.” This is a key position for iwi across the motu—that our rights need to be properly provided for before the sale of any State-owned assets results in the trampling of those rights. The fourth issue raised was that Ngati Tuwharetoa has a relationship with the Crown and is therefore entitled to expect that the Crown will act honourably and consistently with its Treaty obligations. This is what they expect as a party to the Treaty relationship. 
Finally they said that relationships with the Crown are critical to the success of electricity generators like Mighty River Power and Genesis and yet this does not get translated into this bill. Tuwharetoa describe the significant relationships that they have entered into with various landowning entities and Mighty River Power such as the joint ownership of Tuaropaki Power Station. 
I want to make it clear that we are not here to tell iwi what to do with their money but I think that the points that Ngati Tuwharetoa and indeed many iwi have made in opposing this legislation are really important drivers as to how the Government can expect to work in good faith with iwi going forward. 
One of the critical omissions in this legislation is that it does not include a social responsibility requirement as in section 4(1)(c) of the State-Owned Enterprises Act. That section requires each State-owned enterprise to amongst other things be “an organisation that exhibits a sense of social responsibility by having regard to the interests of the community in which it operates and by endeavouring to accommodate or encourage these when able to do so.” This has been a really important basis for many iwi in establishing an effective relationship with the entities. It has provided an important balance to the commercial focus of the State-owned enterprises and reflects the public good—say for electricity generation—for which they were established. A lesson for the Government must be to build on these relationships and to be socially responsible. 
Finally I want to reiterate the Maori Party’s strong opposition to this legislation but also our commitment to futureproofing the next generation. Thinking ahead is an important pillar to making sure that we look after our natural resources and the management of them. Our customary rights to use resources were founded on customary responsibilities to protect sustain and enhance. We agree with the analysis by Mr Brian Gould that the stated reasons for iwi being keen to be buyers in the question of our State-owned assets deserve some attention. His view was that iwi have made it clear that their intention—and here is the punchline—is to buy so that they can hold the assets in trust for future generations of Maori. In this respect we have pushed for iwi to have their own share category as tangata whenua and we know that these negotiations are still in progress. How National responds will be an ongoing marker in the relationship it has with whanau hapu and iwi into the future. We oppose this legislation. 
DAVID BENNETT (National—Hamilton East) 
: 
 As the last speaker in regard to the State-Owned Enterprises Amendment Bill and the Public Finance (Mixed Ownership Model) Amendment Bill it gives me great pleasure to be in this House today. This is a debate that has changed over the course of the last hour or so in this House. We have seen the debate develop into one of economic management and economic discipline. We have seen a debate around a plan for the future of how we deal with the situation that New Zealand and the rest of the world face. Clearly you have on one side of the House the Opposition which has an economic model that has been unproven and ineffective. On this side of the House you have an economic plan that is about good strong economic management and making the right decisions even though they may be the hard decisions to make. 
When we look at this legislation we all realise the issues involved. There is a lot of tension around the House around this issue and there is a lot of respect for the issues and the arguments that can be made on either side of it. But we have to make the right decision now. These are difficult times and in difficult times we need leadership. This leadership that you are getting here today is one from the Government where we have identified an issue that has gone to the public over the last year. We have looked into that issue and made a hard decision on how we deliver the best economic management for New Zealand going forward. That leadership has to be to follow that decision through. That is hard and it is difficult in any organisation and in any country. Yesterday you saw it in the dairying industry that it had to make a hard decision even though there was a difference of opinion. Sometimes in this role of governing this country we have to make those decisions. 
Energy assets will always demand public attention and they will in the future because we have a growing population and we have a growing world economy that will look at food and energy as major resources going forward. The Government has recognised that with the 51 percent strategic shareholding in these assets. 
We have heard many comments in this House about the political history of asset sales or the mixed-ownership model in New Zealand. We have heard parties say that they have been through that and have learnt their lessons. I do not know whether that is necessarily the case. I see those parties over there using that as a convenient byline at this time. They do not go back and buy back BNZ and Telecom even though they like to use those examples in this House. We need to be realistic about economic conditions in New Zealand and around the world. We as a Government cannot own everything we as a Government cannot control everything and we as a Government cannot do everything. This country relies on a partnership between the Government individuals enterprise and industry. This legislation enables us to bring that partnership in one of our most crucial industries going forward. 
We often hear about the loss of dividends. Well that is not the case. The public out there need to understand that there has been a distinction between capital and income dividends and that you have seen the Opposition using a higher figure to inflate its argument. The returns will still be taxable here and New Zealanders understand this. 
We need a Government that will make the right decisions to invest in our country going forward. This is what you are getting from this Government. We are looking at what are the best ways to manage this economy without raising too much debt and without inflicting an economic management that would kill the growth of the country going forward. If we do not make these decisions now New Zealanders will not have the choice around how those decisions will be made in the future. We need to make those decisions now and this legislation makes those decisions but it also gives flexibility to the Government in how that float process is undertaken. When we look at that float process the Government has made it clear that it wants New Zealanders to be at the front of that queue. We look forward to that progress as we go through the rest of this year. 
This is important legislation. It is not about the rhetoric on both sides. It is about doing the right thing for New Zealand in these difficult times. We are doing that. This is leadership. It is tough but sometimes tough decisions need to be made in the best interests of your country. 
Mr DEPUTY SPEAKER 
: Order! [ 
Interruption 
] Order! I have called for order. Members the Mixed Ownership Model Bill that was reported back to the House was divided into two bills in the Committee stage so there are two questions. 
A party vote was called for on the question  
That the State-Owned Enterprises Amendment Bill be now read a third time.  
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 60 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Maori Party 3; Mana 1. 
Bill read a third time. 
A party vote was called for on the question  
That the Public Finance (Mixed Ownership Model) Amendment Bill be now read a third time.  
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 60 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Maori Party 3; Mana 1. 
Bill read a third time. 
ANDREW WILLIAMS (NZ First) 
: 
 I raise a point of order Mr Speaker. I would like to draw your attention to Standing Order 141 “Personal vote following party vote” where it says: “A personal vote may be held following a party vote if a member requests one and the Speaker considers that the decision on the party vote is so close that a personal vote may make a material difference to the result.” I think this vote is so close and this is very very significant legislation before this House. I would request that a personal vote be taken. I would seek the Speaker’s ruling that this become a personal vote on this matter. 
Mr DEPUTY SPEAKER 
: The answer is that this is a vote that has been carried by one which has quite frequently been the case. In no previous case in my experience in the House has a majority of a single vote—where there have been clearly cast votes—been any reason for a personal vote to be taken. So the point of order is overruled. 
Andrew Williams 
: I raise a point of order Mr Speaker. 
Mr DEPUTY SPEAKER 
: Well we are not going to address the same point of order Mr Williams. 
ANDREW WILLIAMS (NZ First) 
: 
 No. We cannot be 100 percent sure that all— 
Mr DEPUTY SPEAKER 
: Order! Order! The member will resume his seat. I have ruled on this matter. There is no reason for a personal vote. I call on Government order of the day No. 3. 
Andrew Williams 
: Point of order Mr Speaker. 
Mr DEPUTY SPEAKER 
: Look I have ruled on this matter. 
Andrew Williams 
: Well I would like to seek that the Speaker be— 
Mr DEPUTY SPEAKER 
: I am the Speaker for the purpose of this Parliament. If the member raises one more point of order he will leave the Chamber. 
Prisoners’ and Victims’ Claims (2012 Expiry and Application Dates) Amendment Bill 
In Committee 
LOUISE UPSTON (Junior Whip—National) 
: 
 I seek leave of the Committee for this bill to be debated as one question. 
The CHAIRPERSON (Lindsay Tisch) 
: Leave is sought for all provisions of the Prisoners’ and Victims’ Claims (2012 Expiry and Application Dates) Amendment Bill to be taken as one question. Is there any objection to that course of action? There is no objection. 
Parts 1 and 2 and clauses 1 to 3 
CHARLES CHAUVEL (Labour) 
: 
 I think it probably is a sensible decision to take the Prisoners’ and Victims’ Claims (2012 Expiry and Application Dates) Amendment Bill as one question in the Committee. It is a short bill. I want to say just a few words so that those listening and members who have not had the benefit of sitting on the Justice and Electoral Committee do understand the context of the legislation. 
Back in 2005 Parliament enacted the Prisoners’ and Victims’ Claims Act. This was in response to widespread concerns about the decision of the High Court in a case referred to and reported as  
Taunoa 
 where an inmate sued the Crown because he had suffered what the court decided was an abuse not only of his physical well-being but of his human rights through the application of what was known at the time as the BMR—the behaviour management or behaviour modification regime operated by the Department of Corrections. What happened is that the High Court said on that occasion that the inmate was entitled to a substantial award of damages to in part indicate that the behaviour of the prison officers concerned—sanctioned it seemed by the department—was not condoned by the court. There was real concern at the time about the position of those who had suffered loss—physical or otherwise—as a result of the misdeeds of offenders who were serving time in prison and had received a windfall payment of compensation through the application of the precedent in  
Taunoa 
. As a result of that concern the 2005 legislation was enacted. 
The 2005 legislation as can be seen on its face was always intended to be temporary in effect. There are two sunset clauses in that Act. Part 1 of the bill before us in Committee today would extend one of the sunset clauses and Part 2 would extend the other for a period of 1 year. The reason for this extension was canvassed in the second reading debate. There was as is known a change of Minister of Justice between the previous election and now. For whatever reason the Order Paper was not in sufficient order to see the legislation that was proposed to replace the 2005 Act brought through all of its stages in order to be enacted. When that became obvious the Minister of Justice approached as I understand it a number of parties and said well what do you want to do with this legislation? Do you want it to expire in which case there is a real risk of that; do you want it rushed through the House; or is there some other way that we could deal with it—for example by a short extension of the current provisions of the legislation? My colleagues and I discussed the issue. We could not see that it would be just as far as the victims of offending were concerned to simply allow the existing regime to lapse. Although we would have preferred a considered discussion of what ought if anything to replace the 2005 legislation we were in the end agreeable to a short extension of its terms in order to allow that careful consideration of replacement legislation to occur. 
So that is the simple background to the bill that we are considering with its two extensions of the relevant sunset clauses for 1 year only to 1 July 2013. As to what might happen after 1 July 2012 it is my hope that we will get some sensible discussion both at the Justice and Electoral Committee and also hopefully between spokespeople about what ought to be the replacement model for the 2005 legislation. In respect of that discussion it seems to me that we need some information to be put on the table. 
First of all how much use has been made of the existing legislation? To what extent have the victims of offending found it a useful tool to try to make themselves whole as a result of having suffered loss through the wrongdoing of people who then ended up in jail have themselves won damages and then have had some of those damages go to their victims? The figures I have to say are a bit disappointing. Although the Minister was not initially willing to disclose them she made some disclosures in her second reading speech and further disclosures were made during the estimates process by the Department of Corrections. So we now have a relatively full idea of the extent of the use of the Act and of the contingent liabilities that accrue to the Crown as a result of potential pending claims. Frankly it is not a particularly compelling picture. That is not to say that this legislation was not the right thing to do at the time but that is not the question before the Committee and perhaps later at the third reading stage the House; the question is what we ought to do now with this legislation. 
My colleague Phil Goff made I think a compelling point in the second reading debate and that is if we are going to rethink this from the perspective of the victims of offending without violating the human rights record of our country or the rights of those who are serving sentences in our prisons how best should we do it? Well first of all what logic is there in restricting any ongoing legislation simply to those who are sentenced to a custodial sentence? What about community-based sentences? Why should people who have simply managed to avoid jail avoid having to make some sort of payment to their victims in the event that they receive a windfall payment at some point during their sentence? That just does not seem to be logical. Secondly why should the windfall payments be restricted to payments from the Crown to the offender? What about if the offender somehow gets some enormous payment from a will or from a Lotto win or from some other means? Why should the victim of their offending have to go through the ordinary processes of suing in the court all the expense all the trauma all the delays that we know are inherent in civil litigation in order to try to recover something to recognise what they have been through? 
So I think this rethinking needs to happen and if we are to support something going forward it needs to be based on principles it needs to be based on the idea that victims are entitled to recover something if it is possible to make a recovery and they should be able to do that without having to go through the hoops as it were of the legal process. It should not matter as I say how that money becomes available. If it is within reach legally as it were it ought to be reachable. But the second principle—and the most important counterbalance to that—is obviously what we have learnt as a result of observations from human rights bodies and other experts about the operation of this legislation. Can we balance those considerations and what is an important factor for New Zealand which is our very proud record of preserving and protecting human rights on the international stage while maintaining a regime in this sort of area that does look after those who suffer from crime or their families? It is that balancing act that this bill will give us only a year to consider. We have assurances from the Minister that we will be able to perform that exercise adequately. Really what I want to do—in conclusion in this speech—is give very clear notice that we will be holding her to those undertakings. 
Hon PHIL GOFF (Labour—Mt Roskill) 
: 
 I am pleased to take the opportunity to speak to the Committee stage of the Prisoners’ and Victims’ Claims (2012 Expiry and Application Dates) Amendment Bill. But I guess the first thing we need to say about this bill is that actually it should not be here. The only reason this bill is here is that the Government over the last 3 years has ignored the fact that there was an expiry date of 30 June 2012 on the Prisoners’ and Victims’ Claims Act and that despite having that 3 years’ notice nothing—or too little—was done. Hence we are in the position today of debating a bill that does one thing rather simply: it extends the expiry date from 30 June 2012 to 30 June 2013. So I think the point has to be made to the Minister in the chair the Associate Minister of Justice—and I know that you were not Minister through that period so I am not holding you personally responsible—that your party did not adequately manage what it was required to do to have a proper response to an Act that you have known for 3 years is going to expire this week.  
The Act in 2005 was passed for a very specific reason which was that in the wake of the behaviour management regime that was introduced in 1998 and had been in place for 6 years the regime was subsequently found to be in breach of rules that we had signed up to internationally. Very clearly the system was outside international standards under which inmates are properly treated. And I have to say that regardless of the heinous crimes that many of these inmates have committed we still have a rule as a civilised society that we treat people according to the standards that are proper within our prison system. So it is with a sense of irony that I recall Tony Ryall standing up and debating that legislation in 2005 and saying that the whole thing should be thrown out because inmates have no rights. It was I think political populism at its worst. I want to acknowledge the Minister in the chair who has extensive experience in the New Zealand Police force for taking a far more reasonable and considered view on this. 
I suppose if there is one irony it is that National has totally reversed its position and now wants to keep an Act that it fought tooth and nail originally while the Green Party wants to oppose an Act that it originally supported. I do want to comment on that because I think the minority report by the Greens is actually wrong in the premises that it works from. The idea that ensuring that payments made to inmates be available for those inmates to compensate their own victims for the damage done to them would encourage abuse of prisoners is just totally unfounded. There is absolutely nothing that the current legislation has done that in any way condones allows or encourages the abuse of prisoners. There is a whole range of ways in which when the system works wrongly and those wrongs have to be righted the people who have committed the wrongs within the system can be found accountable and that is right from the ability to complain to the Ombudsman to writing to your parliamentarians. When something goes wrong in the corrections system it must be corrected and if people behave wrongly within the corrections system and deliberately so there should be harsh sanctions against them—loss of job for one thing. So having a system whereby victims get compensation when an inmate is in a position to pay that compensation is not a perverse incentive for abuse within the system. I do not think despite what the Greens have said in the report there is any support for that at all. 
I do agree with the international obligations that the Greens’ minority report refers to. Those international obligations are real and we pride ourselves on keeping within the obligations that we sign up to. The credibility of any country depends on acting upon the things that it agrees to do puts in a treaty and signs and ratifies. 
I want to come back to the opportunity that the Government’s negligence in not actually addressing the problem earlier has created for us. I agree with Charles Chauvel that it really is important that the Minister of Justice does honour the undertaking made that we will properly review what needs to be done. The reason that I originally brought in the Act that is being extended was not so much about disgust that inmates were getting compensation; it was that sense of fundamental wrong that an inmate whose rights were breached could get compensation but that the trail of victims that that inmate himself—usually himself—had created got no benefit of compensation. I said in the second reading that fundamental to justice is that concept of restorative justice that the way in which you achieve justice is for the person who has committed a wrong against another to be required to right that wrong to the extent that they are able to. That is why restorative justice I think is the best form of justice. 
We have a system of justice in this country—that Chester Borrows knows about—that is essentially adversarial. You know we almost forget about the victim. When you have a case it is the Crown against Smith. Smith is the offender and the Crown representing the State is the prosecutor but where is the victim in that mix? The victim is nowhere to be seen in that mix. What we want is a system where the victims are at the centre of it and where the victims get proper compensation restitution reparation—call it what you want. 
We have a system at the moment where if at the time of conviction the accused is unable to give any reparation or restitution to the victim they never have to pay it. But what about a situation further down the track where that inmate for example wins Lotto? That is not quite so likely in every case; it is more likely perhaps that the inmate receives a bequest—[ 
Interruption 
] Yes. The inmate or the person who has been convicted later comes into the means whereby they can put things right for the victim but they never have that requirement on them to do that. In the legislation that I passed originally it took a very narrow sector of offenders—those who got compensation because their rights were breached—and said they should do that for their victim. 
But I think we should use this opportunity to look much wider at the way we can require a person who has committed terrible crimes against his victim to be required to make reparation for that. I see in the papers a guy in relation to Jane Furlong’s murder who was a gang enforcer and now apparently is a semi-respectable businessman. I probably do not need to mention his name in the House though it is mentioned in the papers. He is probably doing very well but what about the victims he left behind him? He is living the good life now; the people whom he made victims of still bear the scars of his offending and he has never been required to put things right. 
So my challenge to the Minister is to use this year’s extension that we have given to the legislation to show a genuine concern for the needs of restorative justice and to work through a process—and we are happy to work I think across all sides of the House on this process—to ask how we can ensure in the maximum number of occasions that the victim can properly receive the restitution or the reparations that are owed to them. That would be far closer to achieving justice for those victims than simply extending this Act or as the Minister has foreshadowed in another piece of legislation that has not yet been debated prisoners’ compensation maybe just going into a general fund for victims. The most powerful form of justice is where the offender directly puts things right for the person whom he has offended against. If we can devise a system—and there are other systems and models around the world that we can look at—we would get a piece of legislation that I think would achieve true justice in this country. 
DAVID CLENDON (Green) 
: 
 I am pleased to take a brief call on this quite brief bill the Prisoners’ and Victims’ Claims (2012 Expiry and Application Dates) Amendment Bill. In particular I would just like to address Part 1. It tells us in Part 1 that the purpose of this part is to amend Subpart 1 of Part 2 of the principal Act—in effect to extend it by 1 year until the end of June in 2013. That is fairly innocuous on the face of it but effectively it extends for another year a piece of legislation that has not been proven to be particularly effective and that does create some serious concerns about the nature of the delivery of justice—restorative justice indeed. I will refer to that point briefly. 
I think the purpose of this bill could more rightly be stated as actually compensating for the inaction of this Government in this term and indeed in the previous term. For whatever reasons it is interesting to trace the genesis of this bill and how we got to this position we are in. The substantive legislation of course was passed in 2005 with an expiry date of June 2010. Clearly this was known so there was a 5-year opportunity indeed to think through what was going to either replace this bill or indeed allow it to hit that sunset clause and go out of existence. The National Party’s statement of its policy on victims and crime in 2008 made it clear that it intended to maintain something along the lines of this legislation. Therefore it was not that the Government had to develop policy yet it was not until 22 April 2010 that the Government brought into the House a bill to extend the provision to give the first extension to that 2005 legislation. It was tabled on 22 April 2010. A few days later it had the first reading; 1 bare calendar month was allowed for the select committee to consider it. A few days later under urgency it was sent through its second reading its Committee stage and its final reading to extend it to the date coming before us now—to 30 June 2012. 
Once again we find ourselves—not in urgency but certainly looking to pass this legislation a matter of days before it is due to expire when the sunset clause kicks in—doing this under extended hours. Tomorrow morning we can expect that this will go through its final stages. One must wonder at the process. The expiry of this legislation was I believe always intended to be accompanied by or to be in parallel with a substantial conversation a discussion about how best to deal with victims how best to ensure that victims do get some rightful restitution. I am quite sure nobody has any argument with that and we in the Greens certainly do not. The principle of restorative justice is at the core of our justice policy. 
We know that with this bill the Government has weighted numbers. It has been supported by the Labour Party for reasons that I can understand up to a point. It is encouraging open to and hoping and expecting that we will get a 12-month debate—an intelligent informed debate about how best to ensure that victims get rightful restitution. I have much less confidence than the Labour Party obviously does that we will get that open debate simply because we have a bill on the table—the redirection bill—that will make most of the provisions of this current legislation permanent. I simply do not have any confidence that in the context of that bill coming up before us quite soon there will be this open debate about the very nature of the justice system. 
Clearly we all want restitution for victims. A key principle of restorative justice is certainly about restitution but it is also for the victim to see that the offender has internalised the fact that they offended and that the victim was hurt. The genuine remorse from an offender is an important part of the restorative justice process and nowhere in the extension of this legislation—or indeed in the redirection bill that we will be debating presumably some time in the next few months—is there really reference to that fundamental part of restorative justice that looks at the whole breadth of the offender once more being made to feel that they are secure that their rights have been— 
Hon CHESTER BORROWS (Associate Minister of Justice) 
: 
 Thank you for the opportunity to take a short call in respect of this Prisoners’ and Victims’ Claims (2012 Expiry and Application Dates) Amendment Bill. Points have been made across the House that have been very pertinent to the question of the extension the validity of extending this legislation forward for 12 months in order to get a solution that has buy-in from other parties and will see us into the future. I also pick up on the points made by Charles Chauvel and the Hon Phil Goff in respect of the need to be able to get some permanent solution in respect of compensation and remediation for the wrongs that are done by offender to victim and the anomaly that the victim of a person in prison has the ability to get some compensation but the victim of an offender who has a community-based sentence or who has been released from prison who later comes into a degree of wealth does not. I think these are all questions that need to be addressed. 
I also take the point that the way that we treat those who are the most despised in our community is also a measure of our civilisation as a society. I do not believe for a moment that we can turn a blind eye to the fact that many of our victims end up in prison because they are also offenders and vice versa. I believe that it is important that we put victims at the centre of our justice system and at the same time recognise that on occasion those victims are standing in the dock. I think a number of these questions are hard questions but there will be a way that we can chart through it. I believe it is incumbent on us as a Government to do that. 
I do also want to make another point and that is we have been criticised as a Government for not getting to this legislation over the 3 years prior to the last election. It should be pointed out that this Government passed a large amount of legislation through the Law and Order Committee and the Justice and Electoral Committee and the vast majority of those pieces of legislation were supported by the Opposition. It cannot be said by any means or in any manner whatsoever that this Government was recalcitrant in its duty to pass legislation. It is not unusual for sunset clauses to be extended when Governments of either colour have not been able to get to that legislation. I commend this bill to the House. 
DENIS O’ROURKE (NZ First) 
: 
 This Prisoners’ and Victims’ Claims (2012 Expiry and Application Dates) Amendment Bill as we know simply extends the current regime for a further year while new legislation is developed. I want to emphasise that because New Zealand First does not expect that the current regime will simply carry on after the delay of another year. What we do expect is that there will be a rigorous examination of the current regime under the current legislation to see whether it does work whether it is worthwhile whether in fact it is necessary at all and whether it has achieved or is capable of achieving its current objectives. We do not know whether or not that is the case yet but for the time being New Zealand First is happy to accept the bill as it is to extend the date for a further year and to support the bill on that basis and also on the basis that there will be genuine consultation and a willingness to listen by all parties in the House so that we can in fact get some legislation for the future that is really worth having. 
I am not saying that necessarily the current legislation is a failure—I do not know whether or not that is the case yet—nor am I saying that it is needed. It is yet to be seen whether that is the case. But I do know that there are some underlying principles that I think we should always observe in considering the new legislation to be developed. First of all we must make sure that the penalty a person who is imprisoned gets is just the loss of liberty. That is the penalty they have been sentenced to and nothing else. I do not believe that it should get in the way of opportunities for rehabilitation education and reorientation of their direction in life. I do not believe that it should result in the loss of other rights such as the right to vote and the right to protection from personal or mental abuse while in prison or result in the loss of services like decent medical care and it does not mean either the loss of a right to accident compensation for genuine— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! The member must refer in the Committee stage only to what is in this bill. He cannot expand it out. 
DENIS O’ROURKE 
: What I am saying is simply this. We have a year within which to develop new legislation and this is the basis upon which New Zealand First says that this new legislation should be developed. Central to this are rights; whether prisoners should be able to have the same rights to compensation—accident compensation or compensation for mistreatment—while in prison. That is central to this bill so I do not see why that should not be discussed right now. And it does not mean of course the loss of other rights as well. 
On the other hand there is no doubt that there needs to be a balance of the preservation of all of those rights with the fact that some prisoners do attempt to abuse those rights and we have seen some of that happen in recent years. We certainly should not mollycoddle prisoners and we should make sure that there are no rorts attached to their exercise of the rights that they have especially those that I have mentioned—for compensation. There does we believe need to be the development of some special rules around what sort of compensation and what circumstances prisoners can claim compensation for whether it be for an accident or whether it be for mistreatment while in prison. Those are the sorts of rules that we expect to see developed as part of the coming legislation. That balance needs to be there to meet community expectations and to make sure that rights are not abused. 
Finally I do want to make some comment on the point that other speakers have made concerning victims of crime in relation to restorative justice. We should consider as part of the rules I have spoken of whether any compensation paid to a prisoner however it may arise should be capable of transfer to their victims and therefore the need for restorative justice in that way. There are two choices there. Either that should be the case only for the victims of a particular prisoner’s actions or the compensation should be available to all victims of crime in a pool or fund held for that purpose. I believe that it is only appropriate for us— 
JULIE ANNE GENTER (Green) 
: 
 Tena koe Mr Chair. I rise to take just a brief call on the Prisoners’ and Victims’ (2012 Expiry and Application Dates) Amendment Bill during the Committee stage. As we have heard clause 5 seeks to amend the principal Act the Prisoners’ and Victims’ Claims Act 2005—specifically sections 16 and 17—by replacing the words “30 June 2012” with “30 June 2013” and “1 July 2012” with “1 July 2013” so effectively extending a sunset clause. 
I think it is at this point that I would like to respond to comments raised by the Hon Phil Goff. He was surprised that the Green Party was opposing this bill. I thought I would just remind him that actually when the Green Party agreed to support the principal Act at the third reading it was uniquely because it was the lesser of two evils and it included a sunset clause. So it is not surprising that we would oppose this bill which is effectively extending that sunset clause. I believe that at the time it was because the Labour Government at the time did not have the numbers to pass this legislation unless it was going to be with the support of United Future which wanted to amend it in ways that we found very very troubling indeed because they would further threaten the rights of people in prison who had had their human rights breached. 
I do not quite follow the logic here that when there are two completely separate breaches of rights you would take the compensation for one and use it to rectify the other. When we have had a breach of rights that a prisoner is serving a sentence for his or her loss of liberty is a result of the breach of rights that resulted in whatever harm the victim has suffered. But the separate breach of rights—which in the case of  
Taunoa 
 and the behaviour management regime was quite a gross breach of rights on the part of the Crown unfortunately—is a separate breach of rights. So it is unclear why the compensation that the prisoner would be seeking for that breach of rights should be used then for the victim of the first breach of rights. In other words two wrongs do not make a right. 
So just to connect the dots on the relationship between prisoners not having an effective remedy and potential perverse incentives that could lead to increases in breaches of human rights in prisons if prisoners no longer have an incentive to seek compensation when there is a gross breach of rights they are less likely to seek compensation they are less likely to take a case and therefore the Crown is perhaps less liable for breaches of rights and more likely to be sloppy in its administration of justice because there will not be the incentive for it to look after the human rights of prisoners. And that is really fundamentally very very important. 
This bill is still part of this race to be tough on crime and support victims but it is unclear that this bill is going to do more than perpetuate a system that at best is ineffective and at worst creates perverse incentives for the mistreatment of prisoners. The Government’s plans including extending this deadline do not substantially create a better environment for victims of crime but do come at a heavy price to prisoners’ ability to realise an effective remedy for their own victimisation after they have started serving a sentence which was what the State decided was the price they would pay for the crimes that they committed against their victims. And victims do have the ability to seek remedy through taking a lawsuit if they believe they need additional financial compensation or in some cases they are able to have their needs met by ACC. That is a decision we have made as a society as to how we are best able to achieve justice. So for these reasons we disagree with the amendments to sections 16 and 17 of the principal Act. Thank you. 
DARIEN FENTON (Labour) 
: 
 I rise to take a very brief call on the Prisoners’ and Victims’ Claims (2012 Expiry and Application Dates) Amendment Bill. It has been very interesting listening to the debate because this bill is new to me. It has been very interesting listening to the Hon Phil Goff and Charles Chauvel explain the history of this bill and the background to it and also set out Labour’s position on this whole issue of compensation but also victims’ rights very clearly and I think very succinctly. 
The bill is about extending the restrictions on the award of compensation under the Prisoners’ and Victims’ Claims Act 2005 because they are due to expire on 1 July so it extends the deadline for one more year. It is a temporary measure and I do want to put on the record my unease about the pace that this has gone through the process. I understand the bill had its first reading on 2 May. It was a very short time frame for submissions. There were five submissions four of which were opposed to the bill for human rights concerns. 
I also understand that since the enactment of that legislation in 2005 there have been a low number of cases such as the one that triggered the original legislation. Labour believes that an inquiry into the legislation—and I am pleased to hear the Minister’s assurances about what will take place in the next year and to see whether it could be repealed or could be replaced with an alternative—is a good course of action. I hope that there will be a genuine look at the options around this bill. The Labour Party has made it clear that it supported the extension of the sunset clause only to ensure that if replacement legislation is required it can be developed. We do not think the need for replacement legislation has been made clear and a review of the claims under this legislation is required to ensure that the correct balance between compensation for breaches by the Crown and the need to remedy the victims is struck. So with those few words I am pleased to support this bill in its Committee stage. 
Le’aufa’amulia ASENATI LOLE-TAYLOR (NZ First) 
: 
 I am pleased to have the opportunity to speak on the Prisoners’ and Victims’ Claims (2012 Expiry and Application Dates) Amendment Bill on behalf of New Zealand First. It was Baroness Thatcher who once said that if you set out just to be liked you would be prepared to compromise on anything at any time and you would achieve nothing—absolutely nothing. One thing I know for sure is that New Zealand First is never going to be soft on crime. It is impossible to compromise in relation to serious crimes for the sake of being well liked. 
The intention behind this bill is to amend the Prisoners’ and Victims’ Claims Act 2005. I think I am more than qualified to talk about the experience that staff have to go through being someone who used to work at the Department of Corrections. The main purpose of the bill is to extend the boundaries around the awarding of compensation. According to the Minister of Justice’s own words in the first reading it ensures that “awards of financial compensation are made to prisoners only in extraordinary circumstances where no other remedy is deemed appropriate.” The bill also seeks to ensure that the victims’ claims process applies to any compensation awarded or to be paid pursuant to an out-of-court final settlement in respect of a prisoner’s claim made on or after 1 July 2012 but before 1 July 2013. This is all very well. However there is a balancing argument between prisoners as victims and as people who should be punished. Yes I acknowledge there is a need for practical rules to ensure that abuse of rights by prisoners is not possible. 
There is also a very strong criticism to be made about National wasting Parliament’s time with bills that could have been avoided with better prioritisation and fewer unnecessary bills on education and social welfare that the Government has introduced and we have spent so much time on. 
I would like to reiterate the view presented by my colleague Denis O’Rourke in the second reading. New Zealand First has no objection to the passage of this bill and supports it proceeding. The restrictions on the awarding of compensation simply defer the expiry date to 30 June 2013 while we await the substantive legislation namely the Prisoners’ and Victims’ Claims (Redirecting Prisoner Compensation) Amendment Bill which is yet to have its first reading—a bill that seeks to make the existing victims’ claims process permanent and to redirect any prisoners’ compensation remaining after that process to fund services and programmes for victims of crime. I cannot help wondering why there has been a delay by the Government of this review. Of course New Zealand First is reserving its position on the substantive bill and will consider the Government’s position when the bill is read. 
Prison sentences should be orientated towards rehabilitation to avoid reoffending. The issue is not who needs to be tougher on crime. We can no longer afford to argue with one another and participate in an ongoing law and order auction—no no no. Our aim should be to reduce crime. There is no point throwing someone into prison and throwing away the key when there are no active steps in place to ensure a reduction in recidivism especially when the prisoners are released back into our communities. 
There is also a need to restrict unnecessary claims by prisoners. Prisoners cannot and should not make claims to certain things that do not need claiming. However on the other hand prisoners are victims too. Prisoners should have their basic rights upheld—the rights to medical treatment and mental health care—knowing that they have already been deprived of their right to liberty and freedom. Recent studies that focus on punishment have told us that punishing prisoners by imprisonment does not achieve our overall goal of reducing crime rates in New Zealand. The National Government does not want to be seen as soft on prisoners either. But what about standing up and making sure that whatever steps this Government takes they should be steps to the goal of reducing crime rates and making New Zealand a safer place to live? 
Furthermore if the Government had dealt with its proposed bill earlier we might very well have been debating that bill today rather than this bill which simply extends the expiry date. The National Government should be getting its priorities right. Stop wasting our time. This bill could well have been avoided if we had not wasted time on other unnecessary paper-shuffling schemes from the social welfare Minister and debates about the education Minister’s misinformed ideas on class sizes. Efficiency is key for a working Government to operate well. On that note we support the extension of expiry dates as required in this bill. Thank you. 
Part 1 agreed to. 
Part 2 agreed to. 
Clause 1 agreed to. 
Clause 2 agreed to. 
Clause 3 agreed to. 
Bill reported without amendment. 
Report adopted. 
Extended Sittings 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 I move  
That the sitting of the House today be extended to consider the interrupted second reading of the Dairy Industry Restructuring Amendment Bill the debate on the performance and current operations of Crown entities public organisations and State enterprise and the passing of the Appropriation (2011/12 Supplementary Estimates) Bill and an Imprest Supply Bill 
. 
Motion agreed to. 
Dairy Industry Restructuring Amendment Bill 
Second Reading 
Debate resumed from 21 June. 
EUGENIE SAGE (Green) 
: 
 When the House adjourned I was explaining that Mr Ian McKelvie’s criticism of my colleague Steffan Browning was misplaced. Mr Browning was explaining why the Green Party opposed the Dairy Industry Restructuring Amendment Bill. It was not an attack on Fonterra. As our largest company Fonterra is important to our economy. We want it to flourish and we want it to be in the dairy business long term. What we have criticised is Fonterra’s current business strategy and the relentless increase in cow numbers and milk supply because that fails to recognise that there are environmental limits to growth given dairying’s serious impact on our waterways and on our climate. 
The result of yesterday’s vote on Trading Among Farmers was not an overwhelming mandate. The fact that one in three shareholders rejected Trading Among Farmers highlights the depth of concern about what this bill proposes. That is because for Fonterra the cooperative structure has been a huge part of its financial success. When the three main players in the industry—the New Zealand Dairy Group Kiwi Cooperative Dairies and the New Zealand Dairy Board—were merged in 2001 to create Fonterra there was a deliberate decision to establish it as a cooperative. That was seen as the best way of protecting farmer interests because in a cooperative you have effectively got an alignment between the interests of the supplying farmers the processing and the marketing arms of the company and the fiduciary duties of the directors so that the cooperative members receive the best possible price for the milk they their cows and nature produce. That has certainly been reflected in the higher dairy payouts. 
Providing for Trading Among Farmers cuts across this. It creates a significant risk for the future of New Zealand’s dairy farmers and for Fonterra because when a dairy farmer sells her units into the Trading Among Farmers fund she is selling her rights to the dividend and also the equity in the cooperative. While the farmer will certainly retain the mutual supply and collection contract with the company and voting rights he or she is giving up the stake that those shares represent in the financial ownership of the milk tankers the milk processing plant and other cooperative plant. That is where the risk lies. 
It risks introducing a tension between what the Hon Shane Jones has called the producer capital and the investor capital—those external investors who own the dividends from these unit shares—and as the independent adviser to the Primary Production Committee James Morrison noted in his report those tensions will inevitably arise between the farmer suppliers to Fonterra the external investors and the fiduciary duties of the board of Fonterra to those investors. So there is potentially going to be ongoing conflict between investors and the supplying farmers over the company’s strategy and the company’s operational decisions and there is a risk that over several decades the ownership of Fonterra and its key strategic decisions become increasingly separate from dairy farming. 
The stated purpose of these Trading Among Farmers shares is to provide a capital base to use as a buffer against redemption risk but submitters who oppose it said that that redemption risk had been overstated; it had been sold to farmers on the basis of one extreme year when we had the San Lu scandal drought and the global financial crisis. So those submitters and those who voted yesterday against Trading Among Farmers framed it as a choice between keeping Fonterra New Zealand - owned or making it a target for large-scale investors who would be more interested in the dividend returns from their shares. That is the risk—that this is the top of a slippery slope which will lead to more corporate investment and overseas investment which would weaken the voice and potentially overwhelm the farmer milk producers. That is why the Green Party opposes this bill. 
A party vote was called for on the question  
That the Dairy Industry Restructuring Amendment Bill be now read a second time. 
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 57 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1. 
Bill read a second time. 
Debate on Crown Entities Public Organisations and State Enterprises 
In Committee 
The CHAIRPERSON (Lindsay Tisch) 
: The House is in Committee for consideration of the performance in 2010-11 and current operation of Crown entities public organisations and State enterprises. I remind members that this is a 3-hour debate. The debates on the individual financial reviews should be relevant to their performance in the 2010-11 financial year and their current operations. I understand members have indicated organisations they wish to debate. The first entity that I understand members wish to debate is the New Zealand Tourism Board. 
New Zealand Tourism Board 
DAVID SHEARER (Leader of the Opposition) 
: 
 I would like to speak on the Tourism Board. Obviously this is an enormously important industry for New Zealand. In fact as a result of that what we understand is that the Prime Minister as the Minister of Tourism is head of tourism in New Zealand. I am not allowed to refer obviously to the—[ 
Interruption 
] Obviously for New Zealand tourism is massively important: $63 million a day. That is the revenue of this industry. It is on a par with the dairy industry. One in ten New Zealanders is employed in tourism throughout New Zealand. Therefore it is very important that we take this industry very very seriously. 
This is what John Key the Minister of Tourism said just 4 years ago: “While times are getting tough right now the future for tourism is bright. You are a vital part of the economic engine that drives New Zealand and you will be celebrated and encouraged by my Government.” This is what the  
State of the Tourism Sector 
2012 
 said in its report: “New Zealand is perceived to have fallen off the global radar as a desirable destination ...”. It is predicting a downturn. So although Mr Key 4 years ago had lots of aspirations for this industry 4 years later those aspirations are not being realised. I think what happened here is that Mr Key realised that this was a particularly good sector for a “smile and wave” approach but not really a sector where you actually have to roll up your sleeves get on to it and actually give this industry a real boost. So although it was said to be important 4 years ago today it has actually fallen off the radar. We have some real concerns and some grave concerns about where this industry is heading. 
However Mr Key did come up with a partial solution—a little bit like a partial asset float—to where this industry might get a boost from and that is from a convention centre in Auckland. The good news is that he has found an ingenious way of funding this particular convention centre. You give a wink and a nod to one of the applicants for this convention centre process. You slightly just push the tender process to one side you go out to dinner with Skycity and you say: “Look if you’re willing to put up some money for this we’ll guarantee you 20 years of a gambling licence and 500 pokie machines and you will be able to build this convention centre.” What a great offer. That is a great offer. It is a slightly sleazy offer. It is a bit of a shonky offer but what a great offer. For Skycity it is a great offer because it gets $42 million a year from those 500 pokie machines and it gets a 20-year extension to its gambling licence. In the space of 6 to 7 years it will pay for the convention centre and it will still have 13 years—times $42 million per year—to go on that extension to its gambling licence. That is a pretty good deal. 
Hon David Cunliffe 
: Plus interest. 
DAVID SHEARER 
: Plus interest on that. So there is the big plan for New Zealand tourism. Smile and wave on the one hand and on the other hand give Skycity the ability to raise $42 million a year with pokie machines from the pockets of people who can least afford them. And do not worry about those other industries and those other sectors that vied for the opportunity to do this. Do not worry about that! No no no we just go out to dinner have a wink and a nudge and you will get the deal. I guess that is why the Auditor-General decided to have a bit of a look at this. 
Hon Gerry Brownlee 
: Is that what they got out of you at the sky box for the Rugby World Cup? 
DAVID SHEARER 
: Well I tell you that is exactly why Skycity is looking with a smiling face at what is going on and it is why the Auditor-General is taking a good look at it. Mr Brownlee might well ask that. What did it get out of that? It got nothing out of it Mr Brownlee. It got absolutely no return on that particular investment. This party stands up for good process— 
CHRIS HIPKINS (Senior Whip—Labour) 
: 
 I raise a point of order Mr Chairperson. I understand that it has been custom in this Committee that the Minister responsible for the vote in question comes to the Chamber and takes the chair. 
The CHAIRPERSON (Lindsay Tisch) 
: No. 
CHRIS HIPKINS 
: And we advised the Government beforehand of the votes we wished to debate on that basis. 
The CHAIRPERSON (Lindsay Tisch) 
: I have heard your point. No any Minister can sit in the chair. If the Minister whose portfolio it is is in the Chamber they must take the chair but any Minister can assume the chair. I am calling Barbara Stewart. 
Chris Hipkins 
: Big chicken. 
The CHAIRPERSON (Lindsay Tisch) 
: Order! Who said that? You cannot say that. The member will withdraw and apologise for that comment. 
Chris Hipkins 
: I withdraw and apologise. 
BARBARA STEWART (NZ First) 
: 
 I rise to speak on behalf of New Zealand First to the financial review of the New Zealand Tourism Board. We all know that tourism is one of the largest industries in New Zealand. It accounts for almost 9 percent of our GDP and employs the equivalent of almost 180000 full-time positions for New Zealanders. As we heard previously the revenue is $63 million per day. 
However despite New Zealand priding itself on the basis of being a wonderful tourist destination we are actually slipping behind and it was mentioned in the weekend papers. The  
New Zealand Herald 
 headline was “NZ’s tourism cash cow is going dry says report”. So something definitely needs to happen. We know that tourists are not coming here as frequently as they previously did. The figures between April and May show a 1 percent decrease in the number of tourists who are actually visiting New Zealand—not good. The numbers of tourists from Australia Britain Germany and the US have all fallen in the last year. All of these tourists who always saw New Zealand as a wonderful destination are now suddenly not so sure. We are not seen now as a must-see destination which is where we actually should be. 
We cannot use the global financial crisis as a scapegoat for this industry’s poor performance. In reality the problem is far more complex. Australia Britain Germany and the US—they are all doing well to get through this financial crisis. We know that Germany is the powerhouse of Europe. The Australian economy is growing at one of the fastest rates in the Western World. Tourism in New Zealand is actually lagging due to a lack of advocacy. With the Prime Minister holding the tourism portfolio who would have thought that this would be the case? It comes down to a lack of advocacy and it is basically costing New Zealand employers and employees alike. 
Remember last year when the UK decided to increase its departure tax to New Zealand? The tourism Minister John Key took great offence at that. He said he would be having stern words with his mate Prime Minister David Cameron over in the UK. What came of these discussions? We know that departure taxes in the UK are still extremely high. The Minister of Tourism has basically failed to get these down to a level that is in our favour. He has failed to make good his word to actually do that. It is little wonder that the number of tourists from the UK is down. 
And it is the same again with Australia. Every day in the media we hear about the huge economic boom over the Ditch. We see our young people queuing in the departure lounges eager to find their brighter futures over the Ditch and unfortunately my young son is one of them. Yet despite the promising job opportunities in Australia tourist numbers from that thriving country are also down. Just over a month ago the Australian Government decided to put up the departure taxes to New Zealand by 17 percent. 
Todd McClay 
: That’s shocking. 
BARBARA STEWART 
: It is shocking. The tourism industry had been lobbying John Key and this Government to intervene. It knows that these extra taxes are going to hurt its industry. It knows that these extra taxes are going to hurt both employers and employees but nothing has happened—absolutely nothing. 
And of course the other reason that tourists are being put off is the high New Zealand dollar overseas. New Zealand First has been calling on the Government to extend— 
The CHAIRPERSON (Lindsay Tisch) 
: I am sorry to interrupt the honourable member. The time has come for the dinner break. This debate is interrupted. I shall resume the Chair at 7.30. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
BARBARA STEWART 
: What we are saying here in New Zealand First is that the other reason that is putting off our overseas tourists is the high New Zealand dollar. We have been calling on the Government to extend the powers of the Reserve Bank in order to better control our overvalued currency. The IMF estimates that the currency is between 10 and 20 percent overvalued and every day that it remains overvalued it actually puts unnecessary pressure upon our tourism industry. 
If we are going to take a stand and restore New Zealand to its top position as a really top tourist destination we need strong leadership in this area we need decent advocacy on the international stage by the Minister of Tourism and we need sound policies that will actually ensure that our tourists return. We cannot afford to fall off the global radar as a desirable destination and headlines in the “Business Day” section like “NZ tourism industry suffers”— 
GRANT ROBERTSON (Deputy Leader—Labour) 
: 
 We are looking at the New Zealand Tourism Board’s performance and the report of the Commerce Committee on that. It is quite clear when we look back to the heady days after the 2008 election when the Prime Minister became the Minister of Tourism. He talked of a bold plan for tourism in New Zealand and a clear vision for tourism and said that we should make the most of our advantages and seize the opportunities they provide. Yet what we see from the  
State of the Tourism Sector 2012 
 report and from the Tourism Board’s own statement of intent is an industry that is stagnating. It is an industry that is simply no longer providing the boost to New Zealand’s economy that it once did. But this was of course the very reason the Prime Minister told us he wanted to take the portfolio on—that he would be this great leader to drive the tourism industry forward. Instead all we got were cheesy jokes on  
The 
Late Show with David Letterman 
 and a bad video in the back of a car in Napier. That was about the extent of the vision—the bold plan—that the tourism Minister John Key was going to bring forward to us. 
Then we got a new plan for tourism for New Zealand in this last financial year which is currently ongoing—the building of a convention centre in Auckland. This was the great blueprint the great vision that would provide New Zealand’s tourism boost. There are probably some good arguments for a convention centre in the Auckland area but a convention centre built on what basis? The Prime Minister responded with a top 10 list as he did on the Letterman show. So in terms of tourism and its future for New Zealand I think we could make a top 10 list of reasons why the Skycity pokie deal for the convention centre is in fact not the way forward for New Zealand. 
Reason No. 1 on our top 10 list is that the Problem Gambling Foundation says that Skycity’s “host responsibility is poor and fuels problem gambling”. The casino had 54 incidents of deserted children last year 25 cases of fraud and 14 assaults. So there is reason No. 1 on our top 10 list. 
We can go on. Goldman Sachs has estimated that Skycity will earn an extra $28 million a year on the additional pokie machines that are part of the deal rising to $42 million a year once the convention centre is running. That is the pay-off here. The legislation gets sold off. That is reason No. 2 for us to not like this deal for supposed tourism. 
Another one is the question of how many jobs will be created. The Prime Minister was very keen to tell us that there would be 1000 jobs in the tourism industry—1000 jobs. He overstated by more than half. That is reason No. 3. 
I will go back to the gambling side of things. Casinos return only 2.5 percent of their profits to the community—2.5 percent. So for extra machines going in—supposedly to bolster the tourism industry—the pay-off is more pokie machines and the pay-off of that is money out of the pockets of people who cannot afford it with only 2.5 percent going back to the community. 
We can go on. Reason No. 5 is that based on Goldman Sachs’ estimates there could be a loss of revenue for community organisations from anywhere from $10 million a year upwards. That is the outcome of selling off legislation that is supposedly to benefit tourism in New Zealand but is actually to benefit Skycity. We can go on. 
Reason No. 6 for this not being a good idea is the dodgy way this deal was done and the fact that the Minister of Tourism intervened in a process that was part-way through and said: “Forget all the other bidders. I’ve done the deal over dinner.” So there is reason No. 6 for us. 
Reason No. 7 is that the other bids that were on the table from people like Lloyd Morrison—rest his soul—were bids that did not require the selling off of legislation for New Zealand. That is another reason. 
Reason No. 8 around this is that Mr John Key the Minister of Tourism has told New Zealanders that it is OK to sell off legislation and that that should be part of the deal of being in Government. It is just plain wrong to have that kind of approach to funding tourism in New Zealand. 
This Government knows that this convention deal is a dodgy one. It is one where the Minister of Tourism the Prime Minister John Key has intervened in a process and allowed a non-complying bid to go forward. We now see the situation where we have a dodgy deal that will not do what it says it will do for jobs and will not do as it says it will do for tourism. 
Report noted. 
Reserve Bank of New Zealand 
TODD McCLAY (National—Rotorua) 
: 
 I wish to rise to speak on the Reserve Bank of New Zealand financial review undertaken by the Finance and Expenditure Committee the extremely hard-working and diligent committee that it is. I want to make a couple of general comments around the work of the Reserve Bank particularly the focus the Government has had over the last 3½ years but particularly what has happened since the election and in particular also I would also like to make mention of the current Governor of the Reserve Bank and the announcement made by the Minister of Finance today about the future appointment. 
What has happened since the election and what work has the Reserve Bank been focusing on? Well the Government is getting its books back into order and setting a path back toward surplus. This is extremely important for the Government. We campaigned on this. But more so than that it is important for everyday New Zealanders. You see not so long ago the Governor of the Reserve Bank made an announcement that he would be keeping the interest rates in New Zealand at a steady rate—one of the lowest we have seen in many many years. This is great news for New Zealanders as we look around the world at the many challenges that countries are facing with their economies and with Governments that are not as single-mindedly focused as this Government is on doing the right thing for New Zealanders and the economy while there is great havoc being wreaked all over the place. We see it every day in Greece and other parts of Europe and so on. 
But the good news about where our interests rates sit at the moment is that mum and dad New Zealanders are paying much less for the money they have borrowed to invest in property and other things than they were 3½ to 4 years ago. I remember at the time returning to New Zealand having spent some time overseas as many Kiwis do and deciding to come back here and stand up and do my part on behalf of other New Zealanders because I was so very concerned at the direction New Zealand was heading in after 9 years of a Labour Government. The first thing I did with my wife and my family was to go and look to purchase a property. We went to the bank to find out what the interest rate would be and it was over 9 percent—over 9 percent. The member opposite has said “What about jobs?”. Well when hard-working Kiwis have to pay mortgages and their interest rates are over 9 percent actually it is no wonder it is so difficult for them and they find it so tough to get by. Today the interest rates are set around 5 percent if you want to go and borrow and what a great difference that makes. So very much reducing debt focusing on Government spending and making sure that the money that the Government spends on behalf of taxpayers is spent productively and for the very best return for those taxpayers is something that the Government is focused on 
 Of course we know that the Government books are set to move back towards surplus in 2014-15. This is going to be a very difficult job for us to deliver on. The reason for that is that there are all sorts of uncertainties in other parts of the world which of course will have an impact upon us as a trading nation. But the most important thing we can do here is to continue the work that we have done over the last 3 years so that New Zealanders so that businesses so that the Governor of the Reserve Bank and so that our country can have confidence that the Government is on the right track is moving forward and is taking sound financial management practices extremely seriously in the economy and so that they too can have confidence in the direction that we are moving in. 
We had an announcement last week around some of these statistics and it took many by surprise—increased growth rates. The quarter’s increase of the gross domestic product was 1.1 percent. It took the annual growth to 2.4 percent compared with March 2011. It is very difficult for the world’s economy at the moment. In fact I think we are probably second maybe third in the world when it comes to growth at the moment. Although that is modest growth it is better than what was forecast and again I think this shows that New Zealand is slowly but surely moving towards a stronger footing. I would say that I think that this could be patchy as we move forward because these things do go up and down a little bit. But certainly this is to be welcomed it is welcome news and I encourage other members of the House to get out and encourage New Zealanders to get on with their lives to do their jobs to run their businesses and together we can slowly move forward. 
So what I want to say here is that I want to recognise the Reserve Bank governor Alan Bollard for doing a fantastic job for a number of years. He can be very proud of some of the decisions he has taken and the way that we have been able to work as a Government in line with him. He has a done a very good job in these areas— 
Report noted. 
New Zealand Transport Agency 
JULIE ANNE GENTER (Green) 
: 
 I am very happy to take this very quick call to discuss the financial performance of the New Zealand Transport Agency. This is an agency that was a client of mine for many years when I was a transport consultant. I had the privilege of working on a number of research projects for the New Zealand Transport Agency. 
I am happy to say that there are some very hard-working and talented people working there but I would really like to raise a number of concerns. There is a problem with a lack of transparency about what the New Zealand Transport Agency is doing. As I understand it it is probably mostly around the massive expensive motorway projects that the Government is prioritising—the so-called roads of national significance. When we try to find out information about these projects the Transport Agency is very unwilling to share information like for example the updated costs and benefits for them. I asked the Minister of Transport some written questions recently and unfortunately he was not able to return them on time. And even when he did return them we saw that there were increased costs for example for the Wellington Northern Corridor road of national significance. That was initially estimated to be $2.1 billion to $2.4 billion and is now revised to $2.4 billion to $2.7 billion. There has been no update to the benefit-cost ratio. As far as I can tell there has been no update to the benefits so necessarily that project would have an even worse benefit-cost ratio than what it had before which was only over 1 because of some very creative accounting. 
I have heard from inside the organisation that there is a very machiavellian approach to project management and to public relations. They have a very proactive approach of identifying the stakeholders who are asking for information and then deciding to give information to certain stakeholders based on whether they think there is any sort of risk that there would be a media story. 
I think that it is clear from the Cabinet papers that the agency is facing a very tight funding situation. We have asked the agency about this in the financial review and it sort of wanted to sweep it under the rug saying: “Oh no there’s no problem here there’s no problem with funding.” But actually there is significantly less money coming in and that is totally understandable. We foresaw this in 2008 when we did the research report  
Managing transport challenges when oil prices rise 
. We said what was going to happen was that as oil prices rise households which do not have any opportunity to switch to other modes because we had not sufficiently invested in them would have to spend more money on transport. In the first instance they would cut some of their discretionary trips and in the second instance they would have less money to spend on goods in New Zealand in the economy. What happens after that is that 6 months later we see this beautiful lag and suddenly there is a reduction in demand for heavy vehicles because the freight industry takes a hit when households have to spend more money on petrol so then there is less demand for freight. What happens is that there is reduced demand for vehicle trips on the State highway there is less money coming in through road-user charges and petrol taxes and therefore there is less money to spend. But unfortunately the Government is still going ahead with these road projects of supposedly national significance. 
What we have been trying to find out from both the New Zealand Transport Agency and the Government is where the evidence is that these projects will have the desired positive impact on the economy. We are not ideologically opposed to roads or vehicle-based transport but we are asking why we should spend 75 percent of the money for new infrastructure on six very expensive projects when there might be more cost-effective ways to reduce travel times and to meet the needs for travel that the New Zealand Transport Agency is tasked with. We have heard in the House from the Minister of Finance the Hon Bill English that in fact there is no evidence that these are actually political projects. 
It is a very big problem because I think that New Zealanders expect to be able to get information to be able to participate in the assessment of these projects. And we cannot have proper scrutiny in the public sphere or in Parliament if the New Zealand Transport Agency is operating behind this cloak of secrecy and trying not to tell us any information because it does not support the narrative that the Government wants to tell which is that it is investing in productive infrastructure. We just want to help out really. The Green Party is interested in making intelligent choices in terms of how we invest in transport infrastructure and to do that we really need to understand why these projects are being prioritised as opposed to other projects. Also when we try to question the New Zealand Transport Agency on its—[ 
Bell rung 
] I will wrap this up right this second— 
The CHAIRPERSON (Eric Roy) 
: You have wrapped up. Your time has expired—your time has expired. Please sit. 
Report noted. 
Earthquake Commission 
DENIS O’ROURKE (NZ First) 
: 
 For the first time in a very long period of time the performance of the Earthquake Commission has been tested with the various Christchurch earthquakes. Of course Kiwis have been paying their earthquake levies for all of that very long time and obviously have a right to expect excellent performance by the commission. I am afraid to say that many people in Christchurch and I mean especially those who are actually affected by the earthquake are not in fact satisfied with the performance of the commission and I am one of them. Firstly this is because I think one of the problems is the definition of the liability for which the Earthquake Commission is liable. Secondly I think it is because of an initial lack of experience with earthquakes and how to deal with them although that has improved since. Thirdly it is because of the way the commission has addressed these claims and fourthly because of the concern over some of the commission’s internal practices. 
On the first of those issues the scope of liability the Earthquake Commission did attend to claims for contents within the first year quite adequately I feel. So the question really is: should the Earthquake Commission actually have to deal with claims for contents or should it be liable only for property? I think that is something that needs to be addressed in the relatively near future in case such an event happens again. I do not think that the commission should have to deal with contents claims. They are mostly covered by insurance. The contents damage causes inconvenience but not the loss of a place to live. It causes delays in the reinstatement of houses because the commission’s time and effort has to be taken up with contents claims and of course it has got the capacity to exhaust or certainly reduce the size of the resources that the commission has. So that is an issue for the future. 
But on the second issue the lack of initial experience I did feel that the Earthquake Commission was not properly prepared for the event that happened at the magnitude it happened. The commission did not have the people it needed it did not act fast enough it was very bureaucratic in its procedures and it constantly inspected things and did not do very much on the ground. So hopefully the commission learnt from that and will improve in the future. 
On the third issue I mentioned it has taken in fact far too long for the commission to attend to the repair or replacement of damaged homes. There have been multiple inspections as I said and too little action. Well after a year since the February earthquake thousands of people still live in seriously damaged homes and unrepaired homes. Many live elsewhere and cannot afford to do so. These are properties in the green zone. Many need to be replaced and many still have to be demolished. 
I realise that the numbers of claims are extremely high and that tens of thousands have in fact been attended to. But that is no comfort to the thousands whose claims have not yet been actioned this long—almost 1½ years—after the February earthquake. So the question really is: why is that? I feel that one problem has been the employment only of Fletcher’s as the sole provider. I think perhaps it would have been better to consider others as well. I think a monopoly may have created something of a lack of competition for good results and of course more resources should mean speedier attention. Overall progress has been too slow and it really needs to be better. So that is another lesson for the future. 
The fourth and final issue I raised was some concerns that people have expressed and I think with justification over some of the internal practices. Initially it did appear that there were conflicts of interest between some of the staff of the commission and the commission itself. I do note that the commission imposed a self-imposed review of that and this went some way to solve some of the problems. However suspicion still exists out there about some of the internal practices like that. So the conclusion that I am afraid I have to draw is that the performance of the Earthquake Commission was not as good as it should have been and of course it has never been tested as I said at the beginning. In trying to meet that test I do not feel it reached the standard we would require but I do not want to say that it has been a complete failure because it has not. The commission has done a lot of good work and I want to pay particular regard and acknowledgment to the people who have been employed by it. 
NICKY WAGNER (National—Christchurch Central) 
: 
 It is my pleasure to talk about the Earthquake Commission—EQC—in this Crown entities debate. The people of Christchurch and Canterbury have got to know the Earthquake Commission well over the last 16 months and the commission is the organisation that we love to hate. We love to hate it but actually just a little bit of reflection would tell us how very fortunate we are that it exists. 
New Zealanders are heavily insured. Possibly about 99 percent of them have their homes insured and this is a unique situation. Across the world particularly in earthquake-prone regions due to cost most people are uninsured. We look at places like the US which is a country very similar to us but in those areas like San Francisco that are earthquake-prone only about 15 percent of people have their homes insured—only about 15 percent. It is similar in Japan. It is because of the Earthquake Commission this Crown entity that virtually all New Zealanders have insurance. Let me explain a little bit about that. 
The Earthquake Commission was set up in 1933 after the Napier earthquake and it was set up to protect homeowners. It was set up to insure homes contents and land. “And land” is particularly interesting because we are one of the very few countries in the world that insures land. 
Hon Gerry Brownlee 
: The only one. 
NICKY WAGNER 
: We are the only country in the world that insures land. Really what it was was a Government safety net for insurance at a low cost. That low-cost insurance continues today. It is actually what the commission has activated by a levy on your main insurance premium. The Earthquake Commission takes the first $100000 risk. This keeps the major premiums down. This means that insurance in New Zealand is cheaper and available to all and hence we have that great cover. 
What this means is that Christchurch and Canterbury have a real opportunity to rebuild safer better high-quality housing and mostly out of insurance. There may be a little bit of a gap but this is an exceptional situation simply because of the Earthquake Commission. In comparison with recovery scenarios in other countries we are incredibly fortunate. There have been about 600000 claims to the commission over the last 11000 earthquakes. Those claim expenses totalled $11.4 billion in 2010-11 and that left the commission with a net deficit of $7.1 billion for the year ended June 2011. The Natural Disaster Fund was at $5.9 billion pre-earthquake with another $2.5 billion available for global reinsurance. That fund has now closed with a deficit of $1.2 billion. So what we are seeing here is that the Earthquake Commission’s liabilities exceeded its assets in 2011. But that is the way the commission is organised and the Crown has committed to meet that shortfall. The Crown has committed to meet it under section 16 of the Earthquake Commission Act 1993. So because of the Earthquake Commission people who have insurance have no need to worry that they will not be paid out. 
We all know that 2010-11 was an exceptional year for the commission. Both the September and February earthquakes came in the top five insurance claim situations in the globe. They are enormous claims. The Earthquake Commission is expecting to remediate land and to repair and cover contents for over 100000 homes. I believe that it has made significant progress. It has paid out $3 billion already and that is 10 percent of Canterbury’s GDP. So it has been a big shot in the arm and it has kept our economy going. It is averaging $37 million a week. It has repaired 15000 homes and to give you an idea about what that looks like that is the number of houses that are in Timaru. The commission has repaired the equivalent of Timaru and we have got about 35000 houses still coming through the process. We have got a long way to go and many people are tired and frustrated. But I think it is because of the Earthquake Commission that New Zealanders are insured. Because the commission takes that first $100000 risk we know that our houses will be repaired. We know that in the long term— 
Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery) 
: 
 I just want to make a couple of comments mainly in response to some of the offerings this evening from Denis O’Rourke a new member of Parliament for New Zealand First. I appreciate that he wanted to say that EQC the Earthquake Commission had sort of done OK but he could not give it a full pass mark. I think one of the interesting things is that since its modern inception in 1994 where it followed on from the Earthquake and War Damage Commission the Earthquake Commission has come up for review repeatedly in the House and MPs from all sides of the House have quietly let it slide through without too much attention. It is not until you have a big disaster like this that an organisation like that becomes tested. 
As the previous speaker Nicky Wagner said it is dealing with some 680000 claims. Those are each individual exposure across the land damage the built-property damage and the contents. When you aggregate those per household it is still over 400000 household claims. It is huge. There is no other insurance company in the world that has ever dealt with anything quite so big from one event. The only one that comes close is State Farm an insurer in the United States that dealt with the very big claims that came out of the Hurricane Katrina event some years ago. The difference though between the Earthquake Commission and State Farm in the United States was that the Earthquake Commission had a staff of 21 people on the day of the 4 September earthquake in Christchurch; State Farm had a standing staff of over 77000 when it dealt with its big hurricane event in the United States. So from 21 people dealing with the huge number of rolling claims coming through it has gone up to I think round about 1200 people now. So it is still a pretty lean machine. It has tried to do as much by contract as it can because we do not expect to have these events occur with the sort of regularity that would justify a staff of some 77000 as was the case with its counterpart in the United States. So I think it has done a pretty good job. 
It is often forgotten that we have had a series of earthquakes there. There have been over 11000 shakes in total over 2000 shakes that have been of a very substantial nature and five events that have been of such a magnitude that they have triggered a series of Earthquake Commission claims from those events. As the previous speaker said it has repaired through the project management office 16000 homes now and at any one time there are 2000 homes in Christchurch under repair. 
I noted the comment from Mr O’Rourke where he said that there were some homes that needed to be demolished and rebuilt. The Earthquake Commission does none of those. Once you go over the $100000 cap it is in the hands of the private insurers. So the Earthquake Commission is dealing with those repairs under $100000 and over $10000. The idea is simply that we will be able to put a brand on those repairs that will see the value of the real estate that is repaired maintained through the years ahead. Had we been in a situation where the Earthquake Commission simply cashed up those who have got damage firstly you are relying very much on the Earthquake Commission assessor getting it right first time—there is no second opinion. But under the project management office arrangement when the builder turns up to do the work he does the work. I think that is a very important distinction. 
The other thing is that the Earthquake Commission does cover land damage and that is totally unique in the world. I think it is a great thing that we have got it and we must do whatever we can to preserve it because it has allowed us to put together a programme to do the proper geological survey that is required of many many parts of Canterbury to determine where the best areas are—or the appropriate areas are—for residential occupation. It is that process that allowed us to be able to say sadly to about 9000 households: “You need to move on because where you are living is no longer suitable for residential occupation. The crust under your house has thinned. The depth to bearing is now a long way below you. You may have slumped. The land may have moved’’—in some areas in Christchurch it has dropped by up to 1.8 metres—“and it is ideal that you do look for some other opportunity for your residential occupation.” We came up with the two offers that have gone out to people and people can choose one of those: either deal with your private insurer or sell the land to the Government and the Government will then negotiate with the Earthquake Commission about what the repair payment might be. There will be a very large net cost in this whole thing to the Crown; there is no question about that. 
But to go back to my key point without the Earthquake Commission we would have had no basis to start a land assessment and no basis in fact to engage with the private insurers about where the liability stopped and started. There is a bit of concern out there at the moment over apportionment and continuity of assessment methods for damage. They are being worked through in a constructive way. None of this is easy. If it was it would have all been fixed quite some time ago. But anyone who comes to Christchurch will see the huge amount of effort that is going in down there. I am not going to stand here and say that everything is perfect with the Earthquake Commission but by the same token I cannot accept that we should determine in this process that it has come anywhere near a position that would say it has done less than its best. I think it has done very very well in difficult circumstances. 
The payments that are being made into the local economy through the Earthquake Commission are no doubt contributing to some of the very good and positive figures that we are seeing around population stability and around the local economic growth as well. That will continue for a few years to come. We are just seeing the thin end of the wedge of what will eventually be invested in Canterbury in the rebuild. That simply puts an onus on all of us to ensure that there is sufficient economic activity coming in behind that big rebuild over the next decade to ensure that the prosperity in that province continues and that is certainly a commitment that I make. 
There was mention made of the Natural Disaster Fund and how it is somewhat depleted at the present time. Some people have proposed a levy on people’s earnings to try to top it up. The reality is that it takes many many years to build up a fund of $5 billion. A Government of course is always in the sovereign position of being able to strike a levy or strike a tax if it thinks that is appropriate. Our strong view is that it is not required at the present time and that we can stand as guarantor behind the scheme. One of the positive things I can report is that when the Earthquake Commission went into the reinsurance market recently to buy cover for the exposures that it has to prepare for going forward it was able to get that cover and the terms were reasonable given the circumstances. 
I want to conclude by just saying that as a major player in the home insurance industry in New Zealand the Earthquake Commission performs an exceptional service. If the $100000 cap is too low it is because this House has allowed it to stay at that level for the last 18 or 19 years. At some point we will need to look at it. I want to acknowledge that Mr O’Rourke has raised the good issue about whether the Earthquake Commission should continue to cover contents. Well I think that in the difficult insurance market at the present time you would not want to be mandating from this House a lack of cover or a withdrawal of cover for the whole of New Zealand. So there is going to be a transition period that will come after we have had the review of the Earthquake Commission which should commence later this year. 
I think that in very difficult circumstances this organisation has served the country well. I know that there will be people who listen to this who perhaps want to scoff at it but really I think the question is: how could it have been done better? There was no way that you could have had a standing army of 10000 15000 or 20000 people hanging around waiting for the day that there was the big one somewhere in New Zealand to go in there and fix it. When you are dealing with the sorts of volumes that it is dealing with there will always be ups and downs. There is no question about that. But overall it has done a very very good job. I think it does deserve a commendation from the House. Also just a little note that all of us as members of Parliament—particularly those of us from Canterbury who are also I might say in most cases claimants—will be watching that progress over the next however long it takes to get the job done with the intention of ensuring that it is done to the very highest quality. 
Report noted. 
Accident Compensation Corporation 
GRANT ROBERTSON (Deputy Leader—Labour) 
: 
 It is hard to think of a Crown entity or a public organisation or a State-owned enterprise that we are looking into tonight that is in a worse state than the Accident Compensation Corporation and the fault for that lies entirely at the feet of this Government. That is where it lies. An organisation with a proud history has been turned into a shambles inside 3½ years by this Government. The core principles of ACC—prevention treatment and rehabilitation—have been replaced with scandal sleaze stuff-ups and a culture of disentitlement and that is what we are seeing from this Government. From day one it has sought to undermine ACC to ensure that it is not providing the service that New Zealanders would expect of it and to ready it up for the privatisation plans that we know that the Government has. 
It would be easy when looking at ACC to gloss over some of the matters that are not the scandal and are not the sleaze—I will return to those shortly—but what I want to mention now right off the bat is that in the report of the Transport and Industrial Relations Committee we see the heart of what this Government is actually doing to ACC. The committee chose to comment on the increase in the number of decisions going to review. There were 5193 decisions that went to review in 2007-08. That increased to 9271 in 2010-11—nearly double. 
Hon Trevor Mallard 
: That’s a scandal in itself. 
GRANT ROBERTSON 
: It is a scandal in itself. But it gets worse. The increase in decisions overturned at review or on appeal went up from 900 in 2007-08 to a staggering 2288 in 2010-11. That is what is really going on inside ACC. That is what is there. That culture of disentitlement was brought in by the former Minister for ACC Nick Smith actually deliberately targeting a situation whereby people would have their entitlements taken away. More and more decisions were going to review because ACC was working harder and harder to make sure people did not get what they were entitled to. But it is far far worse than that because in fact what we now know is that the Government pays ACC staff bonuses to get people off the books. That is why things are going to review. It is because people who are entitled to expect that ACC would be there for them are being pushed off it as part of an active campaign by this Government. So do not underestimate at any point the desire of this Government to undermine ACC as a public entity because the agenda is very clear. 
There is one good thing—there is only one good thing—from the stuff-ups scandal and sleaze that have bedevilled ACC. It is that the process of opening up the work account to competition is being delayed. That is the one thing that is good. But make no mistake this Government did it last time in the 1990s and it will do it again. It wants to privatise this organisation. This process of deliberately undermining the organisation of ensuring that people do not get what they are entitled to of seeing more cases go to review and more cases overturned on appeal because the basis of the ACC decision was wrong is the culture that National has been developing in ACC. The Minister for ACC talks about a culture change. Well the culture change that she wants is a culture of privatisation. We on this side of the House would like to see a culture change that actually sees ACC get back to its core business of prevention of treatment of rehabilitation and of making sure that it is the organisation that New Zealanders should be proud of. 
But there is absolutely no way New Zealanders can be proud of an organisation whose main contact points in the last few months have been the police the Privacy Commissioner and the Auditor-General. That is what most of the work going on in ACC is about at the moment—trying to manage the scandals and the stuff-ups and the sleaze. It is simply unacceptable to this day that such a large privacy breach could take place in an organisation like ACC and what followed from that was a disgrace. It was a farce actually but it was also a disgrace because this organisation—once proud—found itself mired in a huge breach of privacy Ministers going and a police inquiry at the end of which we saw the chair the chief executive and board members leave. This is a Crown entity in chaos. It is a shambles. It has been poorly managed from day one of this Government by Ministers Nick Smith and Judith Collins. So mired in the scandal and the sleaze are they that they have completely taken their eye off the ball of this organisation. 
MICHAEL WOODHOUSE (National) 
: 
 There are many things that National Governments can be proud of and ACC counts among them. ACC is an organisation that was established under a royal commission set up by a National Government. It was set up by the Holyoake Government passed into law by Jack Marshall’s Government and maintained over 40 years by the National Government. 
I find it really really tiresome to have to continue to remind this House why it is that every time National comes back to office it has to tidy up the mess left by Labour. The one thing we have not heard from members of the former Labour Government is the simple word “sorry”. Maryan Street is there; she has the opportunity. She put her signature on a financial loss of $2.4 billion and oversaw 6 months of a $4.8 billion loss. I will do many things—and I certainly regret the fact that there was information leaked on several thousand claimants—but I will not apologise for this Government’s management of ACC. 
Let me tell you why. When the Bolger Government came to office in the early 1990s I wonder whether you know how many long-term claimants there were on the books at ACC. I can tell you that there were nearly 27500—27500. It was under a National Government that ACC implemented the case management model that not only is enduring today but is being picked up by social agencies and other insurance companies around the world. The impact of that was profound because at its core the very first thing ACC is required to do is prevent injuries then treat them and then compensate for them. But the most important part of that equation is the rehabilitation model and rehabilitation when it works involves people exiting the scheme. I think a reduction in the number of people who are long-term ACC claimants is a heck of a good thing. When we came in in the mid-1990s with long-term claimants at 27500 the case management model was successful in reducing that number down in the late 1990s to about 14000. And then claims continued to reduce. But under the Labour Government by how many were long-term claimants reduced? None. They went back up by about 1000. There were 100000 fewer claims— 
Jacqui Dean 
: How can that be? 
MICHAEL WOODHOUSE 
: —and 1000 extra long-term claimants. I can tell you how that can be. It is because under Labour ACC was left to take its eye off the rehabilitation ball—a come one come all approach. 
There is one thing that Mr Robertson did not mention—and that no Labour member when discussing ACC has ever mentioned—and that is the other stakeholders in ACC. Because it is not only about the claimants; the important thing is that the scheme is affordable. In the late 1990s it was absolutely apparent that with the growing numbers of long-term claimants the scheme could not be sustained in the model that it was in. The full funding model was put in place and the Labour Government had 9 years to change the full funding model and did not. 
But I will tell members what the Labour Government did do. It allowed rehabilitation rates to drop. This is very important because every 1 percent drop in rehabilitation rates over a 12-month period costs the scheme half a billion dollars. The rehabilitation rates under Labour went down and down and down and the long-term tail went up and up and up. I make no apology for the former Minister for ACC Nick Smith and the present Minister Judith Collins being very clear about the importance of rehabilitation not just for the claimants but also for the levy payers. And let us be very clear about that. Any softening of that approach is not only bad for the levy payers but very bad for the claimants. We should not be afraid to talk about rehabilitation with somebody even somebody who has been out of work for 12 months—and there are difficulties in rehabilitating claimants who have been out of work for a time. 
I congratulate the case managers on the work that they do. If 15 percent—a small proportion—of their remuneration is based on rehabilitation rates why should we apologise for that? Eighty-five percent of their performance is based on other factors including I am quite sure claimant satisfaction. A very small proportion of it is for doing what the law requires them to do and that is to rehabilitate claimants in a fair and timely manner. This Government is going to make no apologies for that. 
Yes there is work to do in ACC and I look forward to that work being well managed by the Minister Judith Collins but I make no apologies— 
ANDREW LITTLE (Labour) 
: 
 There is no question: ACC is in crisis. It is in the deepest crisis it has ever been in and I suspect it is the deepest crisis that any Government agency or department has been in for decades and decades. It is probably unprecedented in the history of the New Zealand public sector with perhaps the exception of the New Zealand Tourism Board under Bryan Mogridge but that is a different story. 
That address we have just heard from the member Michael Woodhouse just frankly defies credulity. There is no question that people who have been on ACC legitimately properly—trying to be rehabilitated entitled to compensation and entitled to treatment—have been pushed off it when there are no grounds to do so. They have been pushed off it not because they are rehabilitated not because they are capable of returning to independent living and being without support not because they are ready to go back to their old job but because this Government introduced an incentive scheme to claims managers and the management of ACC to push those people off to make the figures look good and the bottom line look better. Under this Government ACC has lurched away—lurched in a direction far removed—from its founding principles. Those principles are community responsibility proper rehabilitation and injury prevention. 
We now know how this crisis has unfolded. It started with Nick Smith’s declaration of a crisis in 2009—a financial crisis that did not exist. It did not matter that ACC was generating surpluses— 
Hon Anne Tolley 
: It did exist. Outrageous! 
Jonathan Young 
: Of course it existed. Tell that to the levy payers! 
ANDREW LITTLE 
: —of a billion dollars a year Ms Tolley. It did not matter Mr Young that it had reserves then of $11 billion—now of about $18 billion. So National declared the crisis. It hiked levies totally unnecessarily. What we now know from the most recent media reports is that there was a crook deal done between Nick Smith and the management of ACC to set up incentives to drive long-term claimants off ACC. Let us be under no illusion. What ACC has done in the last 3½ years has been done at the direction and directive of this Government. It is totally the political decision and directions of this Government that have driven ACC. I say to those who want to exculpate the present Minister and the previous Minister for ACC that they miss the point completely. ACC has acted in accordance with the instructions of its political masters and we should not let those political masters off the hook whether it is Nick Smith or Judith Collins. And those who are looking to the present political masters and the present Minister for a solution to the current problems are looking in the wrong place. I make no apology for saying that. 
Let us see what happened under this great regime. The surpluses at around 2008 were about a billion dollars a year. Last year they were $3.5 billion. The reserves are now at $18 billion to $19 billion. But the price of that has been paid by the claimants—the long-term claimants. They have been subject to a brutal managerialism that has taken over ACC. The number of long-term claimants has gone down 25 percent in 3 years. What on earth logic applies there—that in 3 years a quarter of your long-term claimants are miraculously rehabilitated and can go back to work? Jesus could not do as good a job as that! By way of comparison in the 5 years to 2008 there were 12 percent of claimants who went from ACC on to benefits because they were rehabilitated and there was no job for them. In 2010 it was 19 percent. What is the miraculous remedy? It is not because rehabilitation improved; it is because claimants have been shoved off it. 
Let me read from some correspondence I have had just in the last couple of days. It does not take much to cite evidence when it comes to ACC. I just dip at random into my “In” pile for the current day and you get something like this. Here is what this Wellingtonian said: “At the end of January 2010 I had an accident coming down a ladder while off on holiday. When I first applied for ACC they queried whether it was due to any pre-existing conditions and whether I could get anyone else to help me apart from ACC.” That is January 2010. Fast-forward to the end of 2011. The old case manager went; “a new case manager was appointed and at our first meeting after introducing herself she simply stated that her job was to get me off ACC. Alarm bells rang. Where was the rehabilitation? Where was the job training?”. That question is being asked by hundreds of innocent New Zealanders up and down the country right at this moment because ACC is in crisis and they are paying the cost. 
The issue in ACC is no longer just one of confidence in ACC. It is about how the issues are handled—politically. The present Minister is not up to it. The top echelons of the— 
Hon MARYAN STREET (Labour) 
: 
 In 2008 when Nick Smith took over the portfolio there were two difficulties with ACC. One was that the return on its investments was dropping. And why was that? There was a global financial crisis: a global financial crisis in which every investment company and investment account around the world began to notice a falling away in the interest and the returns on their investment. So that was one problem. There was another difficulty and it was with the non-earners account. There was some underfunding in the non-earners account. ACC has six accounts: five were fine and are funded by levies. The one that is not funded by levies is funded by appropriation. There was some underfunding because of the increased costs of medical treatment in large measure. There were two difficulties and two challenges—one that needed to be waited out and the other one that needed to be addressed by an incoming Government. 
But what did we have? We had Nick Smith come in go round in tiny circles and create a panic. He created a panic around an institution that had existed since the 1970s and was brought in by a National Government as Michael Woodhouse said because it saw the purpose and usefulness of it as well. But this Government has now reduced this ACC institution to chaos and destruction. It has wrought more chaos and visited more destruction on this organisation than any other public sector agency that I can think of. 
When we have a look at the report of the Transport and Industrial Relations Committee we notice that in the period from 2007-08—I was Minister for ACC over that time—there were 5000 decisions going to review but by 2010-11 there were over 9000. The increase in the decisions overturned at review went from 900 when I was the Minister to 2288 during the time Nick Smith was the Minister. Let me give you one other significant factor and it goes to the issue of morale. The select committee reported on staff issues. It said proudly that ACC had said that it had met the target of exceeding the New Zealand State sector 50th percentile and had improved from 2009-10 to 2010-11. I will bet my bottom dollar that by the time the 2011-12 review comes round it will have plummeted. 
But maybe there is some remedy that is in the report because if we go on to the very next sentence it says: “We noted that the biggest collective employment agreement covering ACC staff had expired 3 years ago and remains unsettled.” Perhaps ACC could get some performance from its staff if it treated them well to begin with and it concluded their collective agreement instead of cooking up ideas that provide the worst of incentives by offering bonuses if you shoot as many people as possible off the long-term caseload. If you get those people off and you get a bonus for it that has got to be the most pernicious the most evil and the most destructive way of addressing rehabilitation that I have ever heard. It creates the wrong kinds of incentives for staff. 
Sign that collective agreement. Get the staff morale back on board. People want to work in an organisation that they know works well for people. At the moment they are leaving in droves from ACC starting at the top. They are leaving in droves. Nick Smith’s plan may well have been to turn the corporation into chaos. That may well have been his plan because it happens a lot with portfolios that Nick Smith takes over. They are reduced to chaos in short order and he usually gets bumped off and changed so that it can be repaired by somebody else. This one is now in Judith Collins’ lap to repair. She needs to address these issues. If she wants a culture change try settling the collective agreement in that workplace. Try stopping putting in perverse incentives that are going to make people unwell and will not assist in rehabilitation. 
KEVIN HAGUE (Green) 
: 
 There is something fundamentally wrong in ACC. It has been wrong for a while and it gets “wronger and wronger” by the year. The year in question 2011-12 has been the worst year on record. Other speakers have spoken about the social contract that historic bargain in which New Zealanders gave away the right to sue in exchange for a system based on the Woodhouse principles. I have spoken previously in the House about those. It was a great system—a great system that has been brought low. 
I want to tell a story about that system and about that process. It starts more or less in 2009 when we had a Government coming in and a new Minister for ACC who spoke about a financial disaster at ACC. Again other speakers have spoken about that. That new Minister appointed a board and signed a service and purchase agreement with the chair of the board that actually required a target for fewer and fewer people to remain on long-term compensation. In the subsequent years after that 2009 agreement—and in particular in the 2011-12 year that we are discussing today—those targets have become increasingly steep. 
So we were faced with a board of ACC that was under pressure from its Minister and in place were some instructions about what ACC needed to do. What ACC proceeded to do was progressively disentitle New Zealanders by reinterpreting the law so that more and more New Zealanders making claims were not covered. ACC chose to pursue that by introducing this staff remuneration incentives scheme by which staff who contributed to the goal of getting more and more people off long-term compensation would be financially rewarded. It contributed to that goal by hand-picking particular medical assessors who the ACC board knew were likely to give it the result it wanted which was a recommendation that this person was rehabilitated and ready to go back to work. Well it would be fantastic if that were true would it not? Would it not be fantastic if all of those people whom ACC threw off its books—those 3500 people over the past 3 years—in fact did go back into paid work? Sadly that is not the case. Actually only a tiny minority of that group were able to go back to work. Most of that group actually found themselves on income support benefits or in that dreadful limbo world of being neither employed nor eligible for benefits. That is the outcome for those groups. 
The test of that has been in the number of reviews of those decisions that ACC has faced. The current Minister said in the House last week that the rehabilitation decisions—the decisions to remove people from compensation—reflect the fact that the people were rehabilitated and ready to go back to work. Well the problem with those financial incentives for front-line staff is that there is no counterbalance. There is nothing that measures whether the decisions were the right ones or the wrong ones. In fact the increasing rate—that sharply increasing rate—at which decisions have been found at review and in the courts to be wrong suggests that there is something fundamentally wrong with the decision-making processes at ACC. 
What has happened fundamentally is that financial incentives—the dollars—have been put in front ahead of the needs of ACC’s claimants. That is nowhere better reflected than in the issues around privacy. Why is it that ACC had this catastrophic failure of privacy culture? It is because it did not really care about the claimants. Fundamental culture change is needed. Judith Collins’ first service and purchase agreement is due now. What will it say? 
Report noted. 
Independent Police Conduct Authority 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Chair. Kia ora tatou katoa. Kia ora taku tama e noho mai ra ki runga ake na. 
[ 
Greetings to you Mr Chair and to all of us. Greetings my son seated up there. 
] 
The Maori Party enters this debate with the clear line that we took to the polls last year when we sought to disestablish the Independent Police Conduct Authority. We believe that the public needs to have trust and confidence in the New Zealand Police and unfortunately recent history has not enabled that to occur. I have to say that I have got great admiration for the job the police do having been out with them but unfortunately some issues have been really testing that admiration. In fact our full trust and confidence in the police is actually at an all-time low. Recent surveys have reported 28 percent of New Zealanders have full trust and confidence in the New Zealand Police. Whether it is perception or practice this is about the fragile trust and confidence that New Zealanders have in our police force. 
I would have to say that the financial review that we have in front of us or at least I have in front of me is not all that flash. The report of the Law and Order Committee revealed that there was a deficit of $538000 in the 2010-11 year and despite a goal of inspecting 30 detention facilities during the year the authority managed about 20. The number of open files is still quite high. In 2011 there remained 584 open files. The Maori Party believes that every New Zealander has the right to expect trust accountability and transparency out of the Independent Police Conduct Authority and we are mindful of the observations of Transparency International that “The numerous agencies in government responsible for minimising corruption represent a problem. … There should be fewer more centralised controlling agencies.” It was in light of that that the Maori Party called for a single anti-corruption commission which might bring together the Independent Police Conduct Authority the Serious Fraud Office the Judicial Conduct Commissioner the Judicial Conduct Panel and even the investigative functions of the State Services Commission. 
It is a real worry that in the financial review there is comment that the authority has had to rely on staff taking on extra work in order to meet its responsibilities. Something I think is terribly wrong if the workload does not appear to have been reduced. There is a significant deficit return and some work simply is not getting done. Particular concern is related to the responsibilities of the authority to issue its report into the activities of what has now become known as the Tuhoe raids back in October 2007. Five years on it is a miscarriage of justice if the State agent established to report on matters such as this has still not offered up its report. When I asked questions of the former Minister of Police last October the response from Minister Collins was that in the interests of justice that report would not be public until the court case had been completed. Well as the local MP I am pretty disappointed that the reports into the treatment suffered by the people living in and around the Ruatoki valley have not seen the light of day—both the Independent Police Conduct Authority report and the Human Rights Commission report. The violations of human rights that occurred on 15 October 2007 have cast a real sad and wide shadow over this nation and it is my belief—it is the Maori Party belief—that it is time that the events of that day were exposed for all to see. 
Finally there is a headline comment made in the report of the Law and Order Committee about the role of the New Zealand Police and the Independent Police Conduct Authority that these two organisations are “on a ‘parallel path’ towards ensuring public confidence in policing.” If that is really the case then I would hope that there is someone listening who might have some courage to have those reports issued so that all New Zealanders then can make up their minds. Kia ora tatou. 
Hon ANNE TOLLEY (Minister of Police) 
: 
 I want to take a short call just to address a couple of points that the previous speaker Te Ururoa Flavell made particularly in relation to the Independent Police Conduct Authority and the Operation Eight report. I want to preface it by saying as a relatively new Minister of Police and having received only one report from the authority that the quality of that report was outstanding. I think the authority should be commended for the very thorough work that it does do in reporting on some of these major events in a way that the general public can follow pretty carefully through what has happened. Of course the report that I am referring to is the report into the accidental shooting of an innocent bystander when the police were pursuing an armed offender in Auckland. 
If I come back to Operation Eight the member himself made the point that the previous Minister of Police commented on the delay in the report from the Independent Police Conduct Authority until the court case was completed. Well it might be 5 years down the track but we are still awaiting the finalisation of that court case. We are still awaiting appeals. So in the interests of justice as much as all of us would like to have that Independent Police Conduct Authority report finished and have the report out in the public we do have to await the finality of the justice system. 
In the meantime I commend the Commissioner of Police for his meetings with Tuhoe. The point he has made is the fact that the operation was not against Tuhoe; in fact the operation took place right across the country against a wide array of people. But no doubt the people of Tuhoe await with the most interest the report from the Independent Police Conduct Authority—as we all do. Once the court case has been completed I have no doubt that that report will be forthcoming very promptly. 
So I would just like to finish by saying that I think we are very well served by the Independent Police Conduct Authority and of course we have a new head of that authority in Judge Carruthers. I am sure that the very high standard that has been set will continue under its new leadership. 
JACQUI DEAN (National—Waitaki) 
: 
 The Independent Police Conduct Authority is an independent Crown entity and as it notes in its statement of intent for 2009-12 it has a role as watchdog over police actions. When the Chair of the Independent Police Conduct Authority Justice Goddard appeared before the Law and Order Committee she was very clear on that point—that the Independent Police Conduct Authority is there as an independent body on behalf of the public of New Zealand to scrutinise and take complaints about and write reports on behalf of the people of New Zealand on the New Zealand Police. 
It was interesting also in the evidence that Justice Goddard gave to the Law and Order Committee that she was well aware of the fiscal constraints that this present Government has and was satisfied also that the Independent Police Conduct Authority could fulfil its functions as a Crown entity in that environment. In fact Justice Goddard made no complaint at all about the requirement to operate within a constrained fiscal environment and seemed rightly satisfied with the work of the Independent Police Conduct Authority over the previous year in her evidence to the committee. 
What I believe was most notable in the evidence in the financial review to the Law and Order Committee was the comments that Justice Goddard made around its investigative capacity. In respect of the most serious matters brought to the Independent Police Conduct Authority it had been the practice that the authority would wait for the police investigation of that particular serious matter and then perhaps review it afterwards. So what is now the practice of the Independent Police Conduct Authority is that it itself undertakes the investigation rather than sitting back and waiting for the police to investigate themselves and then review that complaint after it had been determined. I thought that was a very powerful attitude to take and I commend the Independent Police Conduct Authority for taking that approach. As the Minister of Police has just mentioned Justice Carruthers will pick up the role of the Chair of the Independent Police Conduct Authority and we look forward to continuing with his contribution to the watchdog role over the New Zealand Police. 
The authority independently investigates all deaths and all instances of serious bodily harm caused by police employees. It also investigates or directly oversees the investigation of the most serious complaints against the New Zealand Police. This is an incredibly important role that the Independent Police Conduct Authority has and so the committee questioned the relationship the Independent Police Conduct Authority has with the police and what the relationship is like between those two organisations: the police and the watchdog. 
Well we were told that although the authority has a memorandum of understanding with the police—which was signed in 1994 so it is now a few years old—there is a good spirit of cooperation between the Independent Police Conduct Authority and the police and that in its view that agreement although it was useful is now largely irrelevant because both bodies understand very clearly their role. The point was made also that the two authorities were not in an adversarial relationship but actually were working on—and these are the words of the Independent Police Conduct Authority—a parallel path towards ensuring public confidence in policing. 
I just want to pick up on the comment made by the Maori Party MP Te Ururoa Flavell about the deficit that was recorded of $538000. The Maori Party member noted that this was a bad thing. Well actually there is a simple explanation for that. The shortfall came about because of a very important child abuse inquiry for which it received an allocation spanning 2 financial years. Thank you. 
Report noted. 
Privacy Commissioner 
TIM MACINDOE (National—Hamilton West) 
: 
 I am pleased to take a call in this Crown entities debate in my capacity as chair of the Justice and Electoral Committee. The Justice and Electoral Committee has attempted this year to review all the Crown entities for which we have oversight. That is a fairly tall order. Some such as the Abortion Supervisory Committee and the Law Commission are reviewed quite rarely so I want to thank members of the committee one of whom is right behind me at the moment for their attention to this most important aspect of our function of scrutiny this year. 
Another of those entities which is also reviewed only periodically and which I wish to focus on here is the Office of the Privacy Commissioner— 
Sue Moroney 
: “Pry-vacy”. 
TIM MACINDOE 
: Well it depends Miss Moroney on which of your parents you listen to. My mother always said “pri-vacy”; my father always said “pry-vacy”. Dad is dead so I tend to stick with Mum in case she might be listening. But I am confident that all members of this Chamber would agree that we are fortunate to have a commissioner of the calibre and experience of Marie Shroff. She has a very proud record of public service in New Zealand. 
As is the case with many Crown entities in the current fiscal environment demand for their services is often increasing while funding necessarily remains static. That is certainly true of the Office of the Privacy Commissioner which is an independent Crown entity established under the Privacy Act 1993. Just for the benefit of the many people who are listening in the gallery at the moment or who may be watching on their television sets at home it may be useful to explain that the commissioner has wide-ranging functions including but not limited to investigating complaints about breaches of privacy running privacy education programmes examining the privacy implications of bills maintaining the Privacy Act’s information privacy principles safeguarding human rights ensuring that New Zealand meets its international privacy obligations and adheres to general international guidelines and protecting social interests that compete with privacy such as freedom of information. 
That last function in particular requires particular wisdom discernment and constant vigilance. The commissioner’s work has to adapt rapidly to emerging trends and technologies and demand for it is ever-increasing. In spite of budgetary constraints and growing demand the commissioner has improved productivity and service quality. We were very pleased as a committee to hear that and to be able to commend the commissioner for that achievement. 
We were advised that over the last 5 years there has been a substantial increase in public complaints lodged with the commissioner. Media inquiries have doubled and telephone and email inquiries have also increased by about 50 percent. We were told that about 10000 calls are made to the commissioner’s inquiries line every year. There is no Minister responsible for privacy issues so the Privacy Commissioner is the only legitimate source for media information on matters pertaining to privacy. 
The commissioner expects the number of inquiries to continue to increase as privacy accidents are increasing because of the large databases of personal information held by public agencies. We had an interesting discussion with the commissioner about the implications of ever-evolving technology especially social media. The commissioner is concerned at evidence that employers in the United States are increasingly requesting access to or passwords for prospective employees’ social media accounts. That is a really worrying trend and it is apparently quite common now in the United States. Fortunately it is not yet thought to be a problem here in New Zealand but the commissioner is aware of the possibility of it and will remain vigilant. 
We also discussed the very real and growing problem of cyber-bullying especially among young people. We all know that this can lead and indeed has led to some considerable distress and tragic outcomes. So we were very pleased to hear that information kits for teachers on protecting online privacy were distributed to secondary schools several years ago and that the commissioner has recently received funding from Unesco for a similar initiative for primary schools. 
The Office of the Privacy Commissioner is a Crown entity that is performing a very valuable public service. It has sensible priorities and a very realistic understanding of the current fiscal environment. So I am confident as indeed were all of the committee as we met with the commissioner and conducted this financial review that New Zealanders are well served by the Office of the Privacy Commissioner. 
Report noted. 
Electricity Corporation of New Zealand 
Report noted. 
New Zealand Post 
Report noted. 
LOUISE UPSTON (Junior Whip—National) 
: 
 I raise a point of order Mr Chairperson. Some of the issues that we wish to debate have been passed. Are we still able to do that? 
The CHAIRPERSON (Lindsay Tisch) 
: Well I need to know which ones they are because on the list— 
Louise Upston 
: Genesis Power please. 
The CHAIRPERSON (Lindsay Tisch) 
: Which one? 
Louise Upston 
: Genesis Power. 
The CHAIRPERSON (Lindsay Tisch) 
: Well if you wish to debate that you can but that is not on the list that I was given. I understand then that members wish to debate the entity Genesis Power Ltd. 
Genesis Power 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I am very pleased to stand and discuss the financial review of Genesis Power. Genesis Power is a developer and procurer of fuel sources a generator of electricity and a retailer and a trader in energy. It supplies 19 percent of New Zealand’s electricity. As a result of the enactment of the Electricity Industry Act 2010 in June 2011 Genesis purchased two of Meridian Energy Ltd’s hydro generators Tekapo A and Tekapo B. This acquisition of the two hydros changed the generating portfolio of Genesis. Dame Jenny Shipley the chair of Genesis reported to the Commerce Committee that Genesis went into the South Island market and in a difficult environment succeeded in securing and actually exceeding its targets in terms of the numbers of people who joined Genesis. She reported that it was a very competitive environment but that competition was good for customers and it also made companies perform very well indeed. She said that its approach was to try through good customer service to reduce and avoid churn. 
Many of the energy companies reported as did the Electricity Authority on the effect of what they call churn where through the website www.whatsmynumber.org.nz consumers have the opportunity to compare retail prices and be able to switch between those retail companies in order to get the best price for their electricity. What they intended to do and did was understand the customers relate to them in terms of communication response time time to serve getting back to people solving their problems and so forth and also offer a range of products that met different customers’ profiles. So the competition that www.whatsmynumber.org.nz has created has caused a great response to the market and the effect of that has been the reduction in prices particularly around those discounts for early payment. One energy company increased its discount from 10 percent to 22 percent because of that. So it has had a very positive effect. 
In 2010-11 Genesis generated revenue of around $1.8 billion and it made an overall post-tax loss of $17 million partly as a result of the $97 million revaluation costs when there was a revaluation of the Tekapo B station particularly for the forward planning around work it wanted to do there. It acquired 26500 additional South Island customers. 
Genesis Power is one of the energy companies in which the Government will offer 49 percent interest in the mixed-ownership model. Inevitably this came up in discussion at the financial review by the Commerce Committee. Dame Jenny Shipley reported that she was very happy with both the board and the management’s performance. She reported that Genesis raised debt. It raised a corporate bond in order to fund the transaction of purchasing Tekapo A and Tekapo B and having a listed bond required it to give every consideration to performing as if it was a listed entity. This came up I understand last week in the debate in the House. 
One member of the committee asked: “what is the upside in your view or the board’s view … [regarding] partially floating a sound company” …?” The chair Dame Jenny Shipley replied: “let me say that I think taxpayers are entitled to know that SOE boards attempt to run these companies in the best way possible.” But she said that “the second point in the case of Genesis is we do have a corporate bond and so we actually have real and legal obligations to continuous disclosure—we have to—in any material decisions that we make. So we are right in the zone and frankly the board’s skill attention and competency has … already moved into that space.” She went on to say that it was “because of the bond requiring us to pay attention in order to partially fund the cost of the Tekapo transaction.” Genesis raised a bond and because of that bond issue according to the chair it became subject to market scrutiny regarding their company performance. 
Report noted. 
Landcorp Farming 
Report noted. 
New Zealand Railways Corporation 
DAVID BENNETT (National—Hamilton East) 
: 
 Thank you for the opportunity to talk in regard to KiwiRail today and just the importance that that organisation has for the future of this country as we look forward. We are a trading nation and we rely on getting freight to ports quickly efficiently and in a timely manner. We also rely on taking freight from ports to New Zealand’s businesses. 
Hon Trevor Mallard 
: What’s the Government doing about the Gisborne line? 
DAVID BENNETT 
: The Labour Party wants us to talk about Gisborne. Is the Gisborne line what you want to talk about? Well we will come to that. But we have to look at the essence of what KiwiRail is there for. It is a major infrastructural asset that we have as a country. This Government has committed to turning KiwiRail round. We have a turn-round plan which has a distinct Government investment in that organisation and it is in the best interest of KiwiRail and New Zealand business going forward. 
We want KiwiRail to be effective and to have a long-term strategy. To do that KiwiRail needs to stand on its own two feet. And what KiwiRail has suffered from for many years is political interference telling it how to run its business. KiwiRail has then been required to do things that are not economically in its best interests and cost it money and therefore it is not competitive. The thing we need to do with KiwiRail is let it be a business. Let it have the freedom to go out there and compete. Let it go out there and make decisions on where it wants to invest its money and not be told by people in this House how it should run its business just for purely political motives. The Labour Party bought KiwiRail back to do that. We have taken KiwiRail on and will make it run as a real business and that is the defining difference between the two parties. 
Sue Moroney 
: But no passenger train from Hamilton to Auckland right David. 
DAVID BENNETT 
: You want to talk about the passenger train from Hamilton to Auckland. That is what Sue Moroney wants to do. This is Sue Moroney’s election pledge for the last two elections which has not got off the ground. It cost $15000 a year per passenger on that train. Sue Moroney wants to give 95 people a subsidy of $15000 each for a year do you not Sue? 
The CHAIRPERSON (Lindsay Tisch) 
: Order! 
DAVID BENNETT 
: That is what it costs. Those are the numbers. The city council said no. The regional council said no. But yet Sue Moroney went to the electorate year after year seeking that train—a train that has not worked in the past. Let us have a look at the trial during the Rugby World Cup. Guess how many people went on that train. 
Hon Chester Borrows 
: Five. 
DAVID BENNETT 
: No it is more than five. 
Chris Auchinvole 
: Six. 
DAVID BENNETT 
: Six? It is more than six. It is not many more than six; keep going guys. There is a potential— 
Nikki Kaye 
: 20. 
DAVID BENNETT 
: No it is less than 20. It was nine. Nine people went on this great train during the world cup to a rugby game and Sue Moroney said it would be full. That is from the great Labour Party geniuses of economic management who know better than KiwiRail management about how to run their own business. They said: “Let’s have this train. Let’s do it. It will be economical.” And there were nine people on it. It is $15000 Sue if you have 95 people. So if you have only nine people on it how much is that subsidy for that train per year? It is a lot of money. That is what it is Sue. It is a lot of money. 
The CHAIRPERSON (Lindsay Tisch) 
: Order! The member knows that he must use the member’s full name. All right? It has happened twice in this debate. The member knows the consequences of not using the member’s full name or title. 
Sue Moroney 
: And he needs to tell the truth. 
The CHAIRPERSON (Lindsay Tisch) 
: The member cannot say that. I ask the member to withdraw and apologise for that comment. 
Sue Moroney 
: I withdraw and apologise. I raise a point of order Mr Chairperson. 
The CHAIRPERSON (Lindsay Tisch) 
: If it is on this matter the member will be out of order. 
Sue Moroney 
: I do wish to ask the Chair to ask the member to speak to the Crown entity that he is actually supposed to be talking to. 
The CHAIRPERSON (Lindsay Tisch) 
: I will decide on that about relevance. I know the member will come back to it. 
DAVID BENNETT 
: Thank you Mr Chair. KiwiRail is an important part of our infrastructure. It has an opportunity in two areas: freight and passenger transport. Rail works really well when you have a large contingent of freight in one place that wants to go to another place. And it works well when you have a large number of people in one place who want to go to another place. We have to be careful how we invest in KiwiRail to make sure it uses that strategic advantage. For example Hamilton is a great place for a freight hub for KiwiRail and we are working closely with Tainui to develop that at Ruakura. That is in the best interest of Tainui and it is in the best interest of the New Zealand economy and it will help us to deliver those resources and that infrastructure to our people going forward. 
Passenger transport works well in Wellington and Auckland. Wellington is a very good place for passenger transport because it is a straight line; people live in one place and they work in another place and it is not a great distance. We are investing heavily in the passenger transport network in Wellington. In Auckland it is important as well because Auckland is our biggest city and we need to develop that infrastructure. We have put a billion or so dollars into the electrification of the Auckland network. That is a huge investment for the Auckland rail system. It is for passenger rail. 
Report noted. 
Solid Energy New Zealand 
EUGENIE SAGE (Green) 
: 
 I am pleased to take a brief call on the financial review of Solid Energy. The way in which we define and measure the success of companies like Solid Energy goes to the heart of how we run our economy. In the 2010-11 financial year Solid Energy generated $828 million and recorded a net profit after tax of $87.2 million. But that profit does not take account of externalities. It does not take account of the environmental costs of the company’s coalmining at Stockton and the acid mine-drainage into the Ngakawau River and other waterways. It does not take account of the increased greenhouse gas emissions from the company’s increase in coal exports. Solid Energy is a creature of our traditional economic model and our system of Government accounts where we measure economic success by the financial bottom line and the focus is on growing GDP. 
 That is what the Green Party would like to change through Dr Kennedy Graham’s Public Finance (Sustainable Development Indicators) Amendment Bill— 
Hon Trevor Mallard 
: Where is he? Let him speak. 
EUGENIE SAGE 
: He is in New York. That is why that bill is so important because we would be discussing different questions here tonight in this financial review if we had the 39 environmental indicators of prosperity in our national set of accounts and if Solid Energy’s performance was evaluated in terms of those indicators. The profit line for Solid Energy conceals the death of hundreds of rare  
Powelliphanta augustus 
 snails frozen to death in the fridges of the Department of Conservation in Hokitika because Solid Energy insisted on removing them from their natural habitat so that it could take the top off Mount Augustus. The Green Party wants these externalities to be taken into account in both the company’s balance sheet and its annual report and in our national accounts. 
One of the most serious externalities which cannot be adequately considered in this financial review is the impact of the company’s lignite mining in Southland. The large profits that Solid Energy has made have allowed it to experiment with untried technology. It is proposing to convert low-quality lignite into briquettes into urea and into diesel. 
Hon Trevor Mallard 
: That’s just stupid. 
EUGENIE SAGE 
: It is just stupid. Thank you Mr Mallard. The Parliamentary Commissioner for the Environment says that the proposed lignite plant would be responsible for the single biggest increase in carbon emissions in New Zealand’s history. The Government went to Rio but it should not have been proud to be at Rio because shareholding Ministers should have seen the irresponsibility in Solid Energy being allowed to proceed with lignite mining in Southland. 
In 2009 New Zealand in Copenhagen took responsibility for reducing our annual greenhouse gas emissions to between 10 to 20 percent below 1990 levels by 2020 yet our greenhouse gas emissions are on track to be 30 percent above the 1990 level by 2020. Solid Energy is making a major contribution to that. It makes no sense for New Zealanders to subsidise new investment in the carbon-intensive technology that Solid Energy is undertaking in Southland. It makes no sense to allocate free carbon credits that will equate to billions of dollars of taxpayer subsidies to this company. 
It made interesting reading looking at the Commerce Committee’s report and the transcripts because there is a whole issue too around lack of accountability and lack of transparency. There was an issue that the shareholding Ministers—the Minister of Finance and the Minister for State Owned Enterprises—should have pushed the organisation on. It will certainly get worse with the mixed-ownership model because there is no ability for Ministers to seek information from the mixed-ownership model companies and there is no ability for the Official Information Act to apply. Solid Energy declined despite questions from members of the select committee to release the business case for its Southland lignite conversion projects. It also declined to release the results of its annual public opinion surveys which it claims substantiate its view that the majority of New Zealanders believe that our coal should be developed if our environment is protected. There is no ability with that business case not being released and the public opinion surveys not being released—not being able to see the questions that Solid Energy is asking—to actually look properly at the operations of the company. So there has been very limited accountability and transparency in the way that Solid Energy does its business. Thank you. 
Report noted. 
Auckland District Health Board 
Dr JACKIE BLUE (National) 
: 
 I am delighted to speak in the Committee stage of this debate on the Auckland District Health Board. First I would like to acknowledge the Minister of Health the Hon Tony Ryall for his leadership in the health sector which is now happily a very settled sector that is in stark contrast to what it was before we took over. Back then it was a demoralised and disenchanted sector where clinicians were considered part of the problem not the solution where women with breast cancer were shipped off for radiotherapy in Australia and where tens of thousands of New Zealanders had been culled from waiting lists. 
I would like to focus on the 2010-11 financial review of the Auckland District Health Board which the Health Committee viewed in conjunction with that of the Waitemata District Health Board. The committee made this decision in its timetable because both district health boards had worked collaboratively for some years and were working towards practical collaboration and it seemed sensible to review both district health boards together. 
Both district health boards share a chair—that is Dr Lester Levy a Maori board member—and integrated back-office functions. I would like to acknowledge Dr Levy for his leadership in particular with reference to the Waitemata District Health Board which was quite a troubled district health board prior to his taking the chair. Dr Levy reported collaboration at every level which the committee was very pleased to hear. 
 Waitemata had quite serious financial difficulties in the past recording deficits in 3 out of the last 5 years but the financial result in the year under review shows it recorded a surplus. The committee felt that this was actually an outstanding dramatic and astonishing turn-round and I think that that is all down to Dr Levy’s leadership. 
I will just make some general comments about Auckland District Health Board. It is responsible for 87 percent of the people in the Auckland Council wards; it is the fourth-largest of the 20 district health boards. It covers almost half a million people which is about 10 percent of New Zealand’s population. As at June 2011 Auckland District Health Board received about $1.8 billion in revenue and employed 10000 staff which is the equivalent of nearly 7500 full-time equivalents. It had a small net surplus for the year under review of $142000 which is slightly up from the budgeting surplus of $58000. 
To get some perspective around this district health board I would just like to make the comment that it is the largest trainer of doctors with approximately 1200 doctors and at any point 630 of them are at various stages of training. It is the largest clinical research facility in New Zealand. It provides local hospital and outpatient services for more than 400000 people living in the Auckland City area. It provides tertiary services for the northern region and over 50 percent of services are provided to people outside the district. There is a significant what we call inter-district flow. 
It is a provider of many specialist services such as organ transplants—that is heart lungs and livers—acute massive pulmonary embolism treatment services paediatric intensive care major head trauma following neurosurgery high-risk obstetrics and a number of other tertiary services such as clinical genetics and paediatric oncology for patients in the northern and midland regions. It is a very busy district health board and there are many layers and complexities in its operation. 
The committee was very pleased to hear from Dr Levy that improving productivity was a priority area for the Auckland District Health Board and that it was focusing on greater productivity done more efficiently with lower costs shorter hospital stays and more satisfied patients—and who could complain about that? 
I would like to just talk about the health Minister’s introduction of health targets because that really has put the minds of district health boards on productivity. These health targets are national performance measures specifically designed to improve performance. They have been accepted widely through the sector. They have not been seen as threatening by clinicians. They provide a focus for action. They are published quarterly and they cover such matters as emergency departments elective surgery cancer treatment waiting times—particularly radiotherapy—immunisation helping smokers to quit diabetes and cardiovascular services. 
The health targets work as benchmarks for district health boards and in reality are a league table but as I said earlier they are not seen as threatening. In fact district health boards have used them to benchmark each other and to step up. Quite frankly Waitemata has turned from being one of the poor performers to being one of the top performers. 
Report noted. 
Career Services 
Hon HEKIA PARATA (Minister of Education) 
:  
Kia ora. Tena koutou tena tatou te Whare e whakawhaiti nei i runga i tenei kaupapa o te po. 
[ 
Thank you. Greetings to you and us collectively the House compressed here in this evening’s debate. 
] 
I am absolutely delighted to take a call about Careers New Zealand which was Career Services the Government agency responsible for leading the career development of all New Zealanders. It is because I have absolute confidence in the contribution that Career Services makes to the overall education landscape and the powerful support it provides to all New Zealanders—young people in particular including Maori and Pasifika—because we of course are very committed to those young people leveraging off their educational opportunities and being able to define the skills that are relevant to the career pathways that they would like to be able to take. 
So notwithstanding the deep scepticism that is being expressed by the Opposition members of this House I think it is important to appreciate that Careers New Zealand Mana Rapuara Aotearoa is very focused on how it will help all New Zealanders how it supports school career guidance officers and how it works with industry training organisations local councils iwi and hapu and Pasifika organisations in order that they are able to assist young people to design career pathways for themselves.  
There have been a number of recent achievements that I am very proud to bring to the attention of the Committee and which will have been reported at the select committee. In July last year a Careers Summit was held for instance with representatives from the private and public sectors to ensure the careers system works for both employers and individuals and contributes to economic growth in New Zealand. A career system action plan was developed focusing on education to employment and effective careers information because of course rather than just talking about how young people can be engaged Careers New Zealand actually provides services that support them to be able to have a real and meaningful opportunity to develop their lives. We believe in young people being self-determining rather than being dependent unlike the Opposition members of this House.  
Capable Auckland is a Careers New Zealand - led Auckland network because as we know a very big proportion of the youth of New Zealand is in Auckland. It is a network of career and education professionals and industry and business people. It is a key project in the Auckland careers blueprint.  
Career education benchmarks: Careers New Zealand has developed innovative self-evaluation tools for schools and tertiary organisations that help young people to assess what choices they should be making as they navigate their way through our qualifications framework. Canterbury recovery: Careers New Zealand is supporting the rebuild effort with a particular focus on matching skills with the developing labour market in Canterbury. Why is that important? It is important because we need to be boosting all levels of the employment opportunities of young people.  
The Canterbury Careers website has been launched. It provides information on available jobs in demand and the skills needed in Canterbury with direct links to Canterbury jobs advertised in a range of places. There are 16000 National Certificate of Educational Achievement (NCEA) students in Canterbury who are encouraged to plan for their future which of course is a fillip for them because we all know how challenging the times have been in Canterbury and the idea that they can also develop and progress their careers is extremely important. So 16000 NCEA students in Canterbury have been assisted. Careers New Zealand ensures that this support is made available in all sorts of media that young people plug into.  
Can I also talk about how young Maori people are being assisted. Nearly 4000 young Maori their whanau and other influences have been helped to identify what skills pathway they could pursue. Te Tukirunga which is a whanau-focused culture-based careers guidance model is a flexible programme that allows young Maori to see what choices they might have and to do it in partnership with their whanau. That is similar to Te Kauhanganui which the Opposition members may know is the Waikato Tainui initiative that builds skills for those young people in alignment with Waikato Tainui’s navigational approach. Similarly Pasifika young people: instead of just talking about it this Government has gotten on and focused on how we can help those young people to be successful. 
Report noted. 
New Zealand Qualifications Authority 
NIKKI KAYE (National—Auckland Central) 
: 
 I am very pleased to take a call on the New Zealand Qualifications Authority. Can I start by acknowledging the wonderful Ministers who are responsible for education Minister Hekia Parata and Minister Joyce. They are doing an outstanding job so I am very pleased to be chair of the Education and Science Committee. 
Can I just say there are three core goals for the New Zealand Qualifications Authority in the future. The first one is to ensure that we have a clearer system and that we promote recognition of learner achievement the second is to ensure that we have increased confidence in the system and the third is to ensure that for our young people we have more portable qualifications across the world. 
Can I start by saying that we have to talk about the base that we started from because we actually cannot talk about the future for the New Zealand Qualifications Authority unless we acknowledge the very difficult situation that we inherited. We had 16 and 17-year-olds dropping out of school with fewer qualifications and lower literacy. The number of degree-level graduates did not improve between 2000 and 2008 despite huge funding increases. We had low completion rates for courses we had no incentives for tertiary institutions to improve their performance and we had a bloated qualifications register. 
One of the core jobs of the New Zealand Qualifications Authority in the future is about reducing this number of qualifications. In 2008 there were 6000 qualifications in New Zealand. For a country with a working-age population of 2.2 million people that is appalling. Under our Government there is a review. Our goal is to ensure that by 2014 the number of qualifications is down to 1200. To give you an example in the area of hairdressing for instance there were 72 qualifications. We will be getting that down to nine. 
We spend $4.3 billion in tertiary education each year. If we are going to achieve the kinds of results through the New Zealand Qualifications Authority that we need to achieve we need to do a whole lot of other things. One of those other things is improving the financial performance of universities. There are 12000 more core tertiary places funded under our Government. We are investing more in engineering science and research-led learning. We have a target of 55 percent of 25 to 34-year-olds with a qualification of level 4 or above. 
Hon Trevor Mallard 
: Another target! Another one! Have you told John about this one? 
NIKKI KAYE 
: The Opposition says: “Another target!” but what we know is that we are working from an appalling record under the last Labour Government and secondly we also—and this was mentioned by the Minister of Education—have some very disadvantaged people in our country. We have unfortunately some very difficult issues around Maori and Pacific Island education. What we are interested in is actually having accountability and that is what targets are about. That is why we have them. We are able to focus Crown entities and other entities such as the New Zealand Qualifications Authority and actually say: “We want accountability; we want some targets.” This is not about pouring more money into the system; this is about ensuring there is clarity and there is a simpler system for New Zealanders to be able to go out across the world with decent qualifications. That is what this entity is now tasked with unlike under the last Labour Government where there were low completion rates and where we had 16 and 17-year-olds dropping out. 
It is also about ensuring that we know through schemes like the Youth Guarantee that some people do not suit classrooms. For those people we are investing more than $100 million in the Youth Guarantee scheme. Can I say that we are only able to do this with the support of Ministers like Hekia Parata and the Hon Steven Joyce who have fought very hard in the education budget to increase our education budget every single year—by $512 million over the next 4 years—and that is because of the Hon Hekia Parata. It is a tribute to this Government that we are investing more than ever before in the education portfolio. 
What we can also see is that we need to have more confidence in our private training establishments. That is why over 4 years there is $29.5 million to reward completion and innovation. But it is also about acknowledging that we are pouring more than many other countries into our student loan and allowances system and that is way out of step with many other nations. I think 41 percent or 42 percent of our total tertiary budget is spent on student support. You compare that with Australia at 31 percent. If we want to get the kinds of outcomes we want for young New Zealanders in the future we have to shift funds into things like research and into things like training not just into student support and that has been a big focus for this Government. 
Again it is about incentives in the system. So if we look at what— 
Report noted. 
Children’s Commissioner 
Report noted. 
Families Commission 
SUE MORONEY (Labour) 
: 
 I do want to talk about the Families Commission because the Government has made some moves to collapse the Families Commission and the Children’s Commission together. One would think that the Opposition might have some concerns about that but in fact what we are more concerned about is the lack of independence being shown by the Families Commissioner under this Government. After that Families Commissioner was appointed by the Minister Paula Bennett suddenly we had a Families Commissioner Mr Carl Davidson who in one press interview rendered the Families Commission absolutely irrelevant by declaring that he was going to revoke the Families Commission’s position on extending paid parental leave. This was from the Families Commissioner—the man who is supposed to be putting families at the heart of what he advocates for. When it came to being asked a question about extending paid parental leave on the back of a bill that had been drawn out in my name to do exactly that because the Government was not prepared to back extending paid parental leave suddenly we had a Families Commissioner who baulked at it also. He said and I am going to quote him: “I mean wouldn’t it be great if none of us had to go to work and we could just stay at home and get paid for it.” 
That was from the so-called independent Families Commissioner under this Government who in one fell swoop I think offended pretty much every woman in the country who knows that staying at home and looking after children actually is work. He pretty much managed to make his whole commission irrelevant to families in one statement all because he is working for a Government that insists that the Families Commissioner takes a position that they would want to favour. That is not the role that we should have for the independent Families Commission. The role we should have is that it should be a challenging role of the Government. It should be a role where the commissioner is prepared to stand up and fight for what families want and what families need. If that commissioner or this Government were in touch at all with the stress on working families then they would know that extending paid parental leave is indeed something that would make a big difference to family life. At the moment families do not get any financial support after their baby is 14 weeks old. That means that many parents are going back to work for financial reasons before they really want to and before their family is settled into the new routine. 
In 2007 the Families Commission actually did a very comprehensive evidence and research-based report led by Dr Rajen Prasad at the time and it was called  
It’s about time 
. In that research and evidence-based report they determined that in fact paid parental leave should be extended to 12 months. Suddenly in the year 2012 under this Government we have the Families Commissioner feeling that he needs to say that that no longer is a priority for his commission. 
But it is not the first time. He is not alone in that actually because strangely enough I had the opportunity to talk to the Children’s Commissioner also appointed by the Minister Paula Bennett recently. He is prevaricating also on the issue of extending paid parental leave. I have to pose the question to this House. What is the common denominator here? Both the Children’s Commissioner and the Families Commissioner are supposed to be independent. Those two entities were designed and set up to be independent to actually push the boundaries within the Government on behalf of children and on behalf of families. Well that now has to be the sole domain of the Labour Party because the Families Commissioner and the Children’s Commissioner are not prepared to do it in the face of that Government. The Labour Opposition is prepared to stand up for children and for families. We are at least prepared to put families and children at the centre of what we are pushing for and we will continue to perform that role even if those commissioners will not under the current direction of the Government. That means that there will no longer be a Families Commissioner. 
Peseta SAM LOTU-IIGA (National—Maungakiekie) 
: 
 It is a pleasure to rise and speak to this debate on Crown entities and State enterprises. As a Crown entity the Families Commission is about to undergo a transformation. The reason why it will be transformed is that this Government believes in better public services. In turbulent times this John Key - led Government is determined to take tough but necessary steps to manage our debt build a competitive economy and deliver on better Government services. New Zealanders know this and they know it because they have seen 600 more front-line police they have seen 2000 more nurses and they have seen 12000 more tertiary education places. 
Hon Trevor Mallard 
: I raise a point of order Mr Chairperson. I know we have had a pretty broad-ranging debate but that just goes beyond the pale I think. 
The CHAIRPERSON (Lindsay Tisch) 
: I will just remind the member that we are actually on the Families Commission so come back to that. 
Peseta SAM LOTU-IIGA 
: Recognising this after the election our confidence and supply agreement with United Future promised this positive change: “The Families Commission will have two broad functions—the existing functions will be headed by a single Commissioner and new monitoring evaluation and research functions to drive quality services for families. In addition a Families Status Report will be developed to measure how New Zealand families are getting on and government will re-direct $4m over four years to fund extra parenting programmes and relationship education in secondary schools.” 
So what does this mean? Well we are restructuring the commission and this will see its core activities streamlined through a leaner more focused structure. It will be headed by a single commissioner down from the original seven. That is right: less bureaucracy in one fell swoop. However it will be governed by a board that will include Professor Sir Peter Gluckman as well as persons from the public sector and philanthropic and business representatives. This is about credible community input into the direction of an important entity. 
The commission will also take a new role providing for independent monitoring—that is right independence—evaluation and research to measure the effectiveness of initiatives across the social sector. Funding will be reduced from $32 million over 4 years to $28 million. This will be done primarily by setting up the new Social Policy Evaluation and Research Unit. 
If we are going to make a difference in our communities for our families who are struggling we need to be able to invest in interventions that we know will work. The body of evidence will allow policy makers service providers and anyone wanting to invest in those social services to make more informed decisions. It is about having evidence-based interventions that produce better long-term outcomes—something the Labour Government of the 2000s clearly did not achieve through the Families Commission. It is about our families it is about our communities and ultimately it is about the kids in our country. 
So financially what does it mean? Well it means we are going to prioritise funds into areas that actually matter to New Zealanders: $4 million into the parenting programmes relationship education and youth mental health initiatives—programmes that have actually made a difference to New Zealanders in need. I have talked about the $14 million that will be assigned to the Social Policy Evaluation and Research Unit and it will also have $1.8 million to take over the responsibility for the longitudinal study Growing Up in New Zealand. 
In summary then the Families Commission will remain an autonomous Crown entity. 
Sue Moroney 
: Ha! 
Peseta SAM LOTU-IIGA 
: That is right Mrs Moroney—an autonomous Crown entity. This is significant change for the commission in terms of its structural arrangements its work programme its capability requirements and its size. The commission will continue to work on issues that are important for families just within a leaner more focused structure. There will be an inter-agency team from the Ministry of Social Development the State Services Commission and the Families Commission that will oversee this transition. These changes will be due to be implemented by 1 January 2013. Finally may I say that— 
Report noted. 
New Zealand Antarctic Institute 
JOHN HAYES (National—Wairarapa) 
: 
 Thank you for the opportunity to speak on this part of this evening’s deliberation. I have got to say that most New Zealanders do not know too much about what goes on down in the Antarctic except that as our colleague across the floor said it is cold. You have got to believe that. But there are some really interesting things that I would like to draw to the community’s attention—the wider New Zealand community that is. 
The New Zealand Antarctic Institute was established I think in about 1996 and its purpose is to develop manage and protect New Zealand’s interests in the Antarctic in the Southern Ocean and particularly in the Ross Sea region. It provides a lot of support for scientific research and conservation activities and it has a job to raise public awareness of the efforts it is making in that part of the world. I have to say that I have now been in this Parliament for 7 years and I have listened to Lou Sanson the chief executive officer and more recently Rob Fenwick the chair of the Antarctic Institute and consistently this pair perform at a very very high standard. They are very very good people. They are a credit to our country. They run their books well—unmodified audit opinion—and they have very very good information and control systems. 
One of the big developments over the last year has been—and particularly supporting our Government’s emphasis on environmental issues—the Government funding the development and installation of three 330 kilowatt wind-powered turbines which actually deliver more power per turbine than any other installation on the planet. They are performing at 140 percent of what they were expected to deliver so that is pretty good. If we put in another four turbines we will be able to support the Americans at their base just along the way from us at McMurdo. That is hugely good for the planet. You have no carbon emissions etc. but more important you have no waste and no risk of causing damage through some sort of oil leakage. I think the environmental stewardship of this programme is particularly good. 
Hon Trevor Mallard 
: Who made them? Who project-managed it? 
JOHN HAYES 
: Nobody in your electorate that is for sure. I think there is an international component that we also have to keep in mind here because we are operating in the Antarctic in partnership with other countries. The institute helped Malaysia to accede to the Antarctic Treaty in October of last year and we had a very big issue that the institute managed to cope with in respect of encouraging Korea to set up its base very close to our own but also to use Lyttelton as the key point of entry. One of the issues was that we did not at that point have the right sort of diesel fuel to run a ship down into the Antarctic. That problem got solved thanks to our institute. We have also had a very good donation in the last year from the Norwegian Prime Minister who provided $900000 to the Antarctic Heritage Trust. All of these things are happening because we are running a really good operation down in the Antarctic and again I congratulate the management and the staff of the institute. 
Of course the closest relationship we have down there on the ice is with the United States Antarctic Program. Our people are working very closely with the Americans on logistical arrangements and I want to thank the Minister of Defence who is sitting here in the House tonight for making available a 757 as part of our overall contribution to joint logistics with the Americans. The Americans have had a bit of difficulty over the last year because they lost an ice-breaker and an ice pier and they have had to ship in a floating pontoon system into the area. So working with them helps rationalise the logistical arrangements for the difficult job of getting people from Christchurch down into the Antarctic. 
Hon Trevor Mallard 
: The Antarctic’s exciting. Don’t make it boring. 
JOHN HAYES 
: Yes and I can think of some lovely people I would like to send down to the Antarctic and leave there to permanently freeze to become exhibits for future polar explorers. With those words I have nothing further to say and will end. Thank you. 
Report noted. 
Energy Efficiency and Conservation Authority 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Chair. Nga mihi nui ki a koutou. Kia ora. I rise to take a call on the Energy Efficiency and Conservation Authority. I want to talk about the good the bad and the ugly in this Crown entity but first I would like to acknowledge former Green Party co-leader Jeanette Fitzsimons. In 2000 it was Jeanette’s Energy Efficiency and Conservation Bill a member’s bill which passed into law the first ever piece of legislation in our country’s history to explicitly address climate change. Although we are having huge debates across the country about electricity production what we often forget is that the most effective way we could be reducing the need for electricity production is simply to use the electricity we have already just more efficiently. We would like to acknowledge all the hard work done by those Energy Efficiency and Conservation Authority officials. 
I will begin with the good. It is good to be working with the Government through a memorandum of understanding on the Warm Up New Zealand: Heat Smart programme. This $347 million budget has recently been extended increasing the amount of homes we are going to insulate to 230000. This is actually massive. It is making a real difference to New Zealand families a real difference to kids’ health and a real difference to the economy. I note that the economic benefits have recently been estimated at $1.2 billion. From those 150000 homes that have been done to date if you laid the batt end on end across the country it would stretch from Auckland to Invercargill back to Auckland and then some. So it is a huge victory. It is good to be working with the Government. 
But now I guess it is important to touch on the bad in this Crown entity as well. In Budget 2012 we saw two very important Budget lines cut under the Energy Efficiency and Conservation Authority. The first was the biofuel subsidies. This Government drastically changed the good mandate scheme that the Labour Government formerly had and put in a woefully inadequate subsidy in the Biodiesel Grants Scheme of 50c. It was absolutely inadequate. The take-up was pitifully poor and now the Government has scrapped it. We can only hope that the Government now returns to a mandatory scheme if it actually wants to see biofuels being used in New Zealand. It is a huge issue because look we are importing $8 billion in oil from some pretty unsavoury countries around the world. It is a huge strategic economic risk but the Government is not doing anything about it. It is scrapping the biofuel grant. It is not doing enough to promote electric vehicles. It is definitely not doing enough for public transport. New Zealand could actually be self-sustainable in liquid fuels and other transport fuels using sustainable biofuels from wood waste other agricultural by-products electric vehicles and a greater investment in public transport. 
The other bad in the Budget was the scrapping of the solar hot-water grants scheme—again a scheme that was doing a pretty good job. We would have liked to actually see it enhanced. We should have seen the scheme enhanced to include photovoltaic solar panels. They have dropped about 50 percent in price in the last 18 months. We could be producing a huge amount of electricity from the energy wastage just hitting our roofs if the Government support included maybe a grants scheme supported with low-interest loans and maybe helped facilitate a council rates payback scheme which has worked pretty effectively in Nelson. 
And then you have got the ugly. We have seen the good we have seen the bad and now the ugly. The Energy Efficiency and Conservation Authority is struggling because the Government’s entire focus when it comes to energy issues—and you just need to look at the Energy Strategy—is to “drill it mine it frack it”. It is the only plan the Government has got. In fact the Minister for Climate Change Issues last week in response to my questions said deliberately he wants to stimulate the risky deep-sea oil industry despite what we know. There are going to be hardly any jobs for New Zealanders hardly any taxes hardly any royalties and the profits are going to go offshore. So instead of a Crown petroleum and minerals agency why does this Government not consider a Crown renewable energy agency maybe under the Energy Efficiency and Conservation Agency—it is doing some pretty good work in conservation. Why do we not have a Government department that is actually focusing on rolling out renewable energy? We could be building tens of thousands of green jobs. We could actually be boosting the economy in a sustainable fashion. We could actually be leveraging our advantages. Just look at the Pure Advantage report about a $6 trillion dollar industry. 
Hon Chris Tremain 
: We’ve got the second-most amount of renewable energy levels in the world. 
GARETH HUGHES 
: Yep we are getting there but what we are seeing under this Government is all the focus not on getting it to 90 percent—which is its target. It is another one of the National Government’s targets but it is one that it is doing nothing about achieving. Instead it is sitting on its hands subsidising the oil industry subsidising the carbon polluters—$1.5 billion in the emissions trading scheme in the last financial year. So we see this Government sitting on its hands but actively promoting risky deep-sea drilling. The sad thing is we are missing that green race which Pure Advantage pointed to. We could be doing so much better—not only making our kids healthier through a good insulation scheme but also providing prosperity and lifting them out of poverty. Kia ora. 
Report noted. 
Commerce Commission 
Hon CRAIG FOSS (Minister of Commerce) 
: 
 I am speaking on the Commerce Commission vote which is a very very important vote and Crown entity indeed. I do note and acknowledge that the Commerce Committee may in fact have missed on page 5 of the report a slight mistake there. 
The Commerce Commission plays an essential part in the monitoring and enforcing of a very very important part of the regulatory regime across New Zealand. Part 4 of the Commerce Act obviously gets a lot of attention in the way that it has played out in courts and merits reviews and inputs reviews etc. I do note that and the committee did talk about that plus some other matters in its report. 
One of the facets of New Zealand being a small economy is that in some instances where there are one or two large players they can potentially exploit their dominant position or monopoly-type position or perhaps drive monopoly rents. Of course that is not acceptable to anyone at all—at least I am sure not to most members in this Chamber. 
 One of the harder parts about the commission’s vote is that there is an estimate there in its outputs and deliverables but it is actually very hard to estimate the time frames under which judicial processes do happen. So that does create difficulties for that vote and can provide perhaps uncertainty out there in the commercial space. It can allow so much for judicial reviews judicial processes or testing in court and then a review can happen so these may well cross over into new financial years. There can be difficulties there but I do acknowledge that the commission is doing a very good job and the committee generally noted that in its report here before the Committee of the whole House. 
One point in the report that the committee noted is that it did ask the commission about issues around convergence particularly in and around broadcasting. I think that was pretty wise of the committee because of the challenges of all things governance. In fact as mentioned here in the report on the Commerce Commission to put it in a simple way that bit of glass in our lounges that we all traditionally call the TV or the television is actually only a bit of glass. Although we all probably call it a TV it can now receive data or content traditionally by analog signal although that is switching off across the country over the next 18 months; by digital—as DTT or digital terrestrial television—by satellite; or by cable in some instances. In fact many TVs now come with either a Wi-Fi or an ethernet enabler. Additions can be put on; other little modules can be put on. The simple message there is the challenges for organisations and entities such as the Commerce Commission in broadcasting you name it having to deal with a rapidly changing digital environment under which content can now be delivered by many means that were not even contemplated when much of the legislation—be it commerce-type legislation or even broadcasting-type legislation—was put together thought of and voted upon with I am sure the best of intentions around this House. 
I do note again that the Commerce Committee talks about this on page 171 but I make the point that we just have to make sure that we maintain flexibility and perhaps be platform-neutral as within this Parliament here we devise regulatory regimes and models that entities like the Commerce Commission look after. There is also the example that a person can now read on a tablet or an iPad things off the internet they can listen to the radio they can watch TV or they can watch a movie and all of those can be from either within New Zealand or afar. They can be live recorded sped up or slowed down as the user wants. 
My point is that with regard to much of the rules and regulations that entities like the Commerce Commission have to look after we may actually have to have a look at some of these models simply because technology and the real world if you like are moving at such a fast pace that there are grey areas—which the committee did start to have a look at here—of where governance is black and white and where it is grey. Of course there are sovereignty issues around things that ultra-fast broadband brings upon our economy. 
Report noted. 
Retirement Commissioner 
DARIEN FENTON (Labour) 
: 
 I rise to take a call on the financial review of the Retirement Commissioner. It is a very interesting report from the Social Services Committee particularly given the debates that we have in front of us right now around superannuation and the issues that face our country in terms of how we are going to be able to afford superannuation for future generations. It is very disappointing that we have not been able to reach any sort of agreement on this issue. 
Debate interrupted. 
Sitting suspended from 10 p.m. to 9 a.m. (Wednesday)