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Hon DAVID CUNLIFFE (Minister of Communications): I move, That the Telecommunications Amendment Bill be now read a second time. In speaking to the second reading of this bill let me first thank the Finance and Expenditure Committee, which has worked hard to report this bill back to the House within a timely fashion while ensuring that full consideration was given to the public submissions received. The committee also gave careful consideration to structural and operational separation issues as requested, and this matter has been dealt with in this bill. May I acknowledge, perhaps unusually but with genuine appreciation, the constructive roles of all parties, including the National Opposition, in considering this bill. In my view the select committee benefited not only from able chairing and good inter-party dialogue, but also from the presence around the committee table of not one but two former Ministers of Communication, the Hon Paul Swain and the Hon Maurice Williamson, who had, no doubt, heard it all before.

This bill marks a new era in telecommunications in New Zealand. History is being made today. What some people said could not be done is being done. What some people said would not work is being given the opportunity to work, and the signs are already strongly indicating that it will work well. This is a landmark bill because we are equipping New Zealand for a new age—a digital age; an age where the smart use of technology will determine our continued prosperity as a country and make economic transformation a reality.

We are making this history today with a clear, firm mandate from the people of New Zealand, and I hope from this Parliament. The measures in this bill are a critical part of the Government’s economic transformation programme signalled principally in the telecommunications stocktake announced in May 2006, but also incorporating the outcome of the earlier 2004-05 implementation review of the Telecommunications Act. It is widely agreed that advanced broadband services are key to economic growth and the development of a knowledge-based economy. The Government understands that competitive telecommunications markets are essential to achieving the innovative knowledge-based economy of which we are capable.

This bill seeks to promote incentives for investment in new infrastructure for both new and existing players. It is also designed to achieve a cultural change in the telecommunications industry. I note that the telecommunications industry has already responded to the reforms in this bill and is working collectively towards a new digital future.

Let me take a moment to recap why we are taking these measures today. The telecommunications stocktake revealed that New Zealand is in the bottom third of OECD countries across a range of telecommunication services, pricing, and broadband take-up indicators. Specifically our connection speed offerings were, on the average, still too slow. Our standard upload speed has been too slow for many users and has inhibited some important applications in the development of advanced services. We are still one of the few countries where restrictive data caps have been the norm. OECD rankings on average per person investment in telecommunications infrastructure placed us 22^nd out of 30 nations. Similarly, the OECD’s mid-2005 rankings for the level of broadband uptake also placed us 22^nd out of 30. Quite frankly those figures were unacceptable. It is just not a sustainable situation for a small, smart country to be in.

Further analysis showed that the status quo was inadequate to boost our broadband performance. It was clear that regulation was needed to deliver the competitive telecommunications markets for New Zealand, needed to achieve economic transformation. This bill will provide for stronger competition both on the copper wire network, or local loop, and in complementary technology such as wireless, mobile, and satellite.

This bill amends the Telecommunications Act 2001 to ensure the effective regulation of the telecommunications sector. This is necessary to ensure the Government’s objectives in telecommunications are met for the long-term benefit of New Zealanders. It implements the findings of two separate, but related, review processes—the telecommunications implementation review and the recent telecommunications stocktake.

The bill itself focuses on four elements: extending the range of bottleneck services subject to regulation; enhancing regulatory processes; empowering the commissioner to monitor industry developments and ensure regulatory compliance; and separation measures to promote further competition, non-discrimination in wholesale markets, and service equivalents.

Firstly, I turn to extending the range of bottleneck services subject to regulation. Regulated services are the heart of the regulatory regime. This bill brings New Zealand into line with international best practice by unbundling the local loop, removing restrictions on the existing unbundled bitstream service, and clarifying that wholesale bitstream can be purchased without having also to purchase a phone service—the so-called naked DSL. I am pleased to say that submissions to the Finance and Expenditure Committee on these matters were broadly supportive of these provisions. The select committee has made a number of amendments that usefully clarify the detail of these regulated services.

In relation to enhancing regulatory processes, it is important to ensure that the Telecommunications Commissioner can effectively implement the regulation of these services. The bill introduces new regulatory processes and enhances existing processes to ensure that service providers can get effective and timely access to regulated services. In particular, the bill empowers the commissioner to set standard access terms and conditions for all access seekers at once, rather than on an individual basis as previously required. It enables access seekers to obtain access to regulated services, notwithstanding existing commercial agreements for the supply of regulated service. It provides for a quality of access by preventing prejudicial treatment by an access provider towards access seekers who seek regulated terms for services. The Finance and Expenditure Committee received a number of submissions on these matters and made some useful minor amendments that have been made to ensure the regulatory processes in the bill are fair, robust, and effective.

In relation to empowering the commissioner, the bill introduces a number of key changes to empower the commissioner to monitor and enforce compliance of regulatory obligations. The select committee received submissions on these provisions and made some amendments to ensure that an appropriate balance is struck between the fairness and effectiveness of the enforcement regime. The bill includes an information disclosure regime that empowers the commissioner to require access providers to prepare and publicly disclose relevant information about regulated services. It requires the commissioner to monitor the development and performance of telecommunications markets and strengthens and standardises the enforcement regime to ensure compliance with the regulatory obligations under the Act.

In relation to separation measures, the Telecommunications Amendment Bill introduces an accounting separation regime that will increase the transparency of Telecom New Zealand’s business operations. At my request the Finance and Expenditure Committee also received and considered public submissions on other separation measures, such as structural and operational separation. The majority of submissions were generally supportive of a robust, three-way operational separation of Telecom to promote competition and equivalence of access to key wholesale services, particularly if this could be achieved with the cooperation of Telecom. It is pleasing that the committee has comprehensively addressed these submissions by amending the bill to provide a process for the Minister of Communications to settle an operational separation with Telecom, following public consultation. The committee has also included firm and appropriate powers to enable the Minister and the Commerce Commission to ensure that a robust, three-way operational separation will be achieved, so that others are treated the same, or in an equivalent way, as Telecom’s own subsidiary in dealing with bottleneck and other wholesale services. The Government welcomes and supports the changes introduced by the Finance and Expenditure Committee and thanks the committee for its diligence and care in dealing with this important matter.

In addition to the core changes I have outlined, the bill addresses a number of implementation issues that have been identified through past experiences with the processes of the Act, but owing to time constraints I will not go through all of those this morning. In conclusion, the Telecommunications Amendment Bill is landmark legislation that will help New Zealand to realise its digital future. It will facilitate New Zealand’s transformation to a dynamic, knowledge-based economy and society, underpinned by values of fairness, opportunity, and security. The bill will promote competition, innovation, and investment in the telecommunications sector, which has been identified quite rightly as a key enabler of New Zealand’s economic transformation. The reforms in the Telecommunications Amendment Bill will speed the realisation of those goals, and more. The truly exciting aspect of the bill is the innovation and ingenuity that its presence is already releasing across the telecommunications sector and the broader high-tech community.

May I take this opportunity to thank all members of the select committee who worked on the bill. I thank the chairman for his good work, and thank a very hard-working team of officials and office staff who have really worked very hard to get this legislation through, ahead of schedule. I commend this important landmark bill to the House.

Dr the Hon LOCKWOOD SMITH (National—Rodney): The National Party will be voting for the Telecommunications Amendment Bill. I must say that working on the Finance and Expenditure Committee on this legislation has been an interesting exercise, because the bill that Parliament now debates is very different from the bill that the Government first introduced into Parliament.

This issue is controversial. Really, the whole argument around whether the local loop should be unbundled, as it is colloquially referred to, has been in front of Governments going back at least a decade or more. Members may recollect that a lot of controversy surrounded the introduction of this bill, when what the Government proposed to do in order to unbundle the local loop was leaked. Within days of that leak a couple of billion dollars was wiped off the share price of Telecom New Zealand, so the Government’s handling of this matter has not been perhaps the most clever that it could have been. Certainly, ordinary New Zealanders lost an awful lot of their personal asset—their personal wealth, if you like—through the way the Government handled this matter, with almost $2 billion, I think, being wiped off the share value of Telecom New Zealand. I must say that I have no shares in Telecom New Zealand, so that did not affect me personally.

The fundamental issue around the unbundling of the local loop or, in other words, giving competitors access to the copper wire that links most New Zealanders to their nearest exchange, has been controversial for many years. The evidence around the value of unbundling, or giving competitors access to that copper wire, is mixed. The select committee heard a fascinating submission from one of New Zealand’s foremost academics in the area of competition law, who went through most of the evidence from around the world where the local loop had been unbundled and talked about the impact on the uptake of broadband and on access to modern communications technology. I will never forget one of the key issues that came out of that academic presentation to the select committee, and it came from more than one person. The bit that sticks in my mind is not so much the detail of whether the evidence clearly showed that local loop unbundling has worked in this country or that country and has not worked in others, but the bit that showed that the greatest advances happen when we have competition between communication platforms, rather than competition within a platform.

I say that because I want the Minister to reflect on that point, and I want the Government to keep in its mind that this legislation leads mainly to intra-platform competition. The local loop is one platform compared with, say, wireless technology. So when we talk about the copper wire in the local loop it is a platform, as distinct from wireless technology, which is another platform. One of the arguments in the past has been that by not unbundling the local loop, we would build stronger competition between platforms—between, say, wireless technology and copper wire—and, therefore, we would advance access to communications technology most effectively.

Having said that, the Government has made the decision to unbundle the local loop, and I hope that a lot of research will be done by our academic institutions on how that affects the advance of communications technology in New Zealand. The interesting issue as we look ahead will be the extent to which it brings focus on to intra-platform competition or, in other words, competition using the technology of the old copper wire, which most telephones and most computers are linked up to, compared with advancing the competition between wireless technology and the old technology of copper wire. The answer to that is unknown.

I stress that National supports this legislation. But we acknowledge, in doing so, that it is unknown what effect this legislation will have on those two hugely important factors in advancing competition in communications technology: whether it will give too much emphasis to competition within a platform—in other words, competition on the old copper wire—compared with competition between platforms. There are, of course, all sorts of issues around the property rights that Telecom had taken off it, but I think those arguments have been and gone, and we have to look to the future. That is why we are prepared to support the Government on these moves. But in acknowledging that, as we look ahead we must make sure that that issue is thoroughly researched in order to ensure competition is most effectively advanced by this legislation, and, therefore, the access of New Zealanders to the very best communications technology is advanced most effectively by it.

The interesting thing about the process of this legislation was that the Government made the decision to unbundle the local loop and, in the bill that it introduced, to try to bring more transparency to Telecom’s operations by requiring an accounting separation, so that people could see quite clearly that competitors were being given appropriate access to the local loop. As it transpires, the select committee has gone much further than that. The legislation that this Parliament now debates is far further down the track of transparency than the original version of the bill envisaged. Beyond having just an accounting separation, this legislation now gives effect to an operational separation of Telecom.

In supporting this legislation, I want to make it clear that National was happy to support the operational separation of Telecom, but that National members drew a line in the sand and said we would not support the structural separation, or the break-up, of Telecom. We insisted that the Government remove that sword from over the head of Telecom, because while the threat of structural separation remains in the picture Telecom’s value is severely compromised. I want to make sure that the Government members of this Parliament realise that this bill provides for operational separation, not structural separation. The Government must not threaten Telecom with structural separation unless it wants to deprive hundreds of thousands of New Zealanders of the value they own in Telecom. If we threaten Telecom with structural separation, we will strip value out of Telecom.

I want to make sure that Government members who have not been involved in considering this legislation are aware of the seriousness of that issue. National drew an absolute line in the sand there. We will support operational separation, but we will not support structural separation. We want members of this House to be fully aware of the potential damage to New Zealand’s biggest company, to our major telecommunications company, if the threat of structural separation is not taken right off the agenda.

Let me make it very clear what is meant by operational separation. The select committee has proposed that Telecom should operate in three sections: one being access to its network services, the second being the operation of its essentially wholesale services, and the third being its other services, which include largely retail services. How we were to give effect to that then became a critically important issue Were we to try to write into legislation the detail of the operational separation? I argued strongly at the select committee, based on my 9 years’ experience as a Minister, about the way that it should be implemented—about the preparation of the operational separation plan.

There was some debate at the select committee about whether the Minister—in other words, the Government—or Telecom should write the separation plan. I argued very strongly, personally, that Telecom should draft the separation plan, because only Telecom knows the detail of how it can be given effect. But the legislation makes sure the Minister has ultimate control over it. The Minister has the ultimate power to make sure the draft plan is written, and the Minister can give directions as to what should go into the draft plan.

Personally I consider section 69AAD, “Main requirements for separation plan”, and section 69AAH, “Preparation of draft separation plan”, in clause 32, to be quite well drafted. I take some credit for arguing strongly as to the balance between Telecom and the Minister in relation to those provisions. I think the balance in the bill is good. Given that the decision has been made to progress operational separation, I think the way the legislation is drafted makes sense. It has the right balance between the requirements on Telecom and the ability of the Minister to have ultimate control over the process.

This is major legislation. National happily supports it, but we want to make sure that members of the House are aware there are unknown issues as we look ahead. We must monitor the competitive situation, to make sure that the interests of all New Zealanders are advanced as far as possible by this legislation.

SHANE JONES (Labour): Kia ora, mōrena, Madam Assistant Speaker. I rise to support much of what Dr Smith has said. However, in my case there will be great content and great brevity, unlike in his delivery.

I must say that the Finance and Expenditure Committee formed a collaborative spirit on this bill and we operated between two poles. The first pole was how does a group of legislators effect better competition outcomes and provide a statutory basis for improved competition whilst at the same time not compromising a pro-investment framework. When we were given the bill, it followed a long list of events of a particular important nature in relation to the calendar of this House. It followed on from the Prime Minister identifying that telecommunications reform would comprise an important part of the work programme. So it is with particular pleasure that I stand as the chair of our committee, having seen the Prime Minister deliver in her speech early in 2006 that the outstanding problem of competition in telecommunications would not sit hovering without being given the overdue attention of the State, and now we stand here passing it.

The officials were of great assistance to our committee. On our committee we are basically generalists. We have had three hefty statutes to shepherd forward and eventually take root in the legislative landscape. The first was the KiwiSaver Bill, the second was the Taxation (Annual Rates, Savings Investment, and Miscellaneous Provisions) Bill that we put to bed last night, and the third was the Telecommunications Amendment Bill. When I say that we are generalists, there is a strong understanding of the importance of getting the balance right between the regulatory stick and ensuring that investors and the business community can go about their activities of pursuing profit, because through profit lies rewards for those people who are prepared to invest in enterprises.

Yes, Dr Smith is right to highlight the fact that the value of Telecom shares took a wee bit of a dip earlier in the year, but it is unfair to label as the culprit for that dip the policy that was leaked, but that was shepherded and brought forward by my colleague Mr Cunliffe. Telecom itself had made a host of investments, not all of which yielded profit. I have no doubt in my mind that the impatience in the market as to how well it was doing was also behind the drop in the value.

But once the bill found its way to our committee, we provided ample opportunity for submitters—a number of whom proved to be very raucous—to come before the committee. We even went beyond the call of duty and enabled an academic to present and run the risk of putting us to sleep at about 9.30 at night. This late hour is reflective of the industriousness of this committee. She rates a mention, although much of the content of her work did not find a great deal of favour with members of our committee, maybe because Bryce Wilkinson, that great friend of the market and opponent of anything to do with regulation, was her mentor. However, her work is referred to in the committee’s report.

The Internet service providers, who are going to really struggle despite the existence of this improved competition framework, had an opportunity to be heard. The incumbent had a second opportunity through being given a private hearing. The committee members took a little stick for that, but we felt that, given the huge amount of commercial worth tied up in the Telecom company, the Telecom people deserved an opportunity to speak candidly with committee members, and vice versa. Obviously, the other players, including TelstraClear, all had an opportunity, and they were challenged by Mr Williamson, who asked them whether they were acting and talking in a manner consistent with their parent company over in Australia. Indeed, Telecom was asked a similar question as to why it was saying one thing in Aotearoa and another in Australia.

So, in all, it proved to be a successful select committee process. I give full credit to the assistance we received from the officials, who, from time to time, have to work with the very creative and, dare I say, haphazard process when politicians are let loose on new policy in a select committee. But it all came to pass. It is a reasonable compromise. We are confident that competition will flow, and investment has not been thwarted. We look forward to lots of the promises that were given to the select committee being fulfilled. We hope we will see an improvement in competition, investment, and infrastructure. I say to all my fellow committee members that we worked well and we have come up with a reasonable compromise. Have a merry Christmas. Kia ora tātou katoa.

R DOUG WOOLERTON (NZ First): New Zealand First, likewise, supports the Telecommunications Amendment Bill. I am pleased to say that we have total agreement in the House, I think. I thank the chairman of the Commerce Committee, the officials who guided us through a very, very technical process, and, indeed, the Minister David Cunliffe, who, as the previous two speakers have said, allowed us to roam more widely than perhaps was the initial intent, and the result is all the better for that. I also mention, right up front, the new chairman of Telecom, Mr Wayne Boyd, who grasped, rather more quickly than others in his organisation might have, that this was a serious matter, that Telecom needed to engage in a very serious manner, and that it is not purely commercial—there is a huge political component in Telecom, given the fact that it alone has access to virtually every house in New Zealand. We as a Government, and as a Parliament, are demanding that it share that access with others, for the benefit of competition—not to share it for free. Telecom, in our view, now has a chance to make a significant business out of the wholesale department—if we can call it that, in simplistic terms—in charging others to access its lines and its technology in order to provide further services and speedier services to homes and businesses throughout New Zealand.

I just make a brief note here that we started with the task of unbundling the local loop, and spoke about it rarely thereafter. We spoke about a whole lot of other things, but, in fact, that was the object of the exercise, and that is what has been achieved at the end of the day. I agree with Dr Lockwood Smith, and the chairman, Shane Jones, that it is a price-sensitive business. It is a sensitive business with regard to the price that is charged for people to enter the loop, and it is a sensitive business not only for the current investors but also for the future investors in Telecom. So it was important that all of the legislation pictured in the future be brought forward and put into this bill, so that once and for all Telecom could have surety, those people whom we want to invest in Telecom would know what they were dealing with, we could have investment at a reasonable rate, Telecom would not have to put a margin on for unnecessary risk, and all those sorts of things.

The Finance and Expenditure Committee also had to deal with the environment, and it had two former Ministers involved in that process, which was quite fortunate. One former Minister came from a National administration and one came from a Labour administration. It is good that we had those Ministers there, because they both felt, in their previous lifetimes as telecommunication Ministers, that they had been hard done by, by Telecom; in other words, Telecom had taken the legislation and proceeded to go around it, over it, under it, and in every other direction, and had not lived up to what the Ministers thought were its responsibilities.

Again, I praise the present Minister by pointing out that it was his intent to ensure, without going too far, that that would not happen again, and right through the select committee process there was that understanding. That is where the present chairman of Telecom understood that in order to atone, if you like—and that is not quite the word—for sins of the past, he had to push his company and his employees rather further than they might have gone on their own. I am sure he did that in consultation with the Minister, I know there was consultation with the chairman, and that is as it should be. We have a better bill because of all that discussion.

As the chairman said, there was some heartache, or grief, or aggravation around the fact that we had the chairman on his own in a so-called private session, but I think it was that sort of approach to the process that produced some understanding, and it was after that meeting that we were able to proceed—quite quickly, in actual fact—to a resolution.

The Minister and Telecom are required to work out all sorts of undertakings together so that the legislation will be completed today. But, in fact, this is just the start of a process that will now not necessarily go behind closed doors but will go from this Parliament to the Minister’s office, to Telecom, to the public, and to users of these systems. I say that because when a matter goes off our table, it is sometimes convenient for us to forget about it, but the Minister and his team will really now just start to engage seriously with Telecom. It is through those undertakings and that process that we will have fair competition in this market, and we will have the sorts of things that the Minister and the Government envisage for this country.

We are a smart country. We need to do things in a smarter way than other people, but we cannot do that if we do not have the smartest technology to work with and, indeed, the ability to communicate with our clients overseas when we come to sell things to them.

So I look forward to those discussions happening within Telecom itself; it is Telecom’s responsibility to come up with the proposals in the first instance, and it is for the Minister to discuss that and to sign those proposals off. That is as it should be, and I am sure we will have something that will work very, very well.

All through the process we were also aware of a share price and share value, and I am pleased to say that at the end of this process, when the report was put out to the public, the share price of Telecom actually went up and has gone up further since then. I know that the senior management team in Telecom has as one of its aims and objectives the regaining of the lost share value that came about because of fears of what the Government may do to this company. In actual fact, those fears have not been realised. The competition that is required by this bill will be fair competition. It will enable Telecom—in our view—to build a wholesale business that it hitherto has not had. I think that share price and that value will be recouped in the fullness of time. We look forward to that.

NANDOR TANCZOS (Green): Sometimes I feel like I have been bashing my head against a jagged rock. It is not just me; so have all of the greenies, environmentalists, “natural capitalists”, ecologists, hippies, climatologists—everyone who has been warning that we are living beyond our ecological means. We have been called weirdos, freaks, and Luddites—and that is just by the members in this Chamber! We have been objects of derision and loathing for saying the things that today are almost self-evident, for saying the things that leaders—political leaders of all shades—are now clambering over each other to claim. Today it is easy to talk about climate change, ecological degradation, the need to protect the environment and biodiversity, and the need to safeguard environmental services; the challenge today is what we are going to do about them.

A good example is air travel. Carbon dioxide emissions from air travel are responsible for 3.4 percent of New Zealand’s emissions, and are growing.

Dr the Hon Lockwood Smith: Doug, your speech must have been so great he didn’t know what you were talking about.

NANDOR TANCZOS: I ask the member to wait and to be patient. Roughly speaking, a kilometre of domestic air travel releases 180 grams of carbon dioxide. So a return trip from Invercargill to Auckland emits half a tonne of carbon dioxide. If we are to start to deal with making New Zealand a carbon neutral country, we have to look at how we can change our behaviour with regard to that kind of thing. That means, of course, doing things like scheduling multiple events on one trip, to reduce the need to get on a plane. But also it requires that we maximise the use of communication technologies such as audio conferencing and videoconferencing. One of the things that the Telecommunications Amendment Bill is about is making that kind of technology more accessible to more people more consistently. It is about allowing New Zealanders to take full advantage of those technologies as they develop, so that New Zealand can remain economically competitive, while ensuring that we are able to protect our environmental sustainability.

The reason why the Green Party supports this bill—and has supported it from its introduction—is that for us it is all about safeguarding environmental sustainability. It is about future-proofing the New Zealand economy in order that we can survive and thrive as a nation in the new environmental realities of the world that we live in. In my first reading speech I said that if we are to reduce our dependence on fossil fuels and make things like telecommuting an actual reality in the day-to-day lives of ordinary New Zealanders, then unlocking the potential of broadband in our telecommunications infrastructure is exactly what we need to do. That is precisely why the Greens see this legislation as vital. As I said, it is about future-proofing the New Zealand economy and making it more resilient in the face of such threats as climate change and peak oil.

If we are to do that, a careful balance must be struck between ensuring that the legislation leaves in place conditions that support continued investment in a rapidly changing technological environment, and at the same time promoting fair competition and affordable access to genuine high-speed broadband. The previous environment simply did not strike that balance. But, of course, we have to be very careful that any interventions we make do not cause unintended consequences. The bill as introduced was a very good start but left some matters unresolved. I think the Finance and Expenditure Committee did a very good job in grappling with those issues and coming up with key recommendations.

As a result of that work, important players in the sector have warmly welcomed the amended bill. The Internet Society of New Zealand has congratulated the Finance and Expenditure Committee on its report back, and particularly on its recommendation of operational separation of Telecom’s network under an independent oversight group. The Executive Director, Keith Davidson, says that having the network separated out from the wholesale and retail arms is absolutely necessary. The network, he says, is the enduring bottleneck, and it needs to be separated.

The committee gave a lot of thought to how best to do that. It was interesting to hear Lockwood Smith tell us all how National had put the hard word on the Government to make sure that structural separation did not take place. It was very interesting to hear him say that, and I think we need to put the record straight. Actually, the whole committee was interested in producing the best outcomes. The whole committee looked at these matters with an open mind and heard the evidence. For National to say that somehow its members were the bulwark for Telecom is simply incorrect. In fact, if I might say so, if it had been left to National, we might not have the separation we are now looking at. Its members appeared much more willing to accept Telecom’s strange second proposal, with its complexity and its inability to achieve the outcomes that we all agreed we were looking for.

The bill did not originally require either structural separation or operational separation, actually. It called for an accounting separation. Although the committee was careful to avoid conducting a direct negotiation with Telecom about the exact form that that operational separation might take, we did outline some of the parameters of it and the process for making a relatively speedy decision. One thing is clear: the need to get the job done so that everyone can get on with it in the new regulatory environment. The parameters that we looked at and recommended include a fixed network access services business unit, one or more business units that must provide a wholesale function for all relevant services, and one or more other business units—and we are talking about the retail side there. The select committee recommended that Telecom must operate these business units at arm’s length from its other business units, and must ensure transparency and equivalence in relation to the supply by Telecom of relevant services. The select committee also recommended the insertion of section 69AAE, in clause 32, which defines the term “equivalence” as being “equivalence of supply of wholesale telecommunications services and access to Telecom’s network so that third party access seekers are treated in the same or an equivalent way to Telecom’s own business operations, including in relation to pricing, procedures, operational support, supply of information, and other relevant matters.”, in relation to its supply of certain telecommunications services.

We did not entirely answer the question of whether we are looking at equivalence of inputs or equivalence of outputs, especially in relation to legacy products. The Internet Service Providers Association of New Zealand President, David Diprose, has said that it “is understandable that Telecom would desire Equivalence of Outputs for its so-called legacy products rather than Equivalents of Inputs. However, Equivalence of Outputs doesn’t give the necessary results and can be gamed to Telecom’s advantage. Equivalence of Inputs, treating all wholesale customers the same as its own ISP, is a key practical requirement to provide competition in the market and to achieve the resultant benefits from end-users.” The Greens encourage the Minister of Communications to require equivalence of inputs, and to further ensure that he listens very carefully to the results of consultation with stakeholders during the negotiations over the details of how that operational separation will work.

I would like to end by making a point that relates to my opening remark that sometimes the Greens feel that we have been bashing our heads against a jagged rock for years. The Green MP Sue Kedgley moved amendments during the progress of the previous Telecommunications Amendment Bill to introduce local loop unbundling. At the time, that did not have the support of the House. But, as with issues of climate change, it has taken a few years for the rest of the House to catch up, and even, in this case—if not in the case of climate change—to go further than the position the Green Party originally put. I think this report is an excellent piece of work from a select committee working on a cross-party basis, and I thoroughly commend it to the House.

TE URUROA FLAVELL (Māori Party—Waiariki): Mōrena, Madam Assistant Speaker. Kia ora tātou katoa. I think it is acknowledged that communications technology changes faster than I have been known to run, which might be a bit of a surprise to some. Just over a decade ago the concept of a teleconference, for example, was so remarkable that new regulations had to be introduced to accommodate the advances of the telecommunication industry. I was looking up the Maori Incorporations Constitution Regulations of 1994 the other day, as one does, and I was struck by the change to the 1969 regulations—clause 126, to be precise—which permits a teleconference of committees of management.

Rodney Hide: I remember it.

TE URUROA FLAVELL: I will give the member a little bit more information. The regulation describes “teleconference” as “The contemporaneous linking together by telephone or other means of instantaneous audio (or audio and visual) communication” of a quorum of the committee. I am sure people remember that.

Today we are also debating new regulatory provisions and, indeed, enhancements to the regulatory process. The bill aims to address issues to achieve the efficient and effective regulation of the telecommunications sector. But there are some key differences in time between 2006 and 1994—and, indeed, 1969—that this bill represents. As I said at the start, we are now immersed in a rapidly evolving telecommunications market. Competition introduces new tensions to the industry so that providers are vying to present the best cost options for fixed line telephone services, for broadband, for mobile, and for call network. We are watching a dynamic market develop that has the potential to provide increased capacity to areas through installing high-capacity transmission systems, through the laying of fibre-optic cable—and that is all great.

Whatever package is being put forward, the improvements to major fixed and mobile investment projects, the capacity of wireless broadband coverage, and the growth of wireless technologies have to be good for New Zealand, even if most seem to be just worried about losing their mobiles. Increasingly, there are more and more New Zealanders who need to benefit from the technology. The census results last week reported that 74.2 percent of households in New Zealand have access to cellphones, and for young New Zealanders the percentage is even higher, with more than 85 percent stuck to their cellphones. We are really pleased that this bill builds on this emerging momentum and sends a very strong policy signal to the two megaplayers, Telecom and Vodafone, that they will be subject to a greater degree of Government regulation.

In this regard there has been failure by successive Governments to step up to the mark. A mass of light-handed regulation has resulted in some fairly dramatic problems—problems that are evident in results such as the fact that we boast the highest mobile rates in the OECD. Well, boast is hardly the word I would use when I am presented with my daughter’s mobile accounts, demonstrating young people’s prolific and accomplished use of mobile technology. Still, we are moving on, and moving on is something that this bill enables New Zealanders to do.

The amendments in this bill seek both to improve the performance of the telecommunications market and to deliver long-term benefits to the end users. It also helps to promote competition. As part of this focus on transparency and access for competitors, and in addition to the accounting separation regime proposed in the original bill, I see that the Finance and Expenditure Committee recommended the introduction of an operational separation regime for Telecom to promote both competition and efficiency. The Māori Party is happy to support this change and the other amendments put forward by the committee.

It is disappointing, however, that the necessary amendments to allow Māori interests to enter the mobile market were not included in this report. The critical issue for tangata whenua interests is around Māori spectrum interests. As I see it, the regulatory focus dominating the bill is on fixed line rather than mobile. As I understand it, fixed-line communication costs in Aotearoa, including ADSL Broadband, are much higher than in most other OECD countries, and it is artificially kept that way. We know that where there is competition for fixed line-costs, customers will achieve lower prices by at least $10 per month, and we support that. But the costs for mobile for both new industry players and customers alike are also kept artificially high, resulting in the highest rates in the OECD, as I commented earlier. I note that a number of the submissions to the Finance and Expenditure Committee pointed out that mobile is not a separate issue.

But the key issue for Māori is that Māori spectrum interests—Hautaki Trust, Econet—are in mobile. Until the mobile issue is sorted, Māori are unable to access the telecommunications industry, and, consequently, unable to access the $3 billion mobile market. The focus on mobile is no random decision. Māori consumers are jumping right over a generation of technology; leapfrogging, if one likes, the copper wire network, and going straight to the less capital-intensive wireless technology, including mobile phones. Anyone who hangs around with our rangatahi will know that most young Māori are relying on mobile phones—mostly prepay—for their communication needs. That is the way of the future. Young people jump from provider to provider, depending on which one has the best offer this month; and that is how it should be.

Indeed, an example in the health sector demonstrates the impact of mobile technology not just as a means of communication but as a site for a new public health initiative. A study reported in the June 2005 New Zealand Medical Journal concluded that a mobile phone - based smoking cessation programme was extremely successful in recruiting young Māori. The programme used regular personalised text messages to provide smoking-cessation advice, support, and distraction, both in English and in Māori, and sourced in Māori tradition; and, importantly, text messaging was free for 1 month. The messages were brief and bold, and to the point, flashing concepts such as change, courage, challenge, action, goal, strength—from one phone to another. I am told it was a very successful idea, and the high Māori participation in the trial demonstrates how accessible, and acceptable, it is to our young.

Today and every day over a million text messages are sent in New Zealand. The Māori Party cannot therefore let the opportunity provided by this bill pass without noting the importance of addressing the mobile market concerns, and in doing so remind the House that such action will allow Māori interest to enter the market. The bill does not deal with the fundamental obstacle whereby Māori still have to buy their way into the telecommunications industry instead of being there as of right, as the Waitangi Tribunal recommended. The tribunal’s report on the radio spectrum found that Māori do have an interest in the management rights to go with the radio spectrum, and that the two partners to the Treaty should have discussions about them. Yet, characteristically, the Crown simply proceeded with legislation to give 100 percent control over these management rights.

We are again in the situation of making the best of a bad deal for Māori. One recommendation that has been put forward to allow Māori to enter the mobile market, has been to create the category of specified services from the Telecommunications Act and move the services listed into the designated services category. Specified services are services where the Telecommunications Commissioner can regulate everything except price. Designated services are services where the Telecommunications Commissioner can regulate everything, including price. As we noted in the first reading of the bill, regulation of everything except price is not regulation at all.

New Zealand’s digital future relies on cost-effective, efficient, and competitive telecommunications infrastructure. The Māori Party will support any initiative to ensure that the New Zealand consumer is being delivered a world-class telecommunications service at the lowest cost and highest quality that a truly competitive market could bring. The telecommunications sector has always been one that directly affects the consumer, yet it is frequently perceived by most people as big companies profiteering at the hands of the small consumer. Our support for this bill is therefore based on our motivation of championing consumers by indicating a willingness to regulate companies if charges continue to increase unfairly or competition is hampered. We are, however, committed to ensuring that the impact of mobile technology, and the way in which it is revolutionised by business and social interactions, must be investigated if we are truly to achieve progress. Kia ora tātou.

GORDON COPELAND (United Future): The explosion of the Internet and the resulting global connectedness that that has brought to the human race is surely one of the great marvels of our age. I for one, as a technophobe from way back, find quite amazing the extent to which we can now, from any given spot on this planet with access to a computer or mobile phone, communicate over vast distances in the blink of an eye. That global interconnectedness is therefore a present reality for New Zealand, not only for its citizens in terms of the way they communicate with one another—family and friends—but also, of course, from the footprint, as it were, of New Zealand exporting industries and other companies to the rest of the world.

Our geographical isolation gives New Zealand a comparative competitive disadvantage in relation to the rest of the planet. We are, within the OECD, officially the nation that on average is the greatest geographical distance from its major markets. Those realities simply mean that when it comes to telecommunications we have to be not at the tail but actually at the head of telecommunication development. We have to be smart, we have to be clever, and we have to be on the pace if we are to stay in touch and develop our society going forward. That is essentially what this Telecommunications Amendment Bill is about. It seeks to ensure that through better competition, better combined technology, better investment, and smarter writing of programs etc., we have competitive telecommunication services at a price that represents world-best standard. As I say, I entirely agree with the Government’s aspirations that we need to be up there in the top half of the OECD when it comes to broadband uptake and other parts of the telecommunication network.

I would like to touch on a few things that have not been covered by other speakers during this second reading. Firstly, I agree with others that the select committee process has been a very, very good process. The Finance and Expenditure Committee picked up very quickly, and I well remember the submission from InternetNZ, what we call the three-box model of operational separation—separation between the equal access network function with an independent oversight group, and the separation of Telecom’s wholesale and retail divisions. New Zealand’s largest single company will now be divided operationally into those three separate sections to enhance competition by basically ensuring that any perceptions of a natural monopoly in terms of the local loop etc. disappear, and we bring free and open competitive Internet markets to New Zealand.

I want also to say that I very much enjoyed the submissions to the select committee by the Telecommunications Users Association of New Zealand; it also brought to our attention some very valid points. In the process, Telecom was also, I think, very good. As others have mentioned, during the select committee process we shifted ground enormously from mere accounting separation in the bill as introduced to now a complete operational separation into those three divisions. With a lot more work to come in terms of the implementation of that through binding undertakings, a draft separation plan, and a final separation plan, I am sure that will keep the Minister and the officials who expertly guided our committee very, very busy in the weeks and months to come. It is vitally important work, and I wish the Minister and the officials all the very best in taking this through to completion.

I want also to convey personally the House’s thanks to the sometimes unsung people in this process, and I refer to the Parliamentary Counsel Office and the drafting that was necessary for this bill. We put the drafters under enormous pressure—not only time pressure but pressure in terms of the complexity of what we wanted to see in the bill. Believe you me, that is not a straightforward process. I remember that at our first meeting with Telecom, its representatives brought along a diagram and circulated it to each member of the committee. I would defy any person who does not have an advanced postgraduate degree in telecommunications to ever begin to explain even one little section of that diagram to a technophobe such as myself. It just demonstrates, I suppose, the sheer complexity of what we are talking about—the number of permutations and other variations that are possible in this whole area.

To be able to sort all that through within the very, very tight time frame that we were given, along with the long hours that the committee put in—including, as others have said—evening sessions, I think was a great tribute to the select committee process of the New Zealand Parliament. I think this is a demonstration of how important the select committee process is to our democracy. It is not common in other jurisdictions for a bill like this to go through such a process. What has emerged at the other end is, I think we would all agree, a vast improvement on what entered the process after the first reading of the bill. As I have said, however, this represents just the beginning of a process that will go on in the weeks and months ahead as those vital undertakings are worked through.

I want to take a moment to talk a little bit about Telecom and its importance to the New Zealand economy. As is well known, the circumstances surrounding the announcement of the Government’s decision to unbundle the local loop were very, very unfortunate. There was a scandalous leak of that announcement to Telecom before its formal announcement, which was originally planned, I believe, for the Budget. As a result, about $2 billion was removed from Telecom’s value at the stock exchange. I think that was going to happen anyway, but it was indeed an unfortunate beginning to the whole matter. But I wish Telecom all the very best for the future. It is important to New Zealand that Telecom remains a strong company. I believe that the bill as presented back to Parliament will allow Telecom to remain profitable and successful going forward. It is not the intention of the bill to bring that to an end. It is very, very important that Telecom does, because the fact is that the copper wire system we have, which Telecom owns in this country, is unique and will probably remain unique for all time to come. It is the only copper wire system we have that goes into our rural areas, for example.

I would like to mention, particularly, Internet services into rural areas. They need to be lifted, and lifted significantly, if we are to maintain the major part of our exporting base, which is still the primary sector, in good shape going forward. I believe that Telecom—and probably Telecom alone in the short term, at least—is the only company that will be able to ensure that that continues. I know that in Australia there has been real concern that Telstra over there has not kept pace with the needs of the rural areas, so I want to put in a plug for that to continue.

I want also to mention, very briefly, property rights—an issue that was brought up by a number of submitters. They brought it to me personally because, as is known, I have a bill before Parliament to introduce property rights into the New Zealand Bill of Rights Act. Can I just say that at no stage was that subject ever brought to the committee by Telecom itself or by the Telecom board. If there was to be an issue about property rights, then I would expect it would be taken up at that level.

I would like to mention also the point mentioned by Te Ururoa Flavell in relation to mobile phone services. It is true that Econet came and made very, very strong submissions to the committee, and it would be fair to say, went on at some length about the fact that Vodafone owned the spectrum and Econet cannot get access to it. I subsequently took the trouble to find out what the situation was and I was told that Vodafone is prepared to sell spectrum to Econet, or other companies, at any time for exactly the same price Vodafone paid originally, and has made this clear to Econet on several occasions. It seems to me that that is a very, very fair offer. I invite the Māori Party to look at that very carefully and simply ask why companies do not actually buy some spectrum from Vodafone and get into certain areas.

I would have to say, though, that I went to a presentation just last week and of course they are now talking about digital radio, digital wireless—this is the new thing that is coming along—and when that happens we will find a whole range of new spectrum opens up, anyway. I think this is a temporary hitch. But I say to Econet, and to others that are involved in advancing Māori interests in this area, to get out there and give it a go, and to not sit back with their hands tied, expecting some sort of handout, because we expect them to exercise the same commercial entrepreneurship as everyone else—something that, indeed, Māori are very good at.

So with those few remarks I want to again thank the officials for their service to the committee. I think we have made a very, very good start. It is not the end of the journey, but it is an important step towards that goal of cheap and competitive telecommunications services for New Zealand—for its families, and for its businesses.

RODNEY HIDE (Leader—ACT): I fear that the ACT party is rising here in the spirit of Christmas and is going to strike something of a bum note. I hear the National Party, United Future, the Māori Party, the Greens, Labour, and New Zealand First all happily agreeing to this bill, yet here we are, a party of just two MPs, and we are opposed totally to it. I hope that in the time I have available I can persuade others to join with me in voting against this bill to defeat it. I consider it to be a terrible mistake.

I always remember when I was studying competition policy and economics at Montana State University, under Professor Ron Johnson, and having explained to me what “blackboard economics” was. It is the idea that we can always pull out a blackboard and come up with an ideal answer to any real world situation that is so much better. We can prove to our own satisfaction, for example, that if we had just one manufacturer of cars in the world, and it made no changes, did not compete with anyone, and just brought out a new car as technology advanced every 5 years, we would gain huge economies of scale, because we would have one company producing the cars for all the world. The manufacturer would not have to compete or spend any money on advertising, and it would not have to be constantly updating new models and trying to sell them to us, because every 5 years it would just bring out a new sedan, a new station wagon, and a new four-wheel drive. In fact, we can prove to ourselves that if that manufacturer did that, it could produce a car for just $3,000—

Dr the Hon Lockwood Smith: Like a Lada.

RODNEY HIDE:—which would be a tremendous achievement; it just requires the Government to regulate and control the economy. Of course, we know that when that happens—and I heard Dr Lockwood Smith call it out—we actually get a Trabant.

So that is what happens when we go from the blackboard to the real world, and this is what so deeply troubles me about this legislation. I have heard MPs saying that telecommunications is a fast-moving industry and that it is so complex that they could not understand the wiring diagram, etc. Then they sat around in a committee and decided to order the largest publicly listed company in New Zealand to split operationally, as though MPs know best how to run that business. I have heard MPs here today saying that this will be good for Telecom because it will be able to compete in the wholesale market and it will be a good deal for the company. I am afraid that I do not share that optimism.

The ACT party opposes this bill for the same reason we opposed the Foreshore and Seabed Bill. When members look at legislation like this, they should always remind themselves of the principles behind it. I have to say that ACT’s opposition to the Foreshore and Seabed Bill was deeply unpopular with its supporters. I am sure that I am out of step with the vast majority of New Zealanders on this Telecommunications Amendment Bill, because everyone wants to sock it to Telecom. We heard from Mr Flavell that his daughter’s phone bill was so high that we should sock it to Telecom. He said that Telecom New Zealand’s prices are high compared with phone charges in other OECD countries, so we should sock it to Telecom. But members should understand that this House is doing exactly the same thing with this legislation that it did with the Foreshore and Seabed Bill—we are pinching people’s rights. We are opposing the legal process, and that has to be wrong.

I would beg Mr Flavell not to go down the route that he was advocating in respect of Econet, because the idea there is that Vodafone has a monopoly in the mobile network, and Econet should be able to piggyback on the back of that. Well, I say “No” to that for the same reason that I opposed the Foreshore and Seabed Bill.

I heard Dr Lockwood Smith say that the Government did not handle it very well, because there was a leak. The Government could not stop someone from leaking information on that policy, because it was breaking all the rules—one man leaked it. Actually, it was not the leak that wiped $2 billion off the value of Telecom shares; there had been lots of leaks and they had not affected Telecom. What wiped $2 billion from the value of Telecom shares was the policy. All that happened was that the leak announced the policy ahead of the Budget, and the loss of that share value definitely would have happened, anyway.

I always enjoy listening to Mr Gordon Copeland, because he always makes a good contribution and he stands up for property rights. He said that United Future is not standing up for property rights in this case, because the Telecom board never raised the matter. But submitter after submitter raised the matter.

Members should understand what this bill does. There is no doubt in anyone’s mind about the legal position of Telecom and its shareholders. They own the local loop. They own that copper wire. They bought it and paid for it, so it is legally theirs. What this legislation does is to take it from them and say that anyone can use it as long as they pay what Parliament or the Minister declares to be a fair price. That is like Parliament opening up Helen Clark’s front porch and saying that anyone can use it whenever they want, as long as they pay their two bob. That would be wrong; that would be overturning property rights. It is the same principle with Telecom.

If we truly believe that there are such benefits to opening up the copper network, we should do so in a manner that is principled, and that would be to buy it back on behalf of the taxpayers of New Zealand or to pay full compensation. Are we seeing that happening? No. It is a straight case of “take it”, with no compensation. Why? The reason is that this House does not believe that the benefits are there, and therefore it is not prepared to compensate the shareholders for their loss. This legislation robs the shareholders of Telecom of their investment. That includes little old ladies’ pension schemes. That is what this Parliament has done. It is doing it here today. We heard Mr Flavell saying that Māori are leapfrogging over the copper wire to the mobile network. Absolutely, they are! That just proves how competitive the industry is, and the future will be wireless and mobile, which also shows how competitive the industry is.

When Richard Prebble was the Postmaster-General or whatever we had in those days, which was not so long ago, he received a memo from the New Zealand Post Office. Do people remember the New Zealand Post Office? This would have been in the 1980s. The memo was advice to the Minister, and it stated: “We do not see much future for the fax machine in New Zealand, because we are perfectly served in this country by telegrams.” The New Zealand Post Office recommended against the introduction of fax machines into New Zealand. Can people imagine that happening now? That happened just a little over 20 years ago. That is how far this industry has moved since then, and it has done that not because of what the Government has done but because people have invested in New Zealand.

What this bill does is put a dampener on that investment, because people invest in New Zealand now somewhat at their peril. I am not crying doom and gloom over this, but I am saying that it does become a factor when people are investing in this small, island nation at the bottom of the Pacific. People could put in billions of dollars to build up a Vodafone mobile network, and Mr Flavell could get the numbers, pinch it from those investors—like we are doing today—and open it up to his mates. That is the danger of this. That is what has happened here. The investment into New Zealand will be somewhat diminished. How does that help competition? It does not. The way to help competition is simple: lower the regulatory burden on business; do not put it up; respect people’s property rights and the fruits of their labour; and have a low flat tax.

I am proud to be in the ACT party voting against this bill. I am shocked that my colleagues and friends in National are supporting it. They are making a terrible mistake.

A party vote was called for on the question, That the amendments recommended by the Finance and Expenditure Committee by majority be agreed to.

Ayes 119

New Zealand Labour 50; New Zealand National 48; New Zealand First 7; Green Party 6; Māori Party 4; United Future 3; Progressive 1.

Noes 2

ACT New Zealand 2.

Question agreed to.

A party vote was called for on the question, That the Telecommunications Amendment Bill be now read a second time.

Ayes 119

New Zealand Labour 50; New Zealand National 48; New Zealand First 7; Green Party 6; Māori Party 4; United Future 3; Progressive 1.

Noes 2

ACT New Zealand 2.

Bill read a second time.

In Committee

Part 1 Amendments to principal Act

Dr the Hon LOCKWOOD SMITH (National—Rodney): I do not intend to take up too much of the Committee’s time on this. There is a matter, though, that I put in front of the Minister in the chair, David Cunliffe. I was reminded of it by Gordon Copeland’s contribution during the second reading, which touched a cord with me as a rural resident. The matter relates to rural telecommunications users.

At the Finance and Expenditure Committee it became a bit of a joke that on my computer at home I have access to the Internet at a speed of 23 kilobytes per second on a typical day. This is so slow that I cannot read PDF files, as I am not home long enough on weekends to download the Adobe Reader—it would take more than all weekend to download it, and I do not want to leave the computer running when I am not there. So I am acutely aware of the problem for rural New Zealanders. In the select committee we were told by Telecom that if this is not handled very carefully, investment in access to the Internet and telecommunications for rural New Zealanders will actually be delayed, as the focus will go into areas of higher population.

A submission that a lot of the select committee members were fascinated by was the one made to us by the Institution of Professional Engineers. What the members of the institution said to us was very significant. They said that unbundling the local loop on its own will not achieve significant improvement of access to high-speed telecommunications. The issue is the physical length of the local loop. It has been discovered recently in most OECD countries around the world that the length of that copper loop is hugely important, and that one cannot deliver really high-speed Internet access over distances beyond 1,800 to 1,900 metres—that is, 1.8 to 1.9 kilometres. If one wants to deliver, say, 5 megabytes per second—remember I talked about 23 kilobytes; five megabytes is many, many times faster than that—and one wants to get up to 90 percent of one’s customers with that kind of access, a copper wire needs to be of no more than 800 metres.

I ask the Minister what the typical length of the local loop of copper wire is here in New Zealand. We were told by the Institution of Professional Engineers that to get that kind of average length for the local loop, one would need an investment of something like $1.5 billion. If one were to try to deliver it with mobile, one would need vast numbers of cell sites. If we want this kind of high-speed access, the length of that local loop is crucially important. For rural New Zealanders it is hugely important. From memory I am about 10 kilometres from my local exchange. So, far from having 800 metres of copper wire, I have 10 kilometres of it. Technologically, the ability of this reform to deliver any improvement in access for me is very limited.

So those are my specific questions to the Minister the Hon David Cunliffe during this Committee stage. What is the typical length of the local loop here in New Zealand? How concerned is the Government about the advice from the Institution of Professional Engineers that local loop unbundling, technologically, cannot deliver the kinds of speeds the Government is looking for? The length of the local loop—of the copper wire—is hugely important. I am interested to know what the Government proposes to do about that. Will it just be ignored? Is there a plan to somehow ensure there is this kind of investment in local loop technology? Quite clearly, with the reform that this bill will bring into being, Telecom will not voluntarily make that investment; Telecom will be investing in areas of high population. What will happen to rural New Zealand?

R DOUG WOOLERTON (NZ First): It is most fortunate that Dr Lockwood Smith has talked about those technological points and has gone through that detail. I want to talk about similar sorts of things, but in more general terms.

In speaking on Part 1, I want to say that this bill allows for competitors to come in and pay a price to access homes and businesses. My concern—and I know it is a concern of Lockwood Smith, Gordon Copeland, and others on the committee—is that they do not do an excessive amount of cherry-picking. I know that Mr Hide believes in a completely unfettered market, but sometimes the market will deliver huge benefits to one portion of the population but virtually nothing to others. I think it is a concern for all of us that we do not have a situation whereby competitors coming into the market just cherry-pick and provide services in the big cities.

It would do the cause of competitors more good if they could show Telecom, the Government, and consumers that their intentions are honourable, and that they intend, having set up businesses in city areas with larger populations, at least to attempt to go out and provide some sort of competition in locations further afield—and to our farmers, who we know produce most of our exports. I make that point because too often we look at a big company and say: “Hey, here is a company that is not performing as we think it should. What can we do about that? We can provide competition because it has not performed as we think it should since its sale as a Government enterprise.” Then we blame it for not doing all of those things. But if we are going to provide that competition—and Mr Hide says that we should—it is then up to that competition to show good endeavours and to seek to do something about our rural environments.

Sometimes the distance is not that far. The Hon Dr Lockwood Smith has talked about 10 kilometres down the road. I know approximately where he lives, but some of the farming areas we are talking about are more intensely settled. For example, I come from the Waikato and I believe that if competitors started in an area such as that they could get a reasonable return and provide a service. If competitors cherry-pick and just go after the good dollars in the cities, they will do their case some harm.

Rodney Hide: Put up an amendment.

R DOUG WOOLERTON: I am not going to put up an amendment. I do not believe it is an area that should be regulated, but I am saying that if those people want to show good endeavours and have the goodwill of customers, they will not do such a thing. I will leave it at that.

TE URUROA FLAVELL (Māori Party—Waiariki): Tēnā koe, Mr Chairperson. Kia ora tātou katoa. I will take just a short call to give a brief explanation in respect of some recommendations that the Māori Party has made and put on the Table. I appreciate the discussion with the Minister the Hon David Cunliffe in respect of looking forward, and hopefully we will pick this up in the future.

The amendments we propose are for a very special, simple purpose. They allow for specified services to be reclassified as designated services. I pointed out in the speech I gave not long ago that designated services are services where the Telecommunications Commissioner can regulate everything, including price. However, specified services are services where the Telecommunications Commissioner can regulate everything except the price. We say that the regulation of everything except price is not actually regulation at all. We make a recommendation to extend the ability to regulate on price and to include not just fixed lines but also mobile services, particularly roaming and relocation, in order to open up that particular door.

For Māori to be able to enter the mobile market these changes are necessary. I simply ask the Committee to give these recommendations consideration as we go through this process. They are spread throughout Parts 1 and 2. Obviously, one piggybacks on to the other, but that is the general gist in respect of our recommendations. Depending on how things go, we would be prepared to pick up these recommendations and enter into discussions with the Minister in the future about this. Kia ora tātou.

Hon DAVID CUNLIFFE (Minister of Communications): Like other members, I do not intend to take much of the House’s time here, but I note Mr Flavell’s submission that he wishes to see the immediate designation of mobile co-location and roaming. These two services are currently specified under the legislation, which means that they are under regulatory scrutiny, but under which no price is set in regulation. The Government could not support amendments to the bill on that matter at this time. There is a very good reason for that. The reason is that the Commerce Commission currently has those two services under review and out for public submissions in a schedule 3 process under the Act. It is due to report on that next year.

It may well be that there is an element of truth behind what Mr Flavell is saying, but that is a matter for the due public process to ascertain. It would be to undermine the role of the commissioner, I think, for this House to legislate over the top of that process. Māori Party members know that my door is open if they wish to make submissions on that matter. Indeed, they could also make submissions to the commissioner.

The question was put that the following amendment in the name of Te Ururoa Flavell to Part 1 be agreed to:

to insert the following new clause:

7A New Part 2 heading substituted

The heading to Part 2 is repealed, and the following heading is substituted: Part 2 Designated Services.

Amendment not agreed to.

The question was put that the following amendment in the name of Te Ururoa Flavell to Part 1 be agreed to:

to insert the following new clause:

9A New Subpart 2 heading substituted

The heading to Subpart 2 is repealed, and the following heading is substituted: Subpart 2 Determinations for Designated Access Services.

Amendment not agreed to.

The question was put that the following amendment in the name of Te Ururoa Flavell to Part 1 be agreed to:

to insert the following new clause:

9B Application

Subsection (1) of section 20 is repealed, and the following subsection is substituted:

(1) An access seeker or an access provider of a designated access service may apply to the Commission for a determination of all or some of the terms on which the service must be supplied during the period of time specified in the application.

Amendment not agreed to.

The CHAIRPERSON (H V Ross Robertson): The remaining amendments to Part 1 in the name of Te Ururoa Flavell are out of order, for they are inconsistent with the previous decisions of the Committee.

The question was put that the following amendment in the name of the Hon David Cunliffe to clause 55 be agreed to:

to insert in paragraph (ce) of section 157(1) after the words “procedures or”, the word “minimum”.

Amendment agreed to.

Part 1 as amended agreed to.

Part 2 Consequential amendments and transitional provisions

The CHAIRPERSON (H V Ross Robertson): We have some amendments to Part 2 in the name of the honourable member Te Ururoa Flavell, and I have to advise the Committee that they too are out of order because they are inconsistent with the previous decisions of the Committee.

The question was put that the following amendment in the name of the Hon David Cunliffe to clause 64 be agreed to:

to omit the words “accordingly to meet”, and substitute the words “according to their”.

Amendment agreed to.

Part 2 as amended agreed to.

Schedule 1 agreed to.

Schedule 2 agreed to.

Schedule 3 agreed to.

Schedule 4 agreed to.

Clauses 1 to 3

Clause 1 agreed to.

The question was put that the following amendment in the name of the Hon David Cunliffe to clause 2 be agreed to:

to omit subclause (2), and substitute the following new subclause:

(2) The rest of this Act comes into force on 22 December 2006.

Amendment agreed to.

Clause 2 as amended agreed to.

Clause 3 agreed to.

Bill reported with amendment.

Report adopted.

Third Reading

Hon DAVID CUNLIFFE (Minister of Communications): I move, That the Telecommunications Amendment Bill be now read a third time. Today is a landmark day for telecommunications in New Zealand. It is a day on which we see the most significant change in the legislative and regulatory framework since Telecom New Zealand was privatised nearly two decades ago. As such, it is appropriate at the third reading of the bill that we reflect on where telecommunications policy has come from, what role this bill plays, and where it is heading henceforth.

This bill is a central part of the Government’s package of measures to assist the New Zealand telecommunications sector to catch up with leading OECD countries, and to keep up once it is there. Combined with the Government’s broader information and communications technology and economic transformation programmes, this bill will promote and enhance competition in telecommunications markets for the long-term benefit of New Zealanders. It will facilitate innovation and investment in telecommunications infrastructure and services, and it will contribute to New Zealand’s transformation to a dynamic, knowledge-based economy and society, underpinned by fairness, opportunity, and security.

It will also pick up the theme introduced by the Green Party, of course. Advanced telecommunications will make a contribution to environmental sustainability, as well, by creating new opportunities to telework and teleconference, and reduce the burden of travel on our environment. So it is all good.

Information and communications technologies are recognised internationally as fundamental enablers of economic, social, cultural, and sustainable development. If New Zealand is to succeed on the world stage, we simply cannot afford to fall behind in adopting advanced information and communications technology. New Zealanders are hungry for the advances and benefits that information and communications technologies can bring and, as a country, we have shown on many occasions our capacity to adopt, adapt, and benefit from technological innovation. The Government recognises the importance to New Zealanders of information and communications technology. New Zealanders have made very, very clear in many opinion polls their support for the reforms being carried through the House today.

The Government’s policy framework was laid out in the Digital Strategy released in April 2005. The Digital Strategy emphasised the importance of progressing in parallel the three key enablers of information and communications technology—connection, confidence, and content. Eighteen months on we can see that that strategy has been a success. Broadband Challenge, the Community Partnership Fund, and a range of other initiatives have been launched under the strategy, but today we tackle those key connection issues that, if not resolved, become the bottleneck on the achievement of the broader strategy.

So it was that in November 2005 I launched the stocktake review of telecommunications, which reported on 3 May to the public. It is probably appropriate at this point to note that in the second reading debate a point was made by a member that the release of that review was under less than desirable circumstances. I agree with that point. Nobody was more shocked or annoyed than I was that a messenger in another department would see fit to breach his employment obligations and transmit a Cabinet paper to a member of the market. That having happened, the Government’s obligations were extremely clear. Upon receiving legal advice we knew we had to make the same information available to the whole market—which we did—after the New Zealand market was closed. That was, as has been proven, the appropriate step to take. As other members have said, any reactions in the market place would have been for a wide range of reasons, including the consideration of previous investments by the incumbent and factors such as the economic rents embedded in the market up to that time.

The public and the sector, on the basis of submissions, have very broadly supported the telecommunications stocktake, the main findings of which were as follows. Historically, New Zealand was, and has been up until now, in the bottom third of OECD countries across a range of telecommunications services and pricing, and about 3 years behind the pack. A factor in our poor broadband performance was the lack of effective competition, and we needed to fix that if we were to get the broadband we needed at prices the public could afford, to facilitate consumers’ demands and our economic growth. I note that Doug Woolerton, in his second reading speech, noted the need to set right what had been wrong in the past, including issues of unfair competition in the sector, and that has been recognised by a range of people.

The Green Party contributed to the debate by pointing out that here was one of those excellent opportunities to do good for the environment, good for our people, and good for the economy, all at the same time. We appreciate that party’s support, and we appreciate the Māori Party’s support for this bill. That party knows that the bill is good for its people and for other New Zealanders. Its members raised some important issues about mobile, and a process is already under way to address those issues. I think we need to respect the proper institutions that are conducting that process, but my door is open to them.

Both New Zealand First and United Future raised the issue of the important balance that is required between sustaining investment in this sector and creating fair competition for high-speed broadband. This bill is extremely carefully crafted in that regard. It follows the OECD and European Union mainstream approach, called the ladder of investment, that gives a reasonable discount for the entry-level services around the unbundled bitstream through something called retail minus pricing. The bill, going beyond that to local loop unbundling, then gives much deeper discounts through cost-plus or total service long run incremental cost lyric pricing, which means there is a strong incentive for entrants to really enter the market, put in some of their own gear, and invest in their own networks, thereby building stronger and stronger competition as their customer bases get a foothold. That is what has worked internationally, and that is what will work in New Zealand. The early evidence since 3 May is that there have been an increased number of investment inquiries in the sector, increased coverage of new players and new technology in the media, and very strong support for the direction the Government has shown.

In the second reading debate the ACT party, the only lonely party to oppose this bill, raised the old saw of property rights. I think this is an opportunity to debunk that approach, once and for all. I commend the Finance and Expenditure Committee, which considered that issue. All parties considered the issue very carefully and in some detail, but ACT said at the end of a long passage in the committee report that it disagreed. Why was that? Well, firstly, I think the ACT party has been a bit disingenuous in saying that this is about old ladies’ pension plans. The fact is that there is a very broad shareholding for the incumbent—but that is not the issue, as most of it resides overseas. The key issue is that regulatory risk is built into the share price of any incumbent telecommunications company anywhere in the world. A telecommunications company has to manage that regulatory risk by not playing too hard in the market to the exclusion of others. That is what Mr Woolerton was referring to when he talked about this bill marking a point of atonement for the past and creating a fair pathway to the future.

Secondly, shareholdings change hands many times. The shareholding of that company has changed hands many times since it was privatised, and as those transactions occur the risks need to be assessed by willing buyers and willing sellers—and they have been. Clearly, at the time of privatisation the Government’s right to regulate the sector was underlined, and that has not changed. So we have discussed, and I think dealt with, those issues. We have dealt with investment issues going forward.

So what happens now? When this bill is implemented, the next stage, as set out in the report from the select committee, will be a process of negotiating undertakings, where Telecom, in consultation with officials, will draft undertakings that will be worked through with the Government, through the Minister. We will end up with an enforceable, binding, robust, three-way operational separation that will require non-discrimination in wholesale markets and fair access to bottleneck and wholesale services. It will also underpin the other pro-competitive disciplines in this bill.

This has been a long and eventful road. The day is a very important day for New Zealand. It is not just about local loop unbundling and it is not just about any separation issues; these are elements of a thoroughgoing raft of reforms that are part of a broader, coherent digital strategy that will bring the benefits of information and communications technologies to all New Zealanders, at the prices New Zealanders can afford.

In closing, I pick up on one important set of issues that remains to be further progressed, and that is of importance to many parties here. It concerns rural telecommunications services. This is not the end of the road for the rural sector; it is the starting point for a new wave of analysis and investment in rural services. We have a rural strategy under way now, we are reviewing the telecommunications services obligations, and this Government pledges to ensure that rural New Zealanders will also benefit from the reforms going forward. I commend the Telecommunications Amendment Bill to the House.

Dr the Hon LOCKWOOD SMITH (National—Rodney): This Telecommunications Amendment Bill that we will pass today is very important legislation. Therefore, we need to be very mindful about its full ramifications and honest about what we hope it will achieve and what it may not achieve. National supports the legislation, despite the fact that the evidence is not all one way on it, because we too hope it will achieve significant benefit for many New Zealanders in improving their access to telecommunications technology.

But we should acknowledge that the evidence is not all unequivocal. One of New Zealand’s foremost academics working in this area gave a very extensive submission to the Finance and Expenditure Committee. That academic, Bronwyn Howell, from Victoria University, is unquestionably New Zealand’s leading academic in this area. Some people may disagree with her views, but she is certainly one of the leading academics in this area. She made a couple of points to the select committee that I want to make sure are on the record in the House. She pointed out to us that our performance in the past has not been abysmal. She said that evidence showed that New Zealand was in a leadership position in the OECD in terms of Internet uptake and usage over the years from 1996 to 2006. She said that far from New Zealand being the dunce in the class, it was actually leading the OECD in Internet uptake.

She also pointed out that at a recent conference in Europe where the issues of local loop unbundling were being looked at, most papers showed that local loop unbundling had caused some quite perverse outcomes and results, and often chilling effects on infrastructure investment. She said that European Union data was showing that there was very little impact of unbundling on broadband uptake. I do not think we should necessarily be too troubled by that, but we should note it, because we should not expect this legislation to produce unrealistic outcomes.

The very last thing that the Minister himself addressed in his contribution to this third reading debate was the position of this kind of infrastructure on rural New Zealand. I was sad that he did not respond to my question during the Committee stage, because the Institution of Professional Engineers raised this issue with the select committee. I think it would be fair to say that all members of the select committee were quite impressed by the submission of that organisation. Let me make it very clear—members of the organisation supported this legislation. It is not that they were not supporting it, but they made very clear to the select committee that we have to be honest about what it will achieve.

They pointed out—as I mentioned during the Committee stage—that, in fact, there is a limit to what copper wire can deliver in terms of high-speed Internet access or high-speed broadband access. They pointed out that the maximum distance—technologically—from an exchange where high-speed access can be delivered is 1.8 to 1.9 kilometres. I asked the Minister what the typical local loop length is in New Zealand. Sadly the Minister did not respond to that.

The Institution of Professional Engineers also pointed out to us that if we want really high-speed, such as 5 megabits per second, we needed a copper wire length of no more than 800 metres—that is, under a kilometre. I pointed out that at home I am a good 10 kilometres from my local exchange—and most of rural New Zealand would be that far from their local exchange. I am not that far from local townships; I am not in the backblocks of beyond. I have a State highway going past my front gate. I am only 150 kilometres from the biggest city in New Zealand—Auckland. So there are very serious issues about rural infrastructure, because one of the major parts of our economy—the primary sector of our economy—is increasingly dependent on telecommunications. This is a serious issue.

When Telecom representatives were in front of the select committee and were asked about what this would do to the balance of Telecom’s investment, they were pretty honest about it. They said it would see the company probably focusing more investment in the more high dense population areas. This is what my colleague from New Zealand First Doug Woolerton, who was on the select committee, expressed as a concern of his during the Committee stage. He hoped we would not see the major investors like Telecom cherry-picking—to use Mr Woolerton’s term. There is nothing in this legislation to prevent that. In fact, Telecom was sufficiently upfront and honest with the select committee to acknowledge that, probably, there will be a bit of a shift in balance of investment.

That is why I am deeply troubled by the position that rural New Zealand remains in following the passage of this legislation, because we know that the length of copper wire servicing much of rural New Zealand will technologically not deliver high-speed access. Although I am encouraged that the Minister referred to that in the final moments of his third reading address just now, I think the Government needs to make sure the impacts of this legislation are carefully monitored. Although I know that some members disagreed with the evidence of Bronwyn Howell, I think it would be foolish to ignore totally what she said.

If members took nothing else from the extensive evidence she put in front of the committee, it would be that there is a need to monitor outcomes because any regulatory legislation like this can produce unexpected outcomes. We know from experience in Europe that some of the outcomes there where local loop unbundling has been put in place have been unexpected and not all as desirable in those countries as those who had been advancing the legislation had hoped.

I make it clear that National supports the legislation. We hope—and we expect—that the outcomes from this legislation will be positive for much of New Zealand. But we also have to be honest about what is driving 5-megabit access to the Internet. Much of it is not data handling, much of it is actually entertainment. Much of it is actually the desire to be able to access video on Internet and that is what requires that kind of broadband access.

Rodney Hide: Porn! That’s what the farmers want.

Dr the Hon LOCKWOOD SMITH: I hear my colleague Rodney Hide calling out there and we know that one of the countries in the world with the highest broadband uptake per head of population—one that stands out—is South Korea, and we all know what has tended to drive that uptake in South Korea. It is certainly not business; it tends to be entertainment of a particular kind.

Darren Hughes: What is the member talking about?

Rodney Hide: Darren’s too young!

Dr the Hon LOCKWOOD SMITH: Rodney Hide says Darren Hughes from Labour is too young to know what is driving some of this Internet access demand. I do not want to waste my time on that kind of debate. All I want to say is that National supports this legislation.

We believe that one of the very important requirements that National wanted is in the bill. It has gone into new section 69AAC—in the interpretation of what operational separation means. It was National members of the select committee who got in paragraph (b) that states operational separation “does not include a requirement that any business unit must be operated by different owners:” That removed that sword of Damocles, if you like, from over the head of Telecom—that this legislation is not a forerunner to full structural separation. We must respect the fact that much of the serious kind of investment that we need in telecommunications infrastructure in New Zealand will come from Telecom—our biggest telecommunications company—and it will not be able to deliver that for us if that threat lies over its head. I am pleased that that bottom line was put in the legislation.

I think the balance of legislation is sensible, but National remains troubled about the position rural telecommunications infrastructure remains in, because all the indications tend to be that this legislation will result in greater focus in the higher populated areas, not our rural areas that are so important to our economy. I hope the Government takes on board the need to monitor the outcomes of this legislation. National will be voting for it.

R DOUG WOOLERTON (NZ First): New Zealand First will be supporting the Telecommunications Amendment Bill and enthusiastically so. But I think it is important to point out the failures that have led to the need for this legislation.

Rodney Hide: Show some enthusiasm, Doug.

R DOUG WOOLERTON: I reassure Rodney Hide that I am highly excited at this point. This is about as excited as I get. So, leading up to Christmas, members had better take a good look because it will have to last a couple of months. If I get any more excited than this, I will not be responsible for the consequences.

However, in speaking to this bill, I say that this legislation is necessary because of a failure, and that is sad. New Zealand First has said on many, many occasions, and made issue of the fact, that we should not be selling our major infrastructure in New Zealand—and we have sold it. In this bill, yet again, we are having to address an issue where the market has not delivered what it should have. To me, that is sad. I think it is unfortunate that Telecom has not reacted to its customers in a proper manner. It has not kept up with technology, it has not delivered what its customers were expecting, it has not delivered what the Government of this country was expecting, and this legislation has become necessary because of that.

In fact, when it was first announced that the Government was to become involved in this issue, a man called Rod Deane, who was the chairman of Telecom at the time, announced that he would resign forthwith because he would not have anybody messing around with his company. Oh dear! I am so sad and sorry about that because that man, more than any other, is responsible for this legislation. He focused on one thing and one thing only—that is, a return to his shareholders and, dare I say it, to himself. This company is not known for low salaries. This company is not known for diligence as far as the customer is concerned. I hope, and I believe, that with a new chairman at the top of this company, we will have a company that is responsive to the market, to what we in New Zealand expect out of a telecommunications company, and to best world practice.

At the end of the day there are no surprises in what has been done to Telecom. I suspect—and the sharemarket shows that this is true—that, in fact, the market was expecting far more to be done to Telecom than has been done, because the market has gone up since these changes have been announced. These changes were based broadly on the British Telecom model. They were based broadly on changes that had happened in England. The Minister and his team have brought them to the House and put them before us for consideration, so we have not been dealing with an unknown quantity here.

The previous operators of Telecom could have put these changes in place in their own time frame and at their own speed, and they could have had them up and running today. In fact, one of the requests from Telecom to us was that we did not insist on expecting too much of what it calls its legacy platform, or legacy services, because the company will have to renew just about all of its technology throughout the country to deliver on the issues required by this legislation. If the previous chairman had been insistent on a free-market model that was actually delivering to the public, that renewal would have been done progressively out of profits and retained earnings as the years went by. So I say that this company previously has not been run as it should have been—never mind the customers; it has not been run in a responsible manner in order to take care of reinvestment in the sort of technology this legislation requires.

Without question, Telecom should be New Zealand’s leading technology company. It is the wish of the Finance and Expenditure Committee, and I know that it is the wish of the officials and the Minister, that it will be so. But, sadly, it has taken this Parliament to drag this company, yelling and screaming, into the 21^st century, and that is sad. It was not until we had a closed-door session with the chairman of the company—to whom I give credit; I have named him several times now and I do so again—and said that he had better engage in this process or otherwise the Government would do it for him. And we had a resolution very quickly after that.

I commend the chairman for that, because he saw what his predecessor and the executives of that company had not seen previously—that the Government had the resolve to make changes because it would not put up with a second-rate telecommunications industry in New Zealand. As has been mentioned by other speakers, with our isolation from markets and our absolute need to communicate with them on a daily, weekly, and monthly basis, telecommunications are essential. We have to be not just as good as the rest of the world but above and beyond the standard of the rest of the world. This company should be—and I hope will be—a company with best world practice; a model of excellence. As I believe in a collaborative spirit, that is the hope I personally have, and that is the hope the select committee has. I know the Minister has that view, and this was the mood in which this legislation was debated in the select committee.

I must say that in view of what the public has seen in the newspapers in regard to this Parliament and some contentious issues that have flowed from it, I wish that the public could have seen the collaborative efforts that went on in the select committee over this legislation—and I know that the same is true for other select committees. It has been a collaborative issue, from the people in the select committee right through to the Minister and officials, and it has been a lesson indeed. I think the outcome will be excellent.

SUE KEDGLEY (Green): I will speak just briefly to say how delighted the Green Party is at the passage of this Telecommunications Amendment Bill, because I have not been working on it in the Finance and Expenditure Committee. But our only regret is that it has taken us so long to get to this point. I cannot resist mentioning that when we were considering the original telecommunications legislation, which established the Telecommunications Commissioner—I think in about 2002—the Green Party campaigned and, indeed, introduced amendments to this House to unbundle the local loop, but we had absolutely no support from any other party in this House. So it is great to see that now everybody else has caught up with the Greens, and that everyone—[Interruption]—except for Rodney Hide and the ACT party—is now supporting what we were advocating and campaigning for, years and years ago. It just shows that once again the Greens are at the forefront, and that we come up with ideas that at the time are dismissed as being radical but a few years later are accepted as being absolute necessity and common sense.

We pointed out then that New Zealand along with, I think, Mexico were about the only two countries in the OECD that had not unbundled the local loop. We pointed out that telecommunications are so utterly vital. They are the new highway in the 21^st century; I think they are what railways were to the 20^th century. But, particularly for New Zealand, with this technology we can transcend our geographical isolation, and so forth. We need to be right at the forefront, at the leading edge, of this technology, and it is incredible that we have allowed a telecommunications monopoly—namely, Telecom—to hold us back for so long. Telecommunications are a key strategic asset in New Zealand that is so vital for our economy, so why did we sit around and allow Telecom, which inherited a monopoly in telecommunications, to exploit that monopoly, to hold back other businesses, to hold back on innovation, and to do everything in its power over many years to retain that monopoly? Instead, as the previous speaker said, the company could have been at the forefront, and it could have embraced change and innovation so that it did not get us to this point.

The Greens really want to give our support to this bill, and also underline the fact that telecommunications are vital in terms of their delivery of environmental benefits. If we finally do start telecommuting on a larger scale, we will not need to build new motorways. Telecommunications have huge benefits in terms of the environmental perspective, as well as in terms of enabling New Zealand to be competitive in the international world. At long last Parliament has caught up with what the Greens have been campaigning for, for about 6 years. We are absolutely delighted to support this bill, and our only regret is that it has taken us so long to get to this point. Thank you.

RODNEY HIDE (Leader—ACT): I do not want to rehash what we covered earlier, but I have to say that one of the things that must concern us as a Parliament is that we know that one regulation invariably means more regulations. I heard Dr Lockwood Smith say that this bill has removed the sword of Damocles from hanging over Telecom, when in fact after listening to that member and to Mr Doug Woolerton, and after watching the Minister assent to their comments, I believe that the sword has been put there again.

Why do I say that? I say that because the first concern raised by Mr Doug Woolerton was about cherry-picking. This is the idea—Heaven forbid—that companies and investors would put their money where they could get a return! Is that not what we expect companies to do? Is that not how we expect them to manage their resources? No, that now becomes, in the language of this Parliament, cherry-picking! Mr Woolerton wants to say that companies should invest their money where the costs are so high that they cannot get a return. Because he lives, like Dr Lockwood Smith, in a beautiful part of New Zealand down 10 kilometres of copper wire, he says everyone else should have to pay for him to have the access that people can get in downtown Auckland. Mr Woolerton says that Telecom should carry that cost, so should the users and shareholders, or otherwise it is cherry-picking.

I was stunned to hear Dr Lockwood Smith of the National Party concur with that—that somehow this Parliament is going to force people to put their investments in that other place. I watched the Minister nod when Dr Lockwood Smith said National would be monitoring the outcomes of this legislation, and I asked myself what we will do if the outcome is not what we expect it to be—which will surely be the case. What will we do if the outcome is less than we expect? It will surely be that. And what will we as a Parliament do if Dr Lockwood Smith cannot download where he lives, on his beautiful farm, at 5 megabytes a second for his entertainment needs? What will we do then? Well, I suspect that in a couple of years’ time we will be back here beating up Telecom again for not doing what Parliament expects it to do.

I say to members in this House that we are making a terrible mistake when we try to regulate for outcomes, when we split up a company, and when we pinch its property rights, because that is what unbundling is all about.

I have a lot of respect for Mr Doug Woolerton. I know he has spent a lot of time milking cows and contributing to this country, and I know how excited he was when speaking to this bill. I have never seen him as animated as he was then. In fact, I wanted to give him some pills to calm him down, because I thought that in his advanced years as a member of New Zealand First he might not be able to access a senior card to the full extent of his entitlement. Mr Woolerton was excited beyond all belief and then went on to make some extraordinary statements. I think, in his excitement, he became carried away with his rhetoric. He suggested that somehow Telecom had not invested enough, that somehow it had not done enough in the way of technical advance, and that somehow it was not running its business right.

I do not know the basis on which Mr Woolerton made those claims. It must be on the basis of his great achievements while working in the telecommunications industry and at the top level of business and merchant banking in New Zealand, which we are yet to hear about. But does Mr Woolerton seriously think that if we had left the New Zealand Post Office to run our telecommunications as a monopoly—and Doug Woolerton would have opposed the sale and deregulation of it—we would have Internet use in New Zealand? It would have banned it! The New Zealand Post Office did not want to have fax machines, because of what they would do to telegrams. I say to Mr Woolerton that the benefits he enjoys today are the result of efficient business, of investment, of deregulation, and of—[Interruption] Whose money did Vodafone use to put in its network? I ask him where that came from. It is not as though the New Zealand Post Office would ever have built a mobile phone network for us to use. My goodness!

So I say to this House that we should oppose this bill. It is a pinching of property rights. It is this Parliament trying to run business. It will be counterproductive for investment in New Zealand and for telecommunications. I am proud to be in the ACT party, and, as I look around the House, I invite others to join with us and vote for property rights, for private contracts, and for free enterprise. I advise them not to join the National Party and vote for communism, which is what is happening here today.

SHANE JONES (Labour): I will take a very short call as chair of the Finance and Expenditure Committee and after having been humoured at the end of the year by Mr Hide, who, I must say, although we have not seen a great deal of him, every time he does turn up—

The ASSISTANT SPEAKER (H V Ross Robertson): The member cannot refer to the absence of another member.

SHANE JONES: I withdraw that remark. Mr Hide’s presence in our committee has been felt as we studied the media to see where he has actually been.

In terms of the bill, there is one thing that was not said and that I need to put on the record, and it is about two former Ministers, Mr Swain and Mr Williamson. Whether Mr Williamson went through some sort of biblical conversion experience, I do not know, but he proved to be potentially the strongest advocate for moving towards a better balance between investment and competition, and obviously, for Mr Swain, was a tower of strength in developing this bill. Whatever misgivings he felt about earlier episodes in his career, they were expunged with the passage of this bill. So both of them ought to enjoy a passing mention so that their names and their deeds are etched into the parliamentary record. Kia ora tātou katoa.

A party vote was called for on the question, That the Telecommunications Amendment Bill be now read a third time.

Ayes 119

New Zealand Labour 50; New Zealand National 48; New Zealand First 7; Green Party 6; Māori Party 4; United Future 3; Progressive 1.

Noes 2

ACT New Zealand 2.

Bill read a third time.

Weathertight Homes Resolution Services AMENDMENT Bill

Second Reading

Hon CLAYTON COSGROVE (Minister for Building and Construction): I move, That the Weathertight Homes Resolution Services Amendment Bill be now read a second time. Firstly, I thank the Social Services Committee, especially its chair, my colleague Georgina Beyer, for the thorough work that she and the committee have undertaken in respect of this bill and for enabling the bill to be reported back to the House before Christmas. I also thank the submitters for their valuable input and feedback on the bill. I take this opportunity to remind the House briefly of how this bill came about and of what it contains, and to summarise the select committee’s recommended amendments.

The bill improves the effectiveness and efficiency of the Weathertight Homes Resolution Service through reform. It is essential to the Government’s commitment to provide a speedier, low-cost alternative to the court system for resolving leaky building claims. The Weathertight Homes Resolution Service was set up in 2002 as a call to arms by the Government to deal with a major problem in our communities. This problem was not caused by any one factor; rather, it was a systemic problem caused by a large number of factors but primarily, and in large part historically, by the deregulation of the 1990s, which let the cowboys into the system and allowed them to run amuck within the building industry. In August 2005 a major review of the Weathertight Homes Resolution Service was undertaken, which found the service wanting in several areas and the process being unnecessarily drawn out by lawyers and other experts.

The bill will help the owners of leaky homes to settle their disputes faster, hold those responsible—that is, the liable parties—to account, and get compensation from those liable parties to fix leaky homes faster. It will also enhance consumer protection for homebuyers. In developing these changes, we consulted widely with organisations, including the Leaky Homes Action Group and the Consumers Institute of New Zealand, as well as building industry organisations and local government. Their collective input, I have to say, was invaluable in developing the policy that underpins this bill.

As I have said, the bill aims to improve the efficiency and effectiveness of each stage within the Weathertight Homes Resolution Service’s process. The reforms include allowing claimants to claim for potential as well as actual damage, more comprehensive assessment reports that can become expert evidence, thereby cutting down legal costs substantially for claimants, and faster resolution of disputes through the introduction of compulsory pre-hearing conferencing for standard claims before claims move to time-limited mediation, plus the fast-tracking of low-value claims. The bill sets the objectives for a less adversarial, more investigative, and swifter adjudication process. The bill introduces new offence provisions, with fines attached to behaviours such as failure to comply with an adjudicator’s order or summons. That will help adjudicators to get on with the job. The bill also seeks to make the adjudication function independent of the Department of Building and Housing. The Ministry of Justice will be responsible for establishing and administering the new Weathertight Homes Tribunal. These measures will enhance consumer and respondent confidence in the adjudication service, improve acceptance of the authority of the adjudicators, and provide more institutional support for the adjudicators themselves.

The bill removes the obstacles encountered by bodies corporate that wish to bring claims for multi-unit apartment complexes, by setting voting thresholds that are not unanimous, so that the so-called hold-out situations are less likely to occur. That is especially important given that around 70 percent of claimants with the Weathertight Homes Resolution Service are unit title apartment owners.

This legislation was introduced to Parliament on 23 August this year and received its first reading on 31 August. The House set a shortened report-back date for the select committee. The committee has met that deadline, and I am grateful for that. I thank members for their effort. The goal of having this bill passed before the end of the year and the reforms in place by April next year was ambitious, but with the support of the committee and this House today, I believe we will get there. Submissions made on the bill represented individuals, consumer groups, insurers, the industry, and organisations that represented many individuals. All of the submitters who asked to be heard by the committee were heard, and there was general support for the majority of changes the bill proposes. There was unanimous support from the select committee for the bill as a whole. However, I will come to some points later.

One change made by the committee was to extend the land information memorandum—or “LIM”—notifications to existing claims. The committee sought to extend consumer protection by including existing claims—not just those claims made after 1 April 2007, as was originally proposed—on the land information memorandum reports. The committee also agreed that the Weathertight Homes Resolution Service will send a notice when a claim is brought, instead of after it has been decided it is eligible. That is the best way to ensure people do not withdraw from the claim process and onsell their property, without disclosure, to unsuspecting buyers. The bill reflects and enhances current practice by territorial authorities.

Other changes include a provision that where a claim is determined to be ineligible under one provision, claimants can withdraw and bring back the claim under the correct provision, provided it is submitted within 1 year. That will help claimants who are close to the 10-year limit for filing claims with the resolution service. Other changes include enabling the Chief Executive of the Department of Building and Housing to access information about mediation settlements for research and evaluation purposes; appointing a registrar for the new Weathertight Homes Tribunal; allowing settlements made by the resolution service to be enforced in the District Court; appointing additional adjudicators to complete any claims remaining under the previous system; and amending the commencement date to 1 May 2007, or earlier, by Order in Council. I have to say that is a backstop provision. The Government intends to meet its commitment to claimants that the enhancements to the resolution service will be implemented by 1 April 2007.

Some additional issues, which were not part of the bill, came up during the select committee consideration and were considered carefully. The committee decided unanimously that the 10-year limitation period, which applies right across the building sector, will remain in place. It decided, by majority, that legal costs should not be able to be claimed under the resolution service dispute resolution process. The committee took on board the comments made by submitters that it should make the bill more accessible in terms of using plain English and grouping related provisions together. To that end, the committee therefore decided that a new bill was needed, incorporating the amendment bill into an integrated new bill.

The Government agrees with all the recommendations of the select committee. The Government is also putting forward Supplementary Order Paper 83, which deals with technical amendments to the new bill to improve its readability, correct minor errors, and ensure provisions are consistent across the various types of claims.

To conclude, the bill as reported back proposes, in my view, a large number of positive changes. Not only will the legislation improve the speed and efficiency with which weathertight homes claims can be dealt with, it will also reduce evidential and legal costs for claimants and respondents, reduce bureaucracy, and be fairer for both claimants and respondents. I again thank the select committee and my colleague Georgina Beyer, the chair of the committee, for the cooperation they showed to ensure the bill met the report-back deadline. With the indulgence of the House we can have it passed today, and thus enacted before Christmas.

Hon Dr NICK SMITH (National—Nelson): This bill does contain some small and useful improvements in the process for settling leaky home claims, but if members believe that this is the solution to this billion dollar - plus problem, they are kidding themselves. I want to recite for this House the appalling record of the Government in dealing with this problem, which is so adversely affecting the life and the biggest investment of thousands and thousands of New Zealanders.

Let us first front up on the issue of just how much the Social Services Committee has changed the bill. Whereas the Minister introduced a bill of 42 clauses, the select committee is proposing, as stated in the commentary on the bill, that it would be better to omit clauses 3 to 39. In fact, the only clause proposed by the Minister to have survived select committee scrutiny is the title clause. That is failure by anybody’s standards, but I am not surprised. If we recite back to the end of 2002, this Government, in a knee-jerk reaction, rushed through legislation passing the Weathertight Homes Resolution Services Act. That legislation never went to a select committee. It was before the House for only 2 weeks, and here we are again, 4 years later, under urgency in Parliament, ramming through legislation to fix this problem. I say to the Minister, the Hon Clayton Cosgrove: “You have learnt nothing.” We know that the first Act was a failure; his bill as much as admits that. So why would he, a second time round, under urgency, attempt to try to come up with another solution and rush it through?

Let us just look at the record of the Government’s Weathertight Homes Resolution Service. To date, in the last 4 years, there have been 3,800 claims. Since Clayton Cosgrove has been the Minister, 184 claims have been settled and there have been 437 new claims. I tell the Minister he is going backwards. Over twice as many new claims have been lodged since he has been the Minister, compared with the claims that have been settled. But the real scandal is this: the average settlement has been just $68,000 for the homeowner to try to fix the leaky home. For each of those settlements the Government has spent $96,000 on bureaucracy, on reports, and on the Weathertight Homes Resolution Service. I say to members of this House that it would have been better to send a straight cheque of $96,000 for each of the claimants than it would be to fund the bureaucracy and the failure of this particular agency.

Then we have this ridiculous game of “pass the hot potato”, within the Government. We have had seven Ministers in 7 years in respect of this problem of leaky homes. We had Mark Burton. He passed the problem to George Hawkins. George Hawkins passed the problem to Lianne Dalziel. Lianne Dalziel passed the problem to Margaret Wilson. Margaret Wilson passed the problem to John Tamihere. John Tamihere passed the problem to Chris Carter. And Chris Carter has now passed the problem to Clayton Cosgrove.

Can anybody in the Government, and particularly the Prime Minister who is responsible for allocating portfolios, tell me how it helps any of these desperate homeowners to have this problem passed from Minister to Minister? But the Government has not stopped even there. The problem has passed not only from Minister to Minister but from department to department. The problem started off as being the responsibility of the Department of Internal Affairs. Then the Government decided that, no, it should not be there, that this problem should be with the Department of Building and Housing. Now the Minister is telling us that the Government is going to pass it on to the Ministry of Justice. Well, I have to tell the Minister that homeowners have had a gutsful of this problem being passed from one to another without solutions, and doing so again will not make any material difference. Then we have, not surprisingly given Clayton’s previous job as a—

The ASSISTANT SPEAKER (H V Ross Robertson): The member must use the Minister’s full name.

Hon Dr NICK SMITH: —given Clayton Cosgrove’s previous job as a spin doctor, the new answer that we are not going to call it a Weathertight Homes Resolution Service any more; it will be the Weathertight Homes Tribunal. Well now, that will solve the problem, will it not? Let us change the name. I tell the Minister that this is an organisation that has been in place for only 4 years, and all he is doing is changing the name, changing the Minister, changing the department, and not providing real solutions.

I will quote for the House from Local Government New Zealand, because in its submission it really does sum up the failure of this bill: “the Bill focuses on process and does not address the legal issues at the end of the claims process around getting the homes repaired. We strongly recommend that consideration be given to the most efficient use of the government’s investment in weathertightness issues to achieve the objective of actually getting the leaky homes fixed. We do not believe that the current proposals effectively achieve this fundamental objective.” Here we have New Zealand’s 85 local authorities saying that this bill fails because it will not get the homes fixed, and in that respect they are absolutely right.

Let us just highlight the latest figures from the Weathertight Homes Resolution Service. I remind the House that this is an agency that this Parliament and taxpayers have provided $17 million a year for. The question I ask is whether we have got $17 million worth of value. The figures have been released. Does the Minister know how many cases have been settled in the last month? We know that there are over 3,000. In the last month nine answers have been provided. If one works out the $17 million a year, that is about $1.5 million a month. So for $1.5 million the Minister has settled nine claims in the last month. That is over $150,000 per case. It is even worse than the record of his predecessor, Chris Carter, when it was costing $100,000 to settle each claim. That is the extent of the failure we have with this bill and with the service.

All the submissions to the Social Services Committee, whether from the Leaky Homes Action Group, Local Government New Zealand, the Registered Master Builders Federation of New Zealand, or the Certified Builders Association—I could go on and on—asked the Government about providing a mechanism that will get the houses fixed, and we have had no answers from the Minister. National, for instance, is sympathetic to the leaky-home owners who actually think that legal costs should be able to be reasonably claimed. I have heard of cases that have been adjudicated with 18 lawyers in the room, representing the developer, representing the builder, representing the architect, representing all the building professionals, representing the insurance companies, and representing Local Government New Zealand. Government members expect, with 18 lawyers in the adjudication hearing, the homeowners to be able to win the argument all by themselves. Well, they are in fairyland. They are on the wrong planet. They are not on the side of those Kiwi-battler New Zealanders who have these leaky homes and need genuine help to get fair and just solutions.

I challenge any member of the Government to explain to this House how any average homeowner is meant to get justice out of a process when lined up against 18 lawyers who are well funded by local government and huge insurance companies. It is simply unrealistic and is not the way forward. We also think there is a real argument to be had around limitation. The reality is that a home is built for 50 years, and to limit the time when the claims can be made is not going to see a fair solution to this. This bill is an indictment on the Government’s resolution service set up in the 2002 Act. It contains a few useful provisions. It is not an answer and, sadly, I can tell the Minister that the House will be debating further changes within a year or two because this bill does not provide the mechanism to fix the homes.

GEORGINA BEYER (Labour): It is a privilege to rise at the second reading of the Weathertight Homes Resolution Services Amendment Bill. As chair of the Social Services Committee, may I acknowledge the general cooperation from all of the committee, frankly, to process this bill speedily. I particularly thank the officials from the Ministry of Justice, the Department of Building and Housing, and the Parliamentary Counsel Office for the intense amount of work they had to do in a relatively short time.

The committee received the bill on 31 August and the closing date for submissions was 6 October. We received and considered 27 submissions from interested groups and individuals, and we heard 23 of those submissions. There was great sympathy as we heard the submissions, particularly those from people who were direct victims of the leaky home problem. The committee was very resolute in its decision to process this bill as quickly and expediently as possible but not by doing a once-over lightly.

It was also an advantage to have on the committee a member, in the form of Paula Bennett, who had actual experience of the leaky home problem. To Ms Bennett’s credit she declared that possible conflict of interest, but it turned out to be helpful to have someone who had that experience, and she brought to bear that particular perspective without it prejudicing in any particular way the committee’s decision. So that was helpful.

The member who has just resumed his seat waxed lyrical—it was a typical filibuster speech from Nick Smith—and highlighted all the problems and issues the Opposition wished to debate, but he gave not one idea as a solution. Perhaps we may be enlightened further on. The basis of what has happened occurred over the 1990s, in particular, and up to recent times. This Government has indeed progressed the issue, no matter what feelings of derision the Opposition may have about slowness. The Opposition may say it is not enough—it is never enough—but it is more than we had before.

One of the important aspects decided by the committee was simply that the bill would supersede the principal Act. The bill as it has been returned to the House will now become the primary Act, as opposed to an amendment to the primary Act. That is quite major, and a lot of work had be done by various officials and the Parliamentary Counsel Office, in particular, to get that rewrite—for want of a better term—completed so that we could process the bill as quickly as possible.

The committee gave an undertaking to submitters, particularly in the final hearing but generally to all, that we would report this bill back by 4 December. Indeed, we happened to report it back a week earlier than that. That, I hope, highlights the commitment the committee had to seeing it happen. All that is left now is to hope that the bill will proceed expeditiously through its Committee stage and third reading, and be completed by the end of today’s session. With that, I thank you.

SUE BRADFORD (Green): The Green Party continues to support the passage of this Weathertight Homes Resolution Services Amendment Bill as it progresses through its final stages in the House today. Although submitters to the Social Services Committee were, on the whole, quite critical of the inadequacies of this and previous relevant legislation, at the same time there was an overwhelming indication that it is better that the Government do anything it can to improve, streamline, and speed up dispute resolution processes on this issue, rather than just leave things as they are. Some of the submissions were quite harrowing, coming from people who had lost everything or almost everything through ending up stuck with an expensive home that had lost almost all of its value, and without recourse to anything like the amount of compensation—if any at all—necessary to fix their problems. I think every member of the select committee, no matter what political party he or she came from, felt tremendous sympathy for such people, of whom of course those speaking to us represented just a tiny fraction.

Over and over I thought back to what it was like in Auckland in the 1990s, and reflected on those massive developments that we saw going up all around us at the time. I will never profess to being an expert on building materials or construction issues, but even so I remember how at the time I was totally suspicious about the nature of so much of what was being built. So many of those new housing developments looked inadequate and shonky, and ill-suited to the wet reality of Auckland’s weather. They were real disasters waiting to happen.

We heard a lot about culpability and blame during the select committee process, and I certainly do not think it can be sheeted home in any one place. Overall it seems, in retrospect, that a big part of this sector in the 1990s was blighted by a blindness to the reality of what construction types and materials work in our climate, and by a drive to profit at any cost in the excitement of a newly deregulated market place. In 2002 the Hunn report named this as a major systemic breakdown across the whole building industry. After hearing the submissions on this bill and the desperation of so many homeowners and local authorities caught out by what has happened, I can only agree. Instead of using the tremendous growth in building developments in the 1990s as an opportunity to learn and put into practice sustainable building techniques for the future, the opposite happened, with results that affected and desperate homeowners are still having to live with today.

Within this context the bill before the House this morning is welcome, with its focus on improving the system for resolving leaky building claims submitted to the Weathertight Homes Resolution Service. The Green Party supports the substance of what is being achieved here, including the goals of reducing the time it takes for claims to be resolved, thereby cutting the costs for homeowners in taking claims; encouraging the resolution of disputes through early negotiation between parties as much as possible—especially for lower value claims—and removing some existing barriers to the registration of claims and resolution of disputes by owners of units within multi-unit apartment complexes. We believe that it is critical that the existing resolution service processes are improved, so that in the end people’s homes can be repaired more quickly and the associated trauma brought to an end with as much speed and as much support for the homeowners as is practicable.

I know that this bill is not perfect, but I think it is incumbent upon the Government to do what it can. A huge range of complex issues were brought out by this bill, and the select committee process was notable for me in being the first time I had seen the situation arise where an amendment to a principal bill was so complex and confused that in the end counsel had to redraft and amalgamate the whole bill into a new Act. On top of that, a number of amendments were made during the select committee process in response to submitters and to the committee’s consideration of the bill, and even further amendments have since been put up by the Minister for Building and Construction, to be dealt with by way of a Supplementary Order Paper today. Some of these changes, which we support, include the extension of land information memorandum notifications to existing active claims already in the system, a requirement for claimants who bring a new claim under different eligibility criteria to do so within 1 year, which provides certainty as well as allowing claimants to extend the period within which they can bring a case, and the provision of clarifying clauses and a useful diagram in schedule 2 to help make the process clearer for all concerned.

When I originally spoke on this bill I was, like many submitters, concerned about the 10-year limitation period, which means that any leaky building claim must be brought within 10 years of the home being built or altered. However, after learning more about this issue during the select committee process, I have come to understand and accept that for the most part there are good reasons for this limitation, including the fact that it is very hard to determine liability after 10 years, that it is difficult, if not impossible, to collect adequate evidence after such a long time, and that it is a provision that already applies to other claims in respect of building work. On top of that, we were told that research and the Hunn report itself show that if there is a problem with a home, it should be showing signs of it well within the 10-year time frame, and that it is actually better for all concerned if people make their claims as soon as the problem appears.

Another big issue for claimants, for which I have a lot of sympathy, is legal costs. It has been, and continues to be, almost unreasonably expensive for people, even comparatively well-off people, to take claims when legal counsel are involved and are up against lawyers representing every other party. My hope is that the simplification and speeding up of processes implemented by this bill will help to reduce those costs markedly, if not altogether—the latter particularly in respect of lower value claims.

One suggestion from submitters in which I was particularly interested was the concept of setting up a special court for building issues, as exists in the UK. I could see a lot of merit in this suggestion, not only for dealing with the ongoing leaky homes crisis but for acting in future as a specialist building disputes service within the court system overall. Although the select committee did not see fit, or feel able, to support that proposal at this juncture and decided to leave the service as a weathertight homes - specific disputes tribunal, I am keen to learn more about this concept of a building court and to work with parliamentary colleagues and people involved in this sector towards a possibility of implementing such a court in future.

In conclusion, like the committee chair, Georgina Beyer, I thank all those who have worked on this complex bill, including my fellow select committee members, and particularly the officials, who put in an enormous amount of work under considerable pressure of time. Above all, I would also like to thank the submitters from all backgrounds who took the time to put together often very useful and detailed input to this legislation, and to express on behalf of the Green Party my sincere hope that the passing of this bill will lead to the achievement of its goals as soon as possible, for the sake of everyone concerned.

TE URUROA FLAVELL (Māori Party—Waiariki): Tēnā koe, Mr Deputy Speaker. Kia ora anō tātou katoa. A couple of years ago a Labour Minister Dover Samuels spoke out about the lack of progress in addressing housing in Northland, Eastern Bay of Plenty, and on the East Coast. I absolutely agree with that member. His comments came following the tragic blaze at Herekino, which claimed the lives of three children. The comments sat in the context of local general practitioners telling of cases where infections such as meningococcal disease were being spread because of sub-standard housing. This was a time when people were living with no flushing toilets, no bathrooms, and no septic tanks. In some homes, toilet waste was being poured straight into the ground, inviting hepatitis A. His comments were based on Labour’s promise to fix 2,500 houses, but over a year later, work had started on only about 250. This was, and still remains today, the situation for too many Māori families.

I know how real these issues are throughout my electorate of Waiariki. Indeed, just last month I visited Rūātoki. I visited houses in poor condition, reflecting low-quality workmanship. Many of them were rotten and leaking. When one house was removed last month it was evident that raw sewage remained. The houses are in a state of disrepair. They have been described as polyurethane Weet-Bix. These are not isolated cases. I am also aware that the community of Waitahanui in Taupō, located in papakāinga housing, has suffered much the same plight as the result of housing being planted on swampland, and the impacts of the low water-table. I know of one family forced to live in their sitting room, due to the mould and the damp in the other rooms.

What does this have to do with the Weathertight Homes Resolution Service? Everything, and nothing. The Weathertight Homes Resolution Services Amendment Bill has everything to do with addressing the leaky buildings crisis. It has everything to do with considering the wider scope of claims for weathertight deficiencies—deficiencies that cause real damage, but as yet there have not been leaks. Sadly, it has nothing to do with the deficiencies and damage that are still very much a part of the lot of those involved in the Māori housing story.

For evidence of that, one need only turn to a report released in August of this year from Charles Waldegrave, Peter King, Tangihaere Walker, and Eljon Fitzgerald. This was a joint collaboration between the Family Centre and Massey University. The report, Māori Housing Experiences: Emerging Trends and Issues, outlines in some 218 pages the following conclusions: “Homeownership rates for Māori are lower than for the general population and have been falling since the 1950s … Overcrowding, substandard housing causing health risks and inadequate heating have been identified as issues in need of attention for Māori. Economic conditions and family structure have affected the ability of households to afford adequate accommodation.”

I come to this bill aware of Standing Order 107 and the need for all debate to be relevant to the question before the House, and I ask this House how any member could possibly ignore the realities of lower-grade housing for Māori when we are considering a raft of proposals to enhance the assessment and resolution of leaky building claims for other New Zealanders.

Let me be quite clear: the Māori Party supports absolutely the objectives of this bill to ensure that departments responsible for administering the legislation will be helpful to claimants. We believe that the public service is honour-bound to provide a service to the public that is efficient, respectful, and responsive. We welcome the specificity of providing guidance and assistance to claimants to help them to understand their assessment reports and to be aware of the advantages of early negotiation, and to make the process faster and less costly. Surely, these are the hallmarks of a transparent and accountable public service—that every effort is made to improve processes and to enhance case management.

We are also pleased that the bill actually tries to do something about the recommendations from the 2002 Hunn report and the 2003 Government Administration Committee inquiry. The Hunn report identified the factors that contributed to leaky buildings, and issued 25 recommendations to address the systemic failures within the building industry. The Government Administration Committee inquiry resulted in some 63 recommendations, notably the significance of the development of consumer protection measures. So all up, 88 recommendations later, we have a substantial body of evidence about the need for speedy, flexible, and cost-effective procedures for the assessment and resolution of claims.

Who could possibly argue with initiatives that try to improve protection for customers, such as is envisaged by placing notices of Weathertight Homes Resolution Service claims on land information memorandum reports, or the fact that the service will provide free assessments to determine the extent of water damage to affected homes, and will provide access to mediation and adjudication services to help resolve disputes? Certainly not the Māori Party, anyway.

We support the establishment of a new Weathertight Homes Tribunal to provide strengthened adjudication services for consumers, and we support the intention for the model of dispute resolution to be based on a more investigative approach. We believe that the proposals seem comprehensive and will do much to clean up the deregulation of the building industry.

But I return to the concerns raised by Mr Samuels—the report I outlined earlier. To put the call—when will one standard of law also apply in the case of Māori housing? The study of housing experiences I referred to earlier builds on four crucial elements: literature review; analysis of census data; analysis of data from the Te Hoe Nuku Roa, a longitudinal study of Māori households; and qualitative field study. The qualitative sample included six regions, involving 70 people and eight focus groups. It was a very strong source of support to provide a basis on which to develop housing options for Māori from now on.

The question we would ask is how this Government can justify spending $76 million on the Weathertight Homes Resolution Service since 2002, yet turn a blind eye to the fact that New Zealanders are squatting in shacks and caravans, that families are squeezed into pensioner flats, and that there are over 2,250 run-down homes on the sub-standard list. The Māori Party housing policy makes an explicit commitment to ensuring that Māori housing experiences and realities are adequately researched and addressed. The study I have referred to in the House makes a significant contribution, we think, towards this goal. We believe that we must engage and encourage Māori participation in order to produce enduring housing solutions. We support the Weathertight Homes Resolution Services Amendment Bill, but we also place on record the urgent and ongoing need to make sure that the issues associated with Māori housing are given the due and serious consideration that they deserve. Kia ora tātou.

PAULA BENNETT (National): Thank you for the opportunity to stand and speak on this Weathertight Homes Resolution Services Amendment Bill. I am the person whom the chairperson of the Social Services Committee was talking about earlier who actually has a leaky home. I start by acknowledging that and by saying that we have chosen not to use the service because the building is a multi-unit. We are taking the matter to the High Court, because we felt that the service was not capable of addressing our needs, and we certainly still feel that way.

Unlike the Minister, I would like to do more than just pay lip-service to the submitters and the thousands of people out there who came to us with personal stories and who stop us in the street to talk about the effect this issue has had on their lives. They are truly the blameless victims. In many cases they have invested everything they had to try to have a home that they could live in and pay their mortgages on. They went forth in all good conscience to do the right Kiwi thing, and now find themselves in financial ruin and absolute emotional distress. They deserve to be acknowledged, and acknowledged properly by this House—not by the tinkering that is currently being done with this bill. This bill does not work for anyone, and we have heard that time and time again. It does not work for the councils and ratepayers, it does not work for the builders, it does not work for those who sell building products and who have got it wrong there, and it most certainly does not work for those homeowners who find themselves in this predicament.

Like my colleague Dr Nick Smith, I was appalled when I looked up the numbers yesterday and found that, to date, only 7.6 percent of claims have been resolved. I stand here and, as politicians, I feel that the few changes that are being made are being done just so that Government members can stand up and say that they are actually doing something. In particular, the Minister can now walk around and say that the Government has tried to fix the issue by trying to speed up the process and trying to make it more efficient. The words that kept springing to mind when I was listening to Sue Bradford give her speech were “I hope”, and I also heard from the Māori Party “We hope”. We hope that this bill does something for the homeowners, but we do not have faith that this measure is what is needed.

It is the sort of thing we have just so that a politician like the Minister can sit there and feel better. People may have seen him on the telly a little while ago, where he squirmed when he was faced with those personal stories of financial ruin and when he was faced with the emotional stress. Now what he has done is to put forward a bill that tinkers around the edges of the problem. It does a little, but it does not do what is needed to be done, which is a lot. This is an “Avoid Bill”; it avoids the realities of what is really happening to New Zealanders, it avoids the total reform that is needed, and it avoids the fact that this legislation is merely tinkering around the edges.

Hon Clayton Cosgrove: Tell us what you’d do.

PAULA BENNETT: We will support it, because we will not play with homeowners. We will not play the political buying, going to and fro. We will find those who are caught in this web by doing the politics within it, so we will support the Government’s amendments, because—like other parties in this House—we hope. We hope that this bill might do something for those homeowners.

Let us deal with some of the facts. The bill wants to encourage parties into mediation. Let us get real! Who would go alone against myriad lawyers and experts? I asked the Minister whether he thought for one moment that councils would not bring along all their lawyers and experts to fight cases—and, in many respects, the councils would be doing their ratepayers a disservice if they did not front up with all those experts and lawyers. And now the Government is asking those homeowners to front up to them alone. The victim does not have the buying power to provide for a balanced adversarial hearing or mediation, and is, more often than not, bullied into accepting a lower than reasonable settlement just to come to a conclusion. The Minister is expecting those people to front up on their own.

What about legal costs? What about the Government fronting up and helping these people so that they can help themselves? How about fronting up with legal costs for those homeowners who need it? I tell the Minister that the action group advises people not to go mediation and not to take their case, because they will not be able to front up on their own and in many cases cannot afford the lawyers to see it through. At this stage we have huge concerns about the adjudicators. Only two of the adjudicators have building backgrounds—all the others have only legal backgrounds. Only two have the knowledge of the industry that is required to make these decisions.

The other question I have is why so many claims are not being pursued. Why are they not being followed through? It is a serious question. Have these claims miraculously been resolved? Have these buildings been fixed? Is that why these claims are going away? Or is it because these victims have no one to claim from? Is it because some of those dodgy builders that the Minister speaks of have closed their businesses, done a runner, and left the victim with a leaky, dangerous home and no one to be accountable for it? The Minister is nodding—he agrees that is the case in many instances. I ask the Minister what he will do about it. What will he do about standing up for these homeowners who need something? The answer is quite simple, is it not? The answer is nothing. The Minister will avoid the real issues facing these homeowners, and do a bit of tinkering around the edges on a bill that he hopes will work.

I feel for the builders and tradespeople who want to be accountable and who want to front up and fix these problems, who were, perhaps, sold products—like timber, cladding, and all that sort of stuff—that were faulty. I feel for those builders who want to do something. We have to be concerned for the councils, who are often left dishing out thousands and thousands of ratepayers’ dollars because they are the only ones standing. What will the Minister do to fix the real issues?

The Greens asked us to please look at a building court. How about we look at a building court? How about we look at addressing the real issues? How about a building court where we do not look at these issues as if they were in the future, where we do not talk about the issues all around the edges, and where we face up to the realities of the billions of dollars needed to fix these homes? The homes, clearly, are not being fixed. The Minister should ask himself the question of who will do the remedial work. Which builders will want to front up and be the ones fixing others’ work that has gone wrong, and then have the checks and balances come in after that?

Of the changes to the bill, let us talk about the land information memorandum notifications to start with. Notifications in respect of claims must be placed on the land information memorandum for the particular property. We had expressed concerns about this issue. We felt that for the owner who is coming in, and for the buyer who wants to purchase a building, there needs to be some form of recognition that there has been a claim against the home. We also had a lot of questions about the limitation period on claims. I personally heard the submissions of people who had very real concerns about that 10-year limitation and whether it would go through. Upon advice from the advisers, who did an outstanding job in getting this through in the time they needed to, it was a number of other concerns—as has already been addressed by my colleague in the Green Party who sat with us on the Social Services Committee—that there was too much, and that we could not go outside that limitation period.

Next I come to the multi-unit claims. This is an interesting issue, in which we have more of the same concerns. The Government would like it that 80 percent of people in a multi-unit—if that is what the body corporate says—have to agree on something before they can take it to the Weathertight Homes Resolution Service. One has to ask how these claimants can get to a place where there is agreement. In my case, for example, there are 87 of us who own apartments within an area. How are 80 percent, even, of 87 of us going to agree on what the costs are? We do not all have the same concerns—not all of the apartments are leaking in the same way, in the same place, or in the same areas—and yet we are expected to agree, and then take our case.

Let us imagine if we did take our case to the Weathertight Homes Resolution Service—which, as I say, we will not. How will this legislation tie up a service that is not meeting the needs of leaky-home owners now, when we see only 7.6 percent of claims being resolved? Now we are throwing in multi-units and the substantial—huge—needs that they will bring before the service. We have huge concerns about the realities of much of this legislation.

The Minister has stood before us and presented this bill. We hope that the new system is faster, we hope that it is speedier, and we hope that it actually lives up to some of the expectations of some of these homeowners. But it will not.

PITA PARAONE (NZ First): Tēnā koe. On behalf of New Zealand First I say that we will certainly support this bill, notwithstanding some of the comments that have been made by people who sound as though they are actually opposing the bill, and yet whose friends—and even the member Paula Bennett herself—will certainly become beneficiaries under this legislation.

There are a number of reasons why we support this bill. Firstly, we heard from a previous speaker that there were 3,800 claims, and that 134 have been settled, but that another 437 new claims have been made. I suggest to this House that it is important to have appropriate legislation that will address that particular issue. We in New Zealand First believe that this legislation will do that. Secondly, this legislation is not about providing obstacles to homeowners but rather about drilling to those who are responsible for this issue. That may include builders, developers, and even architects. Thirdly, this bill is not about poor workmanship but, more essentially, about addressing the use of poor material. We need to make sure that similar material is not used in future.

I also make the point that this bill is not about race, as some earlier comments in this House might have suggested. In fact, if Māori are affected by the leaky homes syndrome, then they have equal access to Pākehā to what this legislation will provide.

Although New Zealand First was not represented on the Social Services Committee, we want to acknowledge the fine work the committee has done. It saw that the original bill needed a replacement, as its report back has recommended. Clauses 3 to 39 will be replaced by new clauses to include all the elements of the bill and everything that is in the principal Act. New Zealand First, as I said, did not have a member on the select committee, but after having read its report we feel confident in supporting the passage of the bill though this House. We are confident that this bill fulfils its aims, which are to improve the experiences of those unfortunate enough to own a leaky home and who are seeking redress and resolution through the Weathertight Homes Resolution Service. The system now allows for a smoother and more transparent system than that previously in operation. I think that the comments made by a previous speaker certainly validate what I have said about that.

The bill addresses a number of issues and I want to comment on one or two of them, particularly in terms of the land information memorandum notifications. The Chief Executive of the Department of Housing and Building and the tribunal will be required to advise territorial authorities of all leaky home claims. It is important that any purchaser of such a home is made aware of this particular issue regarding the land information memorandum notification. Failure to do that will certainly do an injustice to people who are contemplating the purchase of such homes. Of course, there will be no delayed notifications and the information must be placed on the property’s land information memorandum.

We heard comment in relation to multi-unit claims. While I can sympathise with some of the comments made about the difficulty of getting a minimum of 80 percent approval of a particular issue, I say that what the bill has put in place is much better than what was previously there. The important thing is to ensure transparency, accessibility, speed, and simplicity for those who need to use this service, remembering at all times that those people are victims of a system in which this fiasco was allowed to happen.

Comment was made about whether it should be the tribunal system or the court system that is used, and about the fact that some homeowners may not be able to afford legal representation. At the end of the day it is the choice of the individual homeowner to decide whether he or she wants to take a claim to the tribunal or to the High Court. I suggest that those who take it to the High Court will certainly have legal representation.

There are many lessons to be learnt from the leaky homes saga, not the least of which is that we should remember, when deregulating and privatising, that the regulations were put there for a purpose. It was never in anybody’s interest, save for the sharks in the industry, to relax the regulations in relation to the building and construction industry. I trust that this sorry episode in our history is now put to rest permanently.

The commencement dates, as outlined in the bill, are certainly relevant in terms of the comments that have been made in the report. It is important that the effects of this legislation are put into action immediately. I think the suggested start date for the tribunal is 1 May 2007. Although we would have liked the date to be much earlier than that, the actual process of getting legislation into the system will require that sort of time frame.

I also noticed, with regard to the building tribunal, some submitters suggested we should adopt the approach currently being used in Britain. This bill is intended to establish a specialist tribunal that will develop expertise in leaky building cases, so that it can provide relatively timely and low-cost resolution of such disputes.

Paula Bennett: They haven’t got the expertise.

PITA PARAONE: It will have. I am sure that as an affected homeowner, the member would claim to have some expertise on the problem. We are seeking expertise on how to solve the problem.

As to the 10-year limitation period for submitting claims, I say we have to draw the line at some time. I am not sure whether the 10-year period is the appropriate one, but we have to set a time frame or otherwise it may be like Waitangi Tribunal claims. So we have to put in a time frame to be consistent with that.

New Zealand First members have one or two issues we would like to raise during the Committee stage, but suffice it to say that we will support this bill.

JUDY TURNER (Deputy Leader—United Future): I rise on behalf of United Future to speak on the second reading of the Weathertight Homes Resolution Services Amendment Bill. It is a necessary amendment bill. In fact, it is more than an amendment; it is a replacement for the original Act.

United Future supports the bill but, like others in this House, we agree that it is not a cure-all for the matters related to leaky homes. We support the inclusion of relevant information on the LIM report as a positive step, although I looked back over the notes I took during the submissions and saw an interesting suggestion made that the information should go on the certificate of title, based on the fact that very few people actually get a LIM report. There are some ongoing challenges for those with multi-unit dwellings, and this amendment recognises some of those difficulties and makes a start towards dealing with those concerns.

Like others, I want to thank the select committee; it was an enjoyable working process. I would like to thank the submitters, and the officials who gave us advice.

However, the lesson does not go away with the passing of this amendment. The ongoing issues regarding housing design, building methods, and building materials remain. I still remember driving around a new housing division looking at new designs. I have a husband who is a very practical handyman, and he was not as impressed with the new designs as I was. He had some real reservations about what might happen. It sounds as if a lot of people had those kinds of reservations, and we are now bearing the consequences of some very poor thinking in that regard.

In New Zealand, homeownership has always been a bit of an excuse for low levels of saving towards retirement, and that is why the leaky homes problem has been such a crisis for those people affected. I agree with Paula Bennett that it is important during this second reading not to trivialise the suffering of people with leaky homes. Their homes represent their hard work and their future security, and for those people that has been crumbling before their eyes.

The need to deal with future potential damage came up during this amendment bill. Of course, these issues have to be balanced against the normal deterioration of natural products, like timber, in the life of a home. Forecasting is difficult, but establishing damage is absolutely pivotal to the process, and this bill seeks to better facilitate that process.

One of the other issues that comes up in regard to that—and certainly several submitters mentioned this—is the need for better education for New Zealand homeowners about the maintenance of their property. Homes do not last forever but they certainly last a lot better with a regular coat of paint, if that is the material the homeowner has chosen to use, and with some basic practical maintenance being done to them. I think there is very little education, and people often expect much greater longevity from a home than it is capable of delivering.

The issue of making sure homes are properly fixed after the settlement is one that still concerns United Future members. We think that some ongoing work on this matter should be encouraged. Certainly, the Wellington City Council, and a number of the other city councils that made submissions, had ongoing concerns about the fact that their housing stock in their towns, particularly those that had claims made against them, in some cases remained unfixed even after settlement. I think the slowness of the process up to date has contributed to that. It has meant that when people have received some compensation, much of it has had to go towards other bills sustained during the process, like legal costs, and therefore homes have remained either partially or completely unfixed. There is possibly a need to look at the joint fund currently used by local government instead of individual insurance policies being used. There is concern about the fact that that fund is fast running out.

At a later date we also need to reflect on some of the submissions from builders. They said they would like some additional clarity as to when an individual builder can be held to be negligent, as there is still a lack of clarity around that. They also asked that builders be included earlier in the claims process than they currently are. Sometimes they do not even know that a claim has been taken out against a building they were responsible for building. They believe that if they were included they could, firstly, with their knowledge of the building, throw some light on the damage occurring. They also said that if they were included at an earlier date, many of them would want to jump in and get the problem fixed before it progressed, and before there was further deterioration to the building.

I think that a number of matters that came up at the Social Services Committee warrant some further consideration. However, that being said, I believe that this is a move forward in the right direction. It is not a big enough move, but we will support it because of the good it will bring to the process.

Bill read a second time.

Name changed to Weathertight Homes Resolution Services Bill.

Weathertight Homes Resolution Services Bill

In Committee

Part 1 Weathertight homes resolution services

Hon Dr NICK SMITH (National—Nelson): I have a very, very simple question for the Minister Clayton Cosgrove in respect of the Committee stage of the Weathertight Homes Resolution Services Bill. On the bill’s introduction he said that the objective was to speed up the resolution claim process. We know that after the last 4 years it has been a disaster and a flop. We know that of the 4,000 claims that have been made, fewer than 600 have been settled, and that it is costing, on average, $100,000 per settlement and the actual amount that the homeowner is receiving is less.

The test I want to give to the mantle of the Minister is how much difference will this bill make. We know that last year 180 claims were settled and we know that another 500 claims were lodged. So it is going backwards. My simple question to the Minister is how many claims does he think—with this bill passed this year—we will settle next year?

Mark Blumsky: Can he tell us?

Hon Dr NICK SMITH: Could any member of the Government tell us? They say this bill will enable homeowners to get justice, and to get justice more quickly. We believed them in 2002, and we have found that it was a fraud and the bill has been a failure. So I ask the Minister in the chair, Clayton Cosgrove, given that he settled only 180 claims last year, how many he will settle with this new legislation next year.

Mark Blumsky: More or less.

Hon Dr NICK SMITH: Can he give an estimate? A target? We know that 3,000 claims are outstanding. Can the Minister give me any estimate? The silence is deafening. Every member of the Government has his or her head down. Why is that? Maybe Marian Hobbs will answer. I ask her how many settlements she thinks we might get next year. How many of these homeowners might get some justice next year?

Hon Marian Hobbs: I am reading about verbal violence.

Hon Dr NICK SMITH: The member considers it is a joke. It is a very serious question. The Government presents a bill to the House, slams that bill through under urgency, and says that it will address the problem of leaky homes. It is a simple question. How many claims will the Government resolve next year? We know that claims are flowing in at a rate of about 400 or 500 per year. I say to the Minister, at the very least, that if he is to get on top of the problem we suggest that he settle as many claims as are newly lodged—or will 2007 be the same as 2006, 2005, 2004, 2003, and 2002, in that we are going backwards, and more claims are being lodged than are being resolved?

I say to the Minister that by his not answering that question he is effectively saying to those leaky-home owners that this is just another spin job, another fraud, and another delay tactic in trying to avoid, duck, and halt those New Zealanders being able to get justice. I simply say to the Minister that if he is not prepared to test the mantle by actually giving a target to the new tribunal as to what it is to achieve, he is failing. The Government can change Ministers—he is the seventh Minister to have the responsibility in this Government—change departments, and change names, but leaky-home owners need solutions, and the Minister needs to set a target.

I also want to hear from the Minister about this. He is proposing to shift responsibility over to the Minister of Justice. Does that mean Minister Clayton Cosgrove will still be responsible for it? That is a fair question. After May, when the responsibility for the tribunal will transfer over, will Clayton Cosgrove—the Minister who has told the House that this bill is the solution—be responsible, or will we have just another chapter of “pass the hot potato”?

Paula Bennett: They could get another Minister; that would be No. 8.

Hon Dr NICK SMITH: We could get Minister No. 8. I ask the Minister, when the transfer—

Darren Hughes: Almost as many deputy leaders as the National Party has had.

Hon Dr NICK SMITH: I know that member is going to have only 2 more years in the House before Nathan Guy takes him out. Can the member answer for me whether this bill will result in a new Minister being responsible for resolving this problem.

Darren Hughes: We’ve got very good Ministers here. We can pick any one to do it.

Hon Dr NICK SMITH: There we are. We are none the wiser. On the two key issues of how many resolutions we are going to get with this bill and which Minister will be responsible, the Government is absolutely silent. The National Party simply says that leaky-home owners deserve better than this. This Government is continuing to fail them. This is a fraud of a Christmas present for those leaky-home owners.

PAULA BENNETT (National): I would like the Minister for Building and Construction, Clayton Cosgrove, to take a call. It is a very important question that National is putting forward. How many claims does the Minister think will be settled once the changes proposed in the Weathertight Homes Resolution Services Bill have gone through and are implemented next year?

As we say, the current legislation has not been working. That has been evident just in the numbers, if we look at those. As we have previously stated, only 7.6 percent of claims have been settled. Even if those claims that have been withdrawn are added, the percentage is only 20 percent. So National members would be interested to hear the Minister say how these changes will increase the number of settlements, and, more important, how those homes will be fixed. It is one thing to be making more settlements and, hopefully, making those settlements speedier, but how is the Government going to follow through and ensure those leaky homes are fixed?

Hon Clayton Cosgrove: They use the money from the settlement to employ someone to build the house. They use the money. It is simple economics.

PAULA BENNETT: How is the Government going to guarantee that? How is it going to guarantee that that money is—and it is not, at times—actually used for fixing the homes? I know that the Minister is hoping the land information memorandum notification will fix some of that, but National members have huge concerns as to what it will actually do. One of the things that we tried to get through the Social Services Committee was the requirement to have a trail of evidence going through the land information memorandum report, so that if it had to be notified, there would be a trail of evidence that repairs had then been made. Some of that real dilemma is created by retrospectively forcing the disclosure of claims on to land information memorandum reports. What does that mean for those many homeowners who have made claims on the basis that claims would not be disclosed? Has consideration of that been taken?

The other thing I would like the Minister to take a call on—and it is quite a serious question—is what happens if one has had a private assessor’s report done, finds that there is a leak, but decides to sell and not take a claim to the Weathertight Homes Resolution Service. There is nothing in the bill that requires an owner to declare the water entry or the damage in that case. The bill states that that must happen only if a claim has been taken. So where is the protection—if that is what it is really about—for the homebuyer, if the seller has not taken a claim? I would be interested in hearing from the Minister in the chair, the Hon Clayton Cosgrove, who is furiously taking notes—I presume on what we are saying—so that he can address that.

There are so many issues that go on. The simple case is that everyone here is saying that the bill does not go far enough. The Minister himself addressed that at times, saying that it will, hopefully, make the process a bit speedier, but acknowledging that it will not fix the problem. Perhaps the Minister would like to take a call and give people a bit of a heads-up on the changes he plans to make—if, of course, he is still in the job, because we are up to Minister No. 7 looking after leaky homes in just 4 years.

Hon Member: Eh?

PAULA BENNETT: Yes, we are up to Minister No. 7 in just 4 years. He could let us know what changes he may perhaps be thinking of making next year, if he is still in that role—if we are not up to Minister No. 8—to address those very serious issues. Perhaps the Minister could stand up and be counted, and make a real difference for those homeowners. Perhaps he could show them that he actually gives a damn by doing something worthwhile. Perhaps he could put a fund together and make it substantial so that people can see some difference.

Perhaps he could offer an interest-free loan to give those people money so that they can fix the problem. Half the problem, when they go to mediation, is that they do not know how much it will cost to repair the building and do everything; they do not know that until the building starts to be pulled down. They go to mediation saying “We think it’s going to cost X amount of dollars.”, and they may settle and get X amount of dollars, but when the repairs are done they find the price is double that.

They again lose out. They are losing out in not getting legal costs, they are losing out in not knowing how much the repairs will cost, they are losing out because the banks are not lending them money to get the repairs done before they go to mediation, and they are losing out because their homes lose value by the day. They are left holding something that is unfixable, and they have a Government that is not taking the matter as seriously as it needs to.

Perhaps the Minister will take a call about looking at having a building court with real expertise, so that people have one place they can go to get the answers and get their cases heard in a truly efficient manner. Perhaps the Minister can tell those homeowners how he thinks this bill will help to solve their problems.

Hon CLAYTON COSGROVE (Minister for Building and Construction): I just want to take a brief call and, firstly, draw members’ attention to Supplementary Order Paper 83. The primary legislation we are debating today contained, as I said in my previous address, some minor drafting errors that the Supplementary Order Paper seeks to correct. Those minor errors arose in respect of the drafting, and it is important to ensure that the recommendations of the Social Services Committee are integrated, through the amendment bill, into the new Act.

The Supplementary Order Paper contains two parts. The first part relates to Part 1. It sets out amendments required to correct drafting errors and make other drafting improvements; makes an overview of procedural provisions in clause 7 more accurate; makes clearer the definitions, criteria, and provisions on representatives relating to claims in respect of multi-unit complexes; requires statutory declarations for claims under clause 20; ensures that clause 60 treats existing agreements and contracts in the same way as they are treated in the former Act; and removes remaining references to forms prescribed under the bill. None of those changes represent changes in policy from the amendment bill as introduced and considered by the committee. When we come to debate Part 2 I will outline the issues that relate to the Supplementary Order Paper.

I will touch briefly on a couple of points. It is interesting that members of the Opposition raised—colourfully—all the problems and historical issues. I am the first to say that there were, of course, problems and historical issues. Dr Nick Smith himself always neglects to point out one of those issues, and that was the abolition of trade training, which happened in his time in Government when National abolished the Apprenticeship Act.

There was a question in respect of ministerial responsibility. The Ministry of Justice will be responsible for the tribunal function only; the rest of the service remains the responsibility of the Minister for Building and Construction, which is me.

In respect of United Future’s point about the land information memorandums, the member raised the issue about perhaps placing the information on the certificate of title. The certificate of title is about the property itself rather than the building. When a notice is put on the land information memorandum, that is reported and that is the definitive document. We as a department will also be providing a heap of consumer information to folks who are looking to purchase properties. We found that many people—probably most of the members in this Chamber—would check the land information memorandum or instruct their lawyers to do so when they went to purchase a property, but the evidence is that many New Zealanders, under pressure to buy and secure a property, in some cases do not actually instruct their lawyers correctly and do not look at documents in respect of the land information memorandum.

Paula Bennett: How many are going to be settled?

Hon CLAYTON COSGROVE: It is a very interesting point as to how many will be settled. It depends on a number of things. We have a natural justice issue, and it is that under the present law, and once this legislation is enacted, claimants will have the choice as to whether they proceed under their current scheme of arrangement—if they are in the system under the current law—or whether they jump the fence, adjust their claim, and move forward under the new scheme of arrangement. That is up to the claimants; it is not for members to pontificate as to what the claimants’ legal rights and responsibilities are.

I also make this point. I note from all the Opposition’s pontificating, including that of Dr Smith and Paula Bennett, that they are taking free kicks, then accusing the Government of being cynical because we propose a bill to fix the problem.

Hon Dr Nick Smith: It’ll fail. You failed once and you’re failing again.

Hon CLAYTON COSGROVE: I say to that member and to members of the Opposition that throughout the course of the issue I have not politicised it. When I met with John Gray, an eminent New Zealander who will go down in history as a person who does not take a dollar for his services and represents thousands of people who are in strife, I made a commitment to him and others that I would not politicise this issue. Yet here we have a stark difference. The Government has a large bill on the table. There are our policies, there are our solutions, and there are our proposals. Unlike Dr Smith, none of us can see into the never-never land. For every speech that Opposition members stood up today to make—Dr Smith, Ms Bennett, and others in the Opposition—not one solution did they put forward. They threw mud at us, they talked about setting up a fund, but they did not say the fund was their policy. They talked about interest-free loans. Of course, my colleague Chris Carter is putting together now a loans scheme at market rates. It is another solution that we are proposing, and it will be announced prior to the implementation of this bill.

So there was a lot of mud thrown, a lot of invective, a lot of venality, a lot of mean-spiritedness, and a lot of hot air—cynical hot air—as those people got up, but there was not one policy. If they were genuine about helping those in crisis, they would get up and say: “We may disagree with parts of this bill, but here are the solutions we think you should implement to make it better.” Not one solution was offered; it was just the usual National Party hot air. As the members of the Leaky Homes Action Group listen here today, they will judge the debate for what it is.

I am reminded of the words of John Gray in an interview on 9 May 2006—the day I announced the proposals, I think. The reporter said: “Some say Nick Smith’s leaked lifeline is pure politicking.” The reporter was referring to Dr Smith trying to ramp it up and make political capital out of the announcement, instead of actually being critical of it, as he is entitled to be, and providing analysis. Here is what John Gray said: “Yes, it’s a shame that he’s”—that is, Dr Nick Smith—“chosen to politicise the whole process, because the review outcomes are very positive for leaky-home owners, and we are looking forward to the Minister making the announcement in due course.” I gave a commitment to Mr Gray that I would try to help, and I intend to do that, and this Government has done it and will do it in respect of this bill.

But it stands as a stark contrast when we as a Government propose a bill, and propose our policies and ideas, and what do we get from the hollowed-out members on the other side of the Chamber? Zip—apart from a hyperactive member who stands up, waves around bits of paper, turns red in the face as the antennae and hair stand on the top of his head, and gets worked up. Where was his solution, where was his policy, and why did he kill off trade training, which has a direct correlation to this issue, because if one deregulates an industry and provides no minimum standards, and one is not prepared to train professionals to do the job, then that is a recipe for the disaster that a large number of New Zealanders are now feeling impacted upon them?

Those are our solutions. I stand by them, and I believe they will assist those people who need help the most.

The question was put that the amendments set out on Supplementary Order Paper 83 in the name of the Hon Clayton Cosgrove to Part 1 be agreed to.

Amendments agreed to.

Part 1 as amended agreed to.

Part 2 Repeal, consequential amendments, and transitional provisions

The question was put that the amendments set out on Supplementary Order Paper 83 in the name of the Hon Clayton Cosgrove to Part 2 be agreed to.

Amendments agreed to.

Part 2 as amended agreed to.

Schedule 1 agreed to.

Schedule 2

The question was put that the amendment set out on Supplementary Order Paper 83 in the name of the Hon Clayton Cosgrove to Schedule 2 be agreed to.

Amendment agreed to.

Schedule 2 as amended agreed to.

Schedule 3

The question was put that the amendment set out on Supplementary Order Paper 83 in the name of the Hon Clayton Cosgrove to Schedule 3 be agreed to.

Amendment agreed to.

Schedule 3 as amended agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

Bill reported with amendment.

Report adopted.

Weathertight Homes Resolution Services Bill

Third Reading

Hon CLAYTON COSGROVE (Minister for Building and Construction): I move, That the Weathertight Homes Resolution Services Bill be now read a third time. Firstly—despite some of the rhetoric—I thank the House for expediting this bill. I know that those people listening who are affected by this issue will be grateful for that, even though the content of some of the debate may have been less than it should have been.

I thank the Social Services Committee, chaired by my colleague Georgina Beyer. I will now do something that is rare in this House, which is to thank all members on that committee, from both the Opposition and the Government. Although we may disagree on the path forward, hopefully we do agree on the objective being attained, and I thank that committee again for its cooperation in expediting this bill back into the House. The bill as reported back from the select committee contains a number of amendments, which we have debated in the last hour or so, dealing with the operation, or efficiency and effectiveness, of the bill. The committee was under pressure and it had a shortened time frame, and, in order to get this legislation implemented by the stated time of 1 April, it did a phenomenal job of getting it back here.

I also thank the interest groups—the individuals and organisations—who made submissions on the bill. I am aware, despite the hot air of some, of the plight and heartbreak this issue causes and its impact on people’s lives. I visited many of these people. When I visited them, I shut up and I listened to them, rather than pontificate to them. During the review of the Weathertight Homes Resolution Service we listened to organisations and individuals, like Mr Gray and the many thousands of clients whom he represents, who are ordinary people. We listened to what they believed the solutions should be and, of course, we listened to our officials—and I thank my department and the committee officials. We listened to them all and I believe we have come up with a bill that will work.

A house is probably the biggest asset that most New Zealanders will ever have in their lives, and maybe the car is the second biggest. When people have the Kiwi dream of building their dream home or of having it built for them and are then confronted by shonky workmanship, shonky design, and—in some cases, but not in all—councils that have abrogated their responsibility in respect of inspection, and when there is a systemic failure caused historically by having very few minimum standards and having a lack of proper trade training—which this Government has now remedied through putting 9,000 people into trade training, going up to 14,000 next year—what does that all boil down to for the average Kiwi? It boils down to a tragedy. I acknowledge the guts of those Kiwis who have waited for a solution.

As I have said, the Weathertight Homes Resolution Service originally was set up as a call to arms. Yes, there was a bit of a rush about it, but it was done with a good motive to try to find solutions to fix these folks’ tragedies. When one does that I acknowledge that some things are missed. I acknowledge also that the Weathertight Homes Resolution Service, as it sits today, has not worked as it should have. That is why we have taken this opportunity in the House to remedy, I believe, this problem.

This bill is central to the Government’s commitment to actively help resolve the problems of leaky-home owners. In the Committee stage, one member asked how will we do that. Well, it is quite simple. If we can get claimants into the system, have the claims heard, find the liable parties, attach liability to the person who did not do the professional job—because, of course, the taxpayer did not build the house or hire the shonky professional—and get compensation for the homeowner, then, I would say to Ms Bennett, that it is quite a simple thing to get those homes fixed. If people are provided with the money, then they can get in a professional, and we are licensing people to ensure that we do have building professionals. We can sort the wheat from the chaff, the cowboys from the professionals, in the trade.

Hon Member: Deal with the reality.

Hon CLAYTON COSGROVE: If people get their compensation faster, then they will hire somebody to fix the problem. I would have thought that was self-evident; for that member, obviously it is not. The primary objective is to get the cowboys out of the system. That is why we are licensing building professionals, which is an add-on around this bill.

I think that, collectively, these measures will assist people. I believe these measures will get more claims through the system faster, they will drill into those liable parties, and they will get compensation for people so that they can have their homes fixed up and can get on with their lives.

Hon Dr Nick Smith: How many? How many?

Hon CLAYTON COSGROVE: But I do note again, just for the record—despite the twittering from the “grey warbler” across the way there—that it is not a solution proposed by an Opposition, and it is the role of an Opposition to be critical of the Government. I would have hoped that members opposite might have provided a solution, or their view on what they would do, but, sadly, that has been lacking in this debate.

In May this year I announced these enhancements. After a major review during which we listened to stakeholders, we have now kept our promise of passing these measures before the end of the year. Although we have in the legislation a “go date”, if you will, of 1 May next year, the stated objective of the Government—which I believe we will meet—is to have this system implemented and up and running by 1 April.

I thank the Consumers Institute and David Russell. I thank John Gray and his troops. I thank those in the building industry: the master builders; Pieter Burghout and company, the certified guys; and the local government representatives who collectively have all given their views. Yes, we have disagreed on some issues; I accept that. I accept in respect of Mr Gray that we disagree on the 10-year limit. He has a different view on legal costs; I accept that. But I believe—and I acknowledge and respect him for his views—that, collectively, this bill will tackle the problems identified. This bill will assist those that it needs to.

I challenge those who may throw mud at this legislation to get behind the proposal. We all have constituents. Probably every electorate in this country has constituents who have been impacted by shonky design, by shonky building, or by some cowboy dealing to them—not just with leaky buildings, I might add, but shonky building right across the board. I lay out a challenge to members of the House, as a collective of 120-plus members, to put politics aside for once and support this proposal.

Paula Bennett: We voted for it.

Hon CLAYTON COSGROVE: Yes, Ms Bennett voted for the bill and opposed it at the same time, which is a very interesting position and one that people will judge.

I challenge every MP in this House to get behind this proposal, and to go out and encourage their constituents to rock up to this new resolution service, so that we can assist them. We know there are 15,000 people out there. We also know that there are possibly a number of people out there who have not engaged with the service or a court because—as members on both sides have said—they do not have faith in the current resolution service and they do not have the money to go to court. I encourage members to go out into their communities, say that assistance is available, and ask people to give it a go, because I believe it will work. The challenge, of course, will be whether certain individuals can put their political protestations aside and represent their constituents in an appropriate way.

I thank the department and the officials, who have put a hell of a lot of time into this legislation. The Department of Building and Housing is criticised occasionally, as all bureaucratic entities are, and the boot goes in. But the team that has been working on this for many, many months has some of the most passionate individuals that I have seen, and they are passionate because they actually want to help people. Staff in my office have taken phone calls from people, and one of the department’s officials said to me that occasionally people can be heard bursting into tears on the phone because this tragedy has impacted on their lives so much. I thank those officials, because they have put heart and soul into this legislation. They believe in it and they believe that it can work.

I say to those in the communities affected that I believe that this is a sound policy, built around not just what the Government thinks, what I as a politician think, or even what the bureaucrats think, but by working with stakeholders in the community like Mr Gray and his group, and by listening to what they say, what their needs are, and what they would like—what they believe the solution should be. After all, they are the ones standing in the houses or, in many cases, the ones living with their kids in the houses. I believe that we have listened. We have disagreed occasionally, but we have listened.

Overwhelmingly, I believe, we have put in place legislation that at its very base will assist those people and that will, over time, get them out of the situation they are in. I thank members on both sides of the House for their support of this bill, besides the disagreements, and I commend it to the House.

Hon Dr NICK SMITH (National—Nelson): National will support the third reading of this Weathertight Homes Resolution Services Bill, but without the sort of rhetoric that came from the Minister that somehow this will be a solution. Yes, the legislation will provide some small improvements, but in no way is it a solution for the 15,000 leaky-home owners out there.

The Minister Clayton Cosgrove said that National in the Committee stage had thrown mud and been personally derisive. Let us get the record straight—

Hon Clayton Cosgrove: I said you proposed no solutions.

Hon Dr NICK SMITH: Well, let me deal with each of those. We have cited the statistics of his Government’s record. We make no apologies for doing that. When the original Weathertight Homes Resolution Service was set up, the Government said that the problem would be resolved within 2 years. Four years later only 7 percent of claims have been resolved, and we would be derelict in our duties as an Opposition if we did not challenge the Government on that record. I have not referred to the Minister by any sort of derisive term, yet he has called me a grey warbler and made all sorts of other comments. It is typical of Clayton Cosgrove that when he cannot answer the questions he gets personal and he gets nasty.

I have a very simple question I put to the Minister in the Committee stage, and I will put it to him again. In the last year there have been 500 new claims and fewer than 200 settled. If that is the solution, will he tell me how many claims will be resolved in the year 2007?

Paula Bennett: Simple question.

Hon Dr NICK SMITH: It is a fair question. Will he even assure the House that next year there will be more resolutions than new claims? The silence is deafening, because the Government knows that this is a con. You see, this bill changes the department that is responsible for the job. It changes the name of the service. We are now to have not a seventh Minister but an eighth responsible Minister in the term of this Government. I ask the Government how keeping on changing the Minister provides any solution for the leaky-home owner.

I want to point out the appalling legislative process that has been around in dealing with this matter—that is, the Weathertight Homes Resolution Services Act of 2002. It came into the House on 1 November, and became law on 26 November. It was a failure, and even the Minister has accepted that today. Yet today we are being asked to pass 10 pages of law that has never been to a select committee, and that was only tabled in the House today. The Government has learnt absolutely nothing in terms of resolving this issue. A bill was introduced and sent to a select committee, but only two of its clauses have survived—the title clause and the commencement clause—36 of the 39 clauses have been changed, I tell the Minister. If he had done such a thorough and excellent job, what sort of process is that? The process of dealing with this issue by legislation has been appalling. It failed once; it will fail again.

And here is the chronic contradiction for the Minister. He said to the House that he wants the builders, the architects, and the developers to participate constructively in the mediation and settlement process, so that we can fix the houses. He says that the Building Industry Authority and the Government failed in the 1990s, but will the Government now participate in mediation? Will the Government be part of the adjudication process for finding a solution for homeowners? Not on your life! In fact, the Government has spent $6 million of taxpayers’ money on lawyers, going all the way to the Court of Appeal, to eliminate any liability. So this Government is again saying: “Do not do what we do; do what we say. That is, if there is any liability for us, we will fight every step of the way through the courts. We will spare not a dollar in finding the best Queen’s Counsel in the land to avoid the taxpayer having to spend a single penny on fixing one of these houses. But if anybody else is involved, then they should somehow participate.”

National says that that is wrong. We say that there are four parts to the solution. Firstly, lawyers are a part of, and required in, the process, and their fees should be able to be claimed. The Government says no. Secondly, National says that we should spend the money on fixing houses and not on the process. Thirdly, National says that in finding a solution, we should be able to deal with all the problems with homes and not just with the issues of leaky houses. Finally, we say that we want the focus to be on getting results, and the fact that this bill will not work is reinforced by the fact that no one in the Government will give any commitment as to the number of claims that will be resolved in future. Sadly, leaky-home owners will have to wait for a change of Government before this problem is fixed.

PITA PARAONE (NZ First): I am somewhat saddened by the pessimistic remarks that have been made. Although I can understand that from a political point of view those comments may seem justified by those who make them, I think we need to look at this whole bill in a more positive light. I know that my colleague from Te Tai Tokerau the Hon Dover Samuels often talks about Santa Claus at this time of year. I suggest that for a number of leaky-home owners this legislation will almost be like something they would receive under the Christmas tree.

This bill goes towards bringing some resolution to what has been a harrowing experience for the owners of homes affected by the problems of leaky home syndrome. It is a result of the fact that the existing legislation has not been effective enough—hence, this bill. I say that if something is wrong, then we should fix it. To the credit of this Government, it realised that the original legislation was not effective in the way we would have liked it to be, so we have this bill. I want to recognise the select committee for having the courage to recommend to this House that the principal Act be amended in the way that this bill has been presented to the House. The select committee has clearly put a lot of effort into bringing this bill back, and again I acknowledge the intestinal fortitude of the members of that committee in bringing it back in this form.

Whatever we may say, and whatever criticisms we may have, about this whole sorry saga, it is important, and it is incumbent on this House, that we provide an effective resolution of the leaky homes problem. On behalf of New Zealand First, I say I believe that this bill will actually do that. Notwithstanding some criticisms of the bill, we still believe that it is in the best interests of those who own such homes. It is also in the best interests of the territorial authorities that we have a coordinated approach to resolving the issue.

Sitting suspended from 1 p.m. to 2 p.m.

PITA PARAONE: I will not speak for the full 7 minutes still left allotted to me. Suffice it to say that I just reiterate New Zealand First’s support for a really important bill that will go a long way towards providing closure for those whose homes are affected by this sorry saga.

JUDY TURNER (Deputy Leader—United Future): I rise on behalf of United Future in support of the third reading of the Weathertight Homes Resolution Services Bill. As we round off this debate on this important legislation, I think it is important to remind ourselves exactly why this amending legislation came before the House in the first place and what exactly we are trying to address. The first thing is that currently, prior to the passage of this legislation today, it was taking a very, very long time for claimants to resolve their issues. The process had become extremely adversarial. Claimants were under-resourced compared with the respondent territorial authorities and often felt very much on the back foot. The process was costly, with the costs of the process often being higher than the claim itself. A very good example was Wellington City Council, which reported that it had spent $70,000 in court defending itself over a $4,000 claim.

The other problem was that the claims were only for actual and visible damage at the time. There was no provision within the Act to anticipate the ongoing consequences of a leaky home. Lastly, we needed this legislation because there were some huge barriers for people who were in apartment dwellings, in terms of processing their claims. So this bill provides for those people’s class action for multi-unit complexes. It widens the scope so that potential damage—that is, damage that has not yet occurred but is likely to occur—can be covered. It improves assistance for claimants. It also sets up a new process for people who have a low-cost claim, so that it is not too expensive for them. There are new statutory time frames, including a date by which all settlements must be sorted out. A new tribunal is established. The thing that United Future is very pleased about is the better opportunity for prospective homeowners to receive information about the weathertightness history of the house they are about to buy.

So as we end this matter, we have to ask ourselves whether this is the end of it. Others in the House today have said they hope it is; I have to say that I suspect it is not. Although many of the ongoing issues that United Future would like to see addressed may fall directly under this legislation, we would like to see the Government move to provide better education for homeowners around home maintenance. I think we need clearer boundaries around areas of responsibility for all those who feature in the housing industry, from local councils, real estate agents, builders, plumbers, and other housing-related trades, architects, inspectors and assessors, legislators, and those who set standards and codes. Although we welcome the chance for claims to be settled in a timely way, we do caution the House to remain watchful to make sure we do not end up with an unacceptable forced settlement process that would further victimise homeowners of leaky homes. We are happy to support this third reading.

Bill read a third time.

Third Readings

Hon PETE HODGSON (Minister of Health): I move, That the Epidemic Preparedness Bill, the Health Amendment Bill, the Immigration Amendment Bill (No 2), the Parole Amendment Bill, the Sentencing Amendment Bill (No 2), the Social Security Amendment Bill (No 2), and the Summary Proceedings Amendment Bill (No 2), be now read a third time. I want to make my comments briefly. It may be that there will be relatively few speakers in the third reading debate on these bills, but this concludes a process that has been a cross-party process—one that I think has shown that when there is a threat to this nation the parties of this House can act together, and can act together sensibly, to good effect.

I therefore want to thank again the chair of the Government Administration Committee and its members, who deliberated on the legislation. Also, I thank again the Law Commission, and especially Sir Geoffrey Palmer. As well, I would like to thank those who made their submissions on this legislation, members of Parliament across all parties, and, indeed, officials, the Clerk’s Office, and all those who have worked on what has been difficult but necessary and important legislation—legislation that now finds itself divided into many bills.

SHANE ARDERN (National—Taranaki-King Country): I thank the Minister of Health, Pete Hodgson, for his comments. This was difficult legislation for any select committee to have to deal with. The process was one of those rare occasions where Parliament worked in a totally multi-partisan way. There were no politics. It was difficult to find the politics in this legislation. I also thank the other members of the Government Administration Committee, who spent numerous hours going through what at times were tedious recommendations and suchlike from various organisations. I thank the staff of the committee, the Clerk’s Office, and all those involved. Certainly, I thank the officials from the Minister’s office, who were very articulate in the way they presented the issues to us, but were equally good at listening to the concerns of the committee, then going away and coming back with alternative recommendations. I know that at times the parliamentary staff found the job quite difficult, particularly parliamentary counsel, and I thank them for their efforts. Sir Geoffrey Palmer and the Law Commission spent time going through some of the anxiety the committee had around the executive power we were giving to whoever is in Government in relation to this legislation.

The legislation is potential law that we hope will never be needed, but if we look at history, I think it is easy to conclude that at some stage in the future it will be. In 1918 New Zealand had an epidemic the likes of which would trigger this legislation. Again, in the 1950s, a similar event occurred, although it is not as well-known as the 1918 flu epidemic, and there have been numerous other examples around the world. We all know the concerns worldwide about avian bird flu, which as yet has not gone from one species to another species. According to scientists it is only a matter of time before it does. So something was necessary, and it is only prudent to plan for such an event.

The select committee spent some time on what is now clause 5 of the Epidemic Preparedness Bill, which empowers the Prime Minister. In fact, a lot of debate took place around what should be done in respect of how to trigger a pandemic notice and have it gazetted, and who should make that decision. In the finish, the committee came down on the side of the Prime Minister being the principal person who would make that decision, having first been advised in writing by the Director-General of Health, and having the support of the Minister of Health. The committee, to try to bring balance to that executive power, then looked at how the House could be involved not only in ratifying any decisions post the event but in planning for such an event. It came out with the final recommendation that the House should be notified as soon as possible and practical after such a gazetted notice of a pandemic, and where practical and possible the House should be recalled—not necessarily in Wellington, if that was deemed to be unhealthy or unwise. The Governor-General currently has the power to decide where Parliament sits, so the committee decided that that was a reasonable balance.

During the discussions the other issue that arose was that of what would happen if there was such an event after Parliament had been prorogued, and therefore we were in between Parliaments so to speak—either during an election campaign cycle, which may not be able to take place as the result of the pandemic, or after an election, when the result was known but the new Parliament could not meet due to the pandemic. It was decided that further work needed to be done. I was heartened by the Minister’s comments in the first reading debate that the ministry was going to look at a way forward.

The committee also asked whether there were any Standing Orders that would need to be amended, and we were informed that there were. In fact, the Regulations Review Committee spent some time looking at that. We have been informed that that will take place at the earliest opportunity. The committee was reasonably comfortable that we had arrived at a place where we had struck a good balance between the amount of executive power that would be necessary for the Government to manage a pandemic of some sort that had the potential to disable large parts of New Zealand, to cause the deaths of thousands of people, and to disrupt the economy and general business, and the checks and balances on that executive power, which are needed anywhere, through a parliamentary process. I think we have the legislation about right. We will never know, until it is tested. I hope it is not in my parliamentary time. I hope it never happens, but, I guess, that is wishful thinking.

Certainly, when the legislation is tested, the media will take an interest in it. There has been a deafening silence from those who would normally have a view on this kind of thing. Throughout this process there has been overwhelming media publicity of the work the select committee has done! I am not sure how the members of the committee can cope with the publicity we have had! However, I am sure the media would be immediately interested in who was on the committee and what had been decided, in the event that a pandemic did take place.

This legislation is one of those rare occasions when Parliament has worked together. The public often screams—after watching 30-second sound bites of the most dramatic bits of what happens in here—about the childish and nonsensical way that this place operates. Now we have an occasion where Parliament has worked together, and I guarantee that there will be columns written in all the major papers, that the legislation will have at least 15 minutes of television time, and that the media will pay attention to it like nothing else!

With those few words, it is my pleasure to support this legislation. I hope the legislation is able to achieve the goal that is set out for it to achieve.

KEITH LOCKE (Green): The Green Party will be supporting the third readings. I sat on the Government Administration Committee for the purposes of this legislation, even though the Greens are not normally represented on that committee. The reason I sat in was our concern that the powers being granted to the executive branch were, perhaps, excessive in the situation. As the legislation proceeded through the select committee, it was very good to see the way in which the input of so many people was considered—input from the select committee people themselves, from Shane Ardern, who chaired the committee quite well, from Ministry of Justice and Ministry of Health people, from human rights people, and, of course, from Sir Geoffrey Palmer, who has been mentioned, from the Law Commission. All their input was considered, and the views of the officials evolved.

This legislation changed in the select committee stage probably more than any other legislation I have ever seen in Parliament. That happened through a consensus process that ended up with a unanimous vote, and it is a tribute to the workings of Parliament. What was done was that all the controls in terms of advance regulations were brought in—a stepped-in process of the controls in the legislation as the threat of a pandemic increases, and the stepping out from those controls as it recedes. A whole lot of things were built into that process, including, as Shane Ardern just mentioned, the parliamentary supervision process, the calling together of Parliament, making sure members of Parliament have the right to challenge any regulations—those that were not arranged in advance through the regulatory process prescribed but brought in at the time of the pandemic and that were to go through a proper regulations review system. At the outset it may have been thought that because a pandemic hits so fast, so dramatically, a lot of those things might have to go by the board a bit. But I think we worked it out, after due consideration, that we can have a process. Of course, the process is difficult when a pandemic is operating, but it can work.

The other thing that Geoffrey Palmer brought to our attention, which really struck me, was how in some ways we are ahead of many other countries in world in how we have dealt with this threat, because a lot of other countries deal with such emergencies under generic legislation. Geoffrey Palmer, from the Law Commission, mentioned in his paper the United Kingdom’s Civil Contingencies Act 2004. He mentioned the positive side of that Act in terms of Parliament being called together to look at regulations made under that Act. But the other side of that legislation, which is not quite so positive compared with what we will have, is that it covers so many different types of emergencies—threats to human welfare, which can be in the areas of health, transport, communications, energy, water, and food; threats to the environment; and threats such as terrorism—all bundled up in one Act, and we can see there the potential for the executive to exert power across a number of fronts relatively unrestrained. So I think our legislation is much superior to the approach taken by some other jurisdictions, and we can be proud of that.

The other thing I would like to say, from a Green perspective, is that although we think such legislation is very necessary and that it is important for the executive branch and Parliament to have the powers worked out collectively to loosen certain laws because of people being unable to get around to fulfil certain legally prescribed functions during a pandemic—although that can operate at the national level—the real success of what we do as a country will depend on how well we work together at the community level. I think that is relevant to what Shane Ardern said earlier when he talked about publicity and the population’s knowledge both about what the Government might be doing and about pandemics as a whole. The community has to be a bit engaged with that prior to the pandemic breaking out, because with such a threat there will be a bit of panic if people think that coming into contact with an infected person might put their lives and the lives of their families in danger. There will be the stress of families divided—families who may have some members overseas who are not able to return—and all the anguish that that breeds. So calm people, like teachers, who are used to dealing with large numbers of kids, and doctors and nurses, who deal with large numbers of people in the community, will have to be geared in.

We will have to work as a community to reduce the cross-infection that might take place, but, on the other hand, keep the society going. Keeping the medical system going as much as possible, keeping our families together, working out ways of people getting goods, shopping, without too much cross-infection occurring, etc., will be a challenge. I think we as MPs have a role to play in linking what we might be doing at the national level, and what the Government and Parliament might be doing at the national level, with what is being done at the local level, which is where the dangers of a pandemic are being confronted. The Greens are supporting this bill.

TE URUROA FLAVELL (Māori Party—Waiariki): Tēnā koe, Madam Speaker. Kia ora tātou katoa. Some debates in this House are concerned with nothing less than life and death decisions. The series of seven bills under final consideration here, which impact on the preparedness of the nation to face the onslaught of an epidemic, is exactly that. The Māori Party recognises the heavy responsibility this Parliament brings to bear, when we take into account the inevitable and disproportionate impact of an epidemic on Māori. The association with Māori of “epidemic” is one that is far too frequently made.

A month ago, Professor Martin Silink, head of the Brussels-based International Diabetes Foundation, told an international conference that the diabetes epidemic could wipe out Māori and Polynesian Islanders by the end of the century. And there is the meningococcal disease, which has been categorised as an epidemic since 1991, with demonstrably more adverse impacts on Māori and Pacific populations.

Dr Lis Ellison-Loschmann, who has been following the work of the Māori Asthma Review, has described asthma mortality rates for Māori as reaching epidemic rates in the 1970s and 1980s. Dr Neil Pearce has also described the major medical controversy around the asthma drug fenoterol, which some 15 years ago caused an epidemic of asthma deaths.

The significant and growing ethnic and socio-economic inequalities in lung cancer mortality in New Zealand, and the relatively high lung cancer incidence and mortality, particularly among Māori, mean that lung cancer has been reported in the New Zealand Medical Journal as an epidemic. The Workshop on Obesity, Food and Policy: New solutions?, held at the University of Auckland on 16 November, talked about an obesity epidemic. Associate Professor Wayne Cutfield, reporting on the situation in Auckland, has revealed an escalating epidemic of childhood obesity, wherein an estimated half of Pacific Island and a quarter of Māori children are overweight. There is also the concept of epidemic used in connection with cannabis and methamphetamine. So, in short, Māori seem to attract epidemics, if we are to believe all this information.

These are not just recent occurrences. I refer to a statement from our first New Zealand - trained Māori medical doctor, Te Rangi Hīroa—Sir Peter Buck. He said: “Various epidemics were introduced by civilisation and have remained with us ever since … measles, typhoid, scarlet fever, whooping cough and almost everything, except plague and sleeping sickness, have taken their toll on Māori.” So, indeed, almost everything has taken its toll on Māori. In the initial years following colonisation, the Māori population suffered a period of almost unbroken decline from 1858 to 1896, with the susceptibility of Māori to epidemics and other diseases introduced by the settlers being described as a major factor. But if there was one epidemic to outdo all others, it was the influenza epidemic of 1918 in which at least 2,160 Māori lost their lives. So our history provides us with visible and violent proof of the high likelihood of Māori experiencing significant mortality and morbidity in future epidemics.

Alongside our history—alongside the epidemiology of disease—there is also the policy incentive provided in He Korowai Oranga, which demands that specific provision must be made to protect and enhance the well-being of Māori and to ensure that Māori health disparities are reduced. Achievement will require a total commitment from Government, a commitment to the elimination of institutional racism across the board—in incomes, housing, employment, and justice, as well as in health. It will require an about-turn on the denial of rights for tangata whenua, for how can a person be whole and healthy when that person is assumed to have only subhuman rights?

Dr Lorna Dyall, senior lecturer in Māori health at the University of Auckland’s faculty of medical and health sciences, has suggested four integrated pathways of work to run alongside each other in the case of an impending epidemic: the need to rebuild and strengthen whānau; the need to involve Māori at all levels of decision making; the need to ensure that Māori can access and receive effective health services; and the need to ensure that a whole-of-Government approach is taken towards addressing Māori health matters. It is said that vision without action is a daydream, and action without vision is a nightmare. The Māori Party has a vision in which Māori interests are able to be placed at the very centre, with our well-being protected and enhanced so that our future and survival are assured.

The action that these seven bills could drive is the bringing on board of appropriate Māori leadership, the use of Māori infrastructures and networks, and the ability of health workers to engage with iwi and Māori communities in helping to fight the excessively high rate of mortality that all predictions expect to occur in the likelihood of an epidemic. We want action in which our whānau are actively prepared and ready to support and care for tamariki and pakeke in the event of an outbreak of an epidemic. Should avian influenza or, indeed, any infectious disease prove itself to be capable of becoming an epidemic, our communities need to be on high alert about how to preserve our most precious resource—“He tangata, he tangata, he tangata”.

The particular anxiety expressed by many tangata whenua about this legislation has been around looking at the concept of how best to minimise face-to-face contact. Questions have arisen specifically around our tangihanga, and whether the epidemic risks will entail mass burials to occur, therefore disrupting long-held expectations about the traditions associated with paying our respects to the deceased and their whānau. In this regard we welcome the recommendation from the Government Administration Committee that an epidemic notice will be issued only for outbreaks of quarantinable, rather than infectious, diseases per se. The notice should be the sole preserve of highly infectious diseases capable of becoming a pandemic.

We have considered the viability of using marae for quarantine centres. The changes to the Health Act increase the powers of medical officers of health to detain people for medical surveillance for a period of up to 28 days. We note also that the police will be able to use force to detain people suspected of suffering from bird flu. We would suggest that rather than using the enforced authority represented by either the medical officer of health or the police, it would be preferable, in the interests of safeguarding public confidence and accountability, for encouragement to be given to utilising venues that are already familiar to the people, such as marae. We would also suggest that MPs take on board the need to inform their constituencies of what can be done to be “epidemically prepared”. Accessible and widespread information will be critical to effective preparedness.

In closing, I tell members that the 2006 census results were released last week, which showed that New Zealand’s Māori population has experienced a growth exceeding 7.4 percent since 2001 to reach a grand total of 565,329. A century ago, in 1905, the Māori population hit an all-time low of 45,000 and was at risk of extinction. Not only did tangata whenua survive but we have sustained a substantial and vibrant level of population increase since then. We celebrate that growth and we look forward to it continuing. Our future as a nation depends on our young population, our Māori population, being able to thrive on many counts. We want to see our population contributing to the Māori economy of the future. We want to know our taonga will be protected for future generations. And we want to be content in the knowledge that our very survival is not at threat. Voting in support of the seven bills debated today, bills that were previously grouped together as the Law Reform (Epidemic Preparedness) Bill, is one more step along the way towards achieving that. Kia ora tātou.

BARBARA STEWART (NZ First): On behalf of New Zealand First I rise to support this legislation and the subsequent amendments to the various Acts that it effects. This has been very important legislation for New Zealand—an important planning step in the event of any pandemic.

We are all very aware that a flu epidemic of the magnitude of the Spanish flu that occurred after the outbreak of World War I would be disastrous for New Zealand and, in fact, for the whole world. I was reading an article recently where it was estimated that a severe bird flu pandemic among humans could cost the global economy up to $2 trillion, according to Jim Adams, who is the World Bank vice-president for east Asia and the Pacific, and head of the avian flu task force. He said that represented more than 3 percent of the global economy’s gross national product.

If we use the same base percentage figure for New Zealand, then we realise legislation and prompt action on the part of the Government are absolutely essential. We need to have a timely response in order to attempt to minimise the crisis that we will find ourselves in, and of course to ensure that after the epidemic wanes, normal life is resumed as soon as possible. As a country we have no option but to be prepared. Other countries have legislation in place; so must we. The reality is that all countries will be dealing with the crisis that they have, and their efforts will be concerned solely with their individual situations and not ours here in New Zealand.

Many Acts are affected by these bills. However, if we are logical about this, we realise it means that this type of crisis does indicate that widespread efforts will need to be made across many fronts for some time. A pandemic threat such as bird flu or any derivative of it is far too important an issue for petty party politics to come into play. This is legislation that must be supported by every party in this House, and I can see the National member nodding in agreement from the back seat.

Preparations such as those outlined in this legislation are absolutely essential, and New Zealand First supports this legislation.

JUDY TURNER (Deputy Leader—United Future): I rise on behalf of United Future to take a call on the third readings of this legislation. The Epidemic Preparedness Bill contained legislation that we hope never has to be enacted. The provisions are triggered by an announcement by the Prime Minister and the Minister of Health, in collaboration with the Director-General of Health, that we are threatened by a pandemic. Pandemics are rare. We have about two or three every century. They can strike at any time. They are highly contagious and have a high fatality rate; there is no human resistance. The number of lives taken by the Spanish flu of 1918 is unclear but it was anywhere between 50 million to 100 million worldwide. Over 8,000 people died in New Zealand, 25 percent of the entire population of Western Samoa died, and 20 percent of French Polynesia died.

The strength of what has legislatively been put forward in this legislation is that health officials and officials in other Government departments are required to act predictively and make, in advance, as many of the regulations as they reasonably can. All regulations will be reviewed after the crisis. Most other jurisdictions have similar legislation, but New Zealand is perhaps a forerunner in designing regulations specifically geared to the conditions that prevail during a pandemic. A pandemic is different from other crises—for instance, a natural disaster where people pull together to support each other. The nature of a pandemic is such that we would most likely be actively discouraging social contact, because that would add to the existing risks associated with a pandemic.

Ongoing work is required at community level. For example, most supermarkets stock only enough food to cover themselves for 2 to 3 days. Public education about civil defence - type emergencies remains current, and ignorance on this matter is unhelpful. Although overreacting is also unhelpful, so is under-reacting. This discussion now needs to move beyond Government departments and towards neighbourhoods and homes. As others have mentioned, this is not a matter to be treated as a political football.

I thank the select committee for the tone, and working environment, that it created, and also for welcoming me, as a non-voting member, on to the committee for the duration of consideration of this legislation. United Future is happy to support the combined third readings of the seven bills resulting from the original legislation.

Bills read a third time.

First Reading

Debate resumed from 7 December.

Hon JUDITH TIZARD (Associate Minister of Commerce): I will take up where I left off last Thursday on this bill that amends the Copyright Act 1994. I was coming to the matter of technological protection measures that offer a means to combat the ease of unauthorised reproduction and distribution of digital technology. There are, however, concerns about digital lock-up. Copyright owners may use technical locks, not only to stop their copyright material from being copied, but also to stop it from being accessed, and can therefore potentially prevent copyright users from making legitimate uses of the material, for example under the fair dealing provisions of the Act. Currently, the Act allows copyright owners to take action against people who supply or manufacture devices, means, or information specifically designed to circumvent measures that prevent copyright material from being copied and are intended to be used to make infringing copies. The bill extends this right by allowing copyright owners to take action where circumvention could enable infringement of all exclusive rights, not just copying. For example, the copyright owner will be able to take action in regard to devices where circumvention would enable infringement of his or her communication right. The act of circumventing the technological protection measure is not in itself prohibited.

The offence provision introduced in the bill for the commercial dealing in circumvention devices, means, and information is intended as an additional deterrent to such activity. New provisions are also introduced to enable the actual exercise of permitted acts where technological protection measures have been applied.

The bill introduces protections for copyright management information that identify content protected by copyright in the terms and conditions of use. Criminal penalties are also introduced for large-scale dealing in copyright material where the dealer knows that electronic rights management information has been removed or altered. The permitted acts or exceptions to the exclusive rights of copyright owners contained in the Act provide an important balance between protection of copyright, and access for users. The bill clarifies and amends the exceptions to copyright owners’ exclusive rights, particularly in relation to fair dealing, library archival and educational use, and time shifting. It also introduces new exceptions for format shifting of sound recordings for private and domestic use, and for decompilation and error correction of software.

Format shifting is a term used to describe the practice of copying the sound recording from one format to another, for example from a CD to a portable MP3 player. Today the popularity of MP3 players, iPods, and other portable digital music players means that people want to transfer music, which they have legitimately bought, on to these devices to take advantage of the new technology or to enjoy music in different places. Yet, despite the fact that this activity is common practice, it is an infringement under the Copyright Act—a fact that most music lovers do not know. This makes otherwise law-abiding New Zealanders into unintentional lawbreakers. The bill amends this situation to reflect both fairness and reality. The exception does not legitimise clearly damaging behaviour like copying CDs for friends or selling them, or authorising online file sharing of music.

The Copyright Act also provides a range of rights to performers, enabling them to exercise control over the recording of their performances and the distribution of those recordings. This practice of making illegal copies, known as bootlegging, can have a major impact on the ability of performers to obtain a fair return for their efforts. In keeping with the changes to the main copyright provisions in the Act, the bill will update the technology-specific language currently used and will introduce a communication right for performers.

Copyright legislation is a key aspect of New Zealand’s intellectual property rights framework. Copyright continues to be relevant in the digital age, and is an important tool for digital content delivery and use, commercially and non-commercially. This bill promotes a modern legal framework that guides the protection and use of copyright materials. The bill will provide more clarity and transparency for how the Copyright Act applies in the digital environment. In particular it will enhance the certainty about how exceptions in the Act apply to digital works and will allow users of copyright material, for example libraries and educational institutions, to make use of digital technology with confidence.

The bill will increase incentives for investment in creative industries, information and communication technology development, and new business models for the delivery of copyright works. Increased certainty will further be created by New Zealand’s law being more in line with that of our major trading partners. Increased certainty is also encouraging the continued supply of copyright works and means of distribution, such as by Internet service providers, within New Zealand and from overseas, setting the conditions to encourage continued access to information and the innovations necessary for cumulative innovation.

I have indicated that at the appropriate time I will move that this bill be referred to the Commerce Committee for consideration, and I thank all of the officials who have been involved in the detailed negotiations that have resulted in this legislation.

CHRISTOPHER FINLAYSON (National): National will support the first reading of the Copyright (New Technologies and Performers’ Rights) Amendment Bill so that it can be considered carefully by the Commerce Committee. The first copyright Act was the Statute of Anne passed in 1709. It was enacted to protect authors who found that printers and booksellers were printing, reprinting, and publishing their books without their consent. Since that statute the Westminster Parliament has adapted the copyright system to cope with the technological advances of each age, and New Zealand’s copyright law has always been closely linked to the UK legislation.

In the 20^th century this Parliament has made a number of changes to copyright legislation in order to provide protection for radio broadcasts, films, and television broadcasts. About 20 years ago the law of copyright in England was reviewed. The 1709 legislation was described as a modest Queen Anne house, to which there have since been added Georgian, Victorian, Edwardian, and finally Elizabethan editions, each adding embellishments in the style of the times. This bill, which seeks to amend the Copyright Act 1994, could be said to be a late Elizabethan embellishment.

One feature of this bill is that, on occasion, the equivalent English provisions are departed from in favour of provisions from Australian or United States copyright legislation. I think the select committee will need to examine those clauses whereby there is a departure from the English provisions to make sure that they are appropriate and that the legislation remains intellectually coherent.

The Copyright Act 1994 requires a comprehensive review; we only have to look at the huge issues facing the law of copyright. For example, will protection and encryption technologies beat the hackers and the copiers? Will copyright enforceability weaken over the next few years? Effective copyright enforcement depends on a delicate balance of technologies, as protection abilities must outpace copying abilities. This balance is unlikely to continue during periods of rapid technological change such as we are now experiencing, notwithstanding the provisions of this bill. Indeed, there are some who believe that the enforcement balance is turning against copyright. These questions show why a comprehensive review is required and why there needs to be a fresh discussion about the appropriate balance between the interests of creators and the public. I am disappointed that the Minister has failed to institute a comprehensive review of our copyright law.

There is another reason why this kind of law reform is required. Amendments of this kind—piecemeal amendment—can damage the fabric of legislation. Rather than tinkering with legislation, on occasion it is preferable to have a comprehensive review, to go back to first principles, and to make changes in a principled manner.

Before making some comments on the detail of the bill, I will make a general comment about what I consider to be the key issue not addressed by this legislation: consideration of the other side of the copyright equation, namely, dealing with use that does not infringe the owners’ legitimate rights. For example, there seems to have been no consideration of the recent proposals made by the US Library of Congress in relation to orphaned works. Various reports of the ministry have rejected a wider, fair-use protection, and that has left New Zealand copyright legislation with a mishmash of specific exceptions.

I first address key terms in copyright, which are a very important issue in this bill. Many of the basic concepts in the Copyright Act 1994 remain relevant. However, two terms are changed by this bill. References to broadcasts and cable programmes are to be deleted and replaced by a new concept entitled “communication work”. The new term is defined by an amendment to section 2 of the Copyright Act, inserted by clause 3(2), and it “… includes a broadcast or cable programme”. So the bill strips the Act of all references to broadcast and cable programmes and instead substitutes the term “communication work”. I hope the Commerce Committee analyses that definition carefully to ensure that it adequately covers all new forms of technology. I agree that the current definition of cable programme is inadequate, but it may be wise for the select committee to consider retaining some notion of broadcasting.

Clause 44, which inserts section 81A, is a very important clause and needs some work, in my view. The first issue is whether what is proposed is the right policy response to the issue of making music available for portable devices. It could be argued that the market can provide the answer. What is proposed will permit home recording for private and domestic use, but the select committee may want to give some further thought to this issue. In addition, the section inserted by clause 44 has a sunset provision and will expire 2 years after the date on which it comes into force unless renewed by the Governor-General by Order in Council. The select committee may wish to consider whether that sunset provision is necessary or desirable. I have my doubts. It does not make sense that my right to download music to my iPod should automatically lapse. How will it be enforced? I think this provision needs a great deal of work done on it, and I understand that, as currently drafted, it satisfies neither side of the debate.

I also have some concerns about clause 49, which repeals section 88 of the Copyright Act. The select committee will also need to take a good look at this clause. There is an argument that section 88 could be extended to permit satellite retransmission of free-to-air broadcasts and not just cable retransmissions. Enabling simulcast of free-to-air channels by digital satellite broadcasters will enable consumers in some parts of New Zealand to receive a much higher quality picture and, in some cases, channels that they are currently not able to receive. My understanding is that the equivalent provision in Australia has been extended to include satellite retransmissions. The explanatory note states that section 88 is “… no longer suitable to achieve the original policy objectives of encouraging competition and improving quality of television reception.”, but no reasons are given. Why is New Zealand adopting a different approach? What does the change in policy mean for those parts of New Zealand where there is no established cable network? I hope the select committee will look at those issues.

Clause 53 introduces a number of sections that address the issue of the liability of Internet service providers for the infringement of copyright. Three circumstances are specified, and I will not address them now, but I know that the select committee will want to look carefully at those provisions.

For the purposes of this speech I do not have any substantive comments to make on those clauses that amend Part 4, “Moral Rights”, of the Copyright Act. The amending clauses delete references to broadcasts or cable programmes and substitute the term “communication works”. For the purposes of this first reading speech I do not have anything much to say about Parts 6 and 9, which likewise ratify the terminology changes I have referred to earlier.

The final clause I will refer to is clause 89, which introduces sections after section 225 of the Act. A subpart entitled “Technological protection measures” is introduced. In simple terms, one can explain all this by saying that there have been some major technological changes since 1994 and that these have given rise to new forms of digital communications and ways of protecting this new technology. These measures receive protection under the bill—for example, it becomes a criminal offence to provide or manufacture goods or services that act as a technology protection measure spoiler. It also becomes a criminal offence to alter or destroy any copyright management information attached to copyright material and to sell any material that has its copyright management information destroyed. I understand that these provisions are modelled on the American Digital Millennium Copyright Act.

The Commerce Committee will want to consider the appropriateness of applying criminal penalties to actions that have not been considered to be the true business of the Copyright Act. The provisions expand the scope of copyright law and may not, in fact, be in the public interest. A better approach may be to allow bodies to grant exceptions that are justified in the public interest. I refer to the Library of Congress in the United States, which can issue regulations permitting certain breaches. I understand that the library has recently allowed an education exception to allow the encryption mechanism to be broken on DVDs so that professors can show a particular scene from a film, for example, to their students for educational purposes.

In conclusion, therefore, National supports the first reading. There are a number of important issues that the select committee will need to consider. As I have said, I think this type of law reform, in such an important area, is second rate. If the Government thinks that intellectual property laws are so important, it should institute regular and comprehensive reviews. This bill does not deal with many other major contemporary issues in the law of copyright, and it should. With those comments, I look forward to being part of the Commerce Committee, which will debate such issues as do appear in the bill.

Hon BRIAN DONNELLY (NZ First): I first became aware of some of the difficulties created by the new technologies with regard to copyright rules during hearings by the Education and Science Committee way back in 2002 into the National Library legislation. The representatives of news agencies expressed concerns about the required legal deposit of all published material with the National Library. The problem arose from the reality that many news agencies contracted with international news agencies such as Reuters. This created the conundrum that if there was a legal requirement for such material to be deposited, rivals could piggyback off the agency that made the initial deposit. Moreover, the material was being updated on a regular basis. At that time, I can well remember, it was pointed out that policy work was already under way on copyright legislation to accommodate the new technology. So the Copyright (New Technologies and Performers’ Rights) Amendment Bill here today has had a long genesis.

Computers were supposed to make our lives easier. Yeah, right! But they are a reality, and that reality demands some additions to existing copyright rules. For a knowledge economy to flourish, there must be robust protections for intellectual property and for other people’s creations. As pointed out in the opening anecdote, new technologies have created new challenges in establishing legal protections.

The approach that has been taken in this bill is to reflect the basic principles of hard copy copyright—in other words, existing copyright rules and principles—and to apply those principles to the issues facing the new technologies. In other words, the bill has tried to apply practical, pragmatic, common-sense solutions to the challenges.

Under the present law it is almost certainly illegal to copy music on to an iPod or an MP3 player, yet hundreds of thousands of New Zealand citizens do it, completely unaware that they are probably breaking the law. This new legislation will allow someone who has legally purchased a CD to transfer that music to an iPod or an MP3 player for personal use. For example, the car that I normally drive has a CD player. But I also own a little Toyota Town Ace, which is like a motorised trailer. I use it to go into town to get supplies of builders’ mix, metal, and things like that. The Town Ace has only tape facilities. Under the present law, I cannot tape a CD and play the tape in my Town Ace; this new bill would allow me to do that. What I will not be able to do is to make a copy of the CD and give it away to somebody else. Certainly, the bill confirms the illegality of the sale of such copies.

There is some resistance from the music industry to this format shifting, because it encourages copying. However, if my Town Ace had a CD player, I could play the CD on it. I have purchased the CD legally, and therefore it seems sensible that I should be able to put it into a different format for my own personal use.

Hon Rick Barker: Change your car!

Hon BRIAN DONNELLY: I say to Mr Barker that I cannot afford to change my car; I am not on a Minister’s salary. To us in New Zealand First this legislation seems to be a very common-sense, practical resolution of the issue.

The bill changes the definition of “copying” in the Act, to accommodate the nature of digital works. It also provides an exception to the reproduction right, for transient copying through automatic processes of communication networks. When we think about it, the absence of such a provision could potentially bring Internet networks to a halt. The bill specifically prohibits the manufacture or supply of devices that could be used to breach this copyright—namely, devices designed to circumvent technological protection measures.

I am pleased that the bill lays out what is acceptable for libraries and education institutions. Development of photocopiers in the 1970s and 1980s led to widespread breaches of copyright. In fact, schools were not even aware that they were in breach of copyright on many occasions. Admittedly, in the 1990s that situation was tightened up, but the new technologies, as I said, have created new challenges for schools. The anecdote from Chris Finlayson, about the Library of Congress allowing certain sections of CDs or DVDs to be used for educational purposes, shows the way forward.

I well remember Mark Peck saying with regard to the GE moratorium legislation: “The commercial sector isn’t very happy, and the Greens aren’t very happy, so we’ve probably got it just about right.” With this legislation, neither the creators of the materials—musicians, etc.—nor consumers will be entirely happy, which means it is probably just about right. New Zealand First will be supporting this bill, as it seems to be a common-sense response to the special challenges that the new technologies bring with them.

Dr PITA SHARPLES (Co-Leader—Māori Party): The people of Te Āti Haunui-a-Pāpārangi were left with the words of their tupuna Tinirau: “Toi te kupu, toi te mana, toi te whenua”. The proverb stresses that these three taonga—language, prestige, and land—are the main means of preserving Māoritanga. Without the Māori language, without prestige or mana, and without land, Māori culture would be a thing of the past. In much the same way, the comprehensive protection of mātauranga Māori—Māori knowledge—is intimately linked to the notion of copyright.

We, the Māori Party, welcome the opportunity for copyright reform to ensure that the critical issues associated with Māori traditional knowledge and intellectual property rights are debated. Thirteen years ago Mātaatua iwi and the National Māori Congress organised an international hui from which emerged the Mātaatua Declaration on Cultural and Intellectual Property Rights of Indigenous Peoples. The resultant declaration was tabled at the 1993 session of the United Nations Working Group on Indigenous Populations, and has since been acknowledged in a key number of international documents produced by Unesco, the Convention on Biological Diversity, and the World Intellectual Property Organization.

There are three key ideas included in the Mātaatua declaration. Firstly, indigenous cultural heritage is site and community specific. Secondly, the first and primary beneficiaries of indigenous cultural heritage are the direct descendants of that heritage. Thirdly, indigenous peoples are willing to share with humanity their traditional knowledge, provided ethical processes such as free and prior informed consent are protected, alongside their fundamental rights to define and control this knowledge.

The Mātaatua declaration also calls on States to develop, in full cooperation with the indigenous peoples, a sui generis system to protect cultural and intellectual property. The concept of sui generis systems is a key principle for which we will be looking keenly to expert advisers—the people in the know—to bring their learning to bear at the select committee. The concept of sui generis is to describe new ways of doing things. Aotearoa has already introduced a sui generis measure in its Trade Marks Act 2002. In addition to the standard components of trademark law, there is a provision that enables the Commissioner of Trade Marks to refuse to register a trademark if it is considered to be offensive to Māori. This is considered to be a sui generis measure, a new and unique addition to the existing framework. So it can be done. Would it not be a great thing if, during the process of this bill, we were able to follow this lead and ensure that a new way of doing something could be followed up?

This bill amends the Copyright Act 1994 to account for the opportunities and risks that digital technology presents for creators, owners, and users of copyright materials. These new techniques can be both a blessing and a burden. The burden, of course, accompanies the risks associated with commercial dealing of material that acts against owners’ rights. At its very essence, copyright is about creators being recognised for their efforts.

I come to this bill from a basis of over 30 years in composing and orchestrating choreography for Te Roopu Manutaki Māori culture group. My passionate belief has always been that I want to share our works of art to ensure that our taonga tuku iho continue to thrive and revitalise our culture. But I am constantly reminded, particularly in the context of Te Matatini, our national Māori kapahaka competitions, of the significance of providing for intellectual and cultural property rights to ensure that the long-term development of Māori performance arts is protected. So I think about the world of kapahaka—festivals, events, exhibitions, wānanga, workshops, master classes, Māori performance arts in schools, the Pacific Arts Festival, and international festivals and events—and about how indigenous knowledge is protected across all those arenas. There is an ongoing debate about who owns the copyrights in all those areas. Is it Te Matatini or is it the artist? I know myself that it has sometimes taken all of our efforts to get our compositions out of the archives. After all, who are we? Only the authors.

That brings me to another point, which I hope will be taken up at the select committee. We seriously need to know the views of those at the coalface—or, more appropriately, at the easel or the floorboards—about the context of copyright in relation to new technologies and performers’ rights. The issue of performers’ rights gives us every reason to urge that tangata whenua be specifically invited to make their presence felt in this new legislation. Some in this House will recall that in 2003 Toi Māori Aotearoa, at an annual hui for Māori performers, raised issues about the performers’ rights review before Cabinet. Māori performers described their concerns about collective ownership of performances, and protection for the underlying cultural heritage that provides source material for a variety of performances. This is particularly so in relation to respecting the cultural integrity of works once they enter the public domain. So we can do no better than turn to Māori performers to assist the Parliament in clarifying the application of existing rights and exceptions for tangata whenua in the digital environment.

Finally, I recall the kōrero that came out of the National Digital Forum of November 2004 at Te Papa Tongarewa. Dr Paul Reynolds raised the concept of a creative commons: a communal creative webspace in which the protection of intellectual property maintains the copyright holder’s ability to grant certain rights to the public while reserving others. I quite like this idea, and I would be interested in seeing how it applied to our digital future.

There was also specific reference to the exhibition Ka Moe Ka Puta, which showcased Ngāti Kahungunu photographic archives. Unlike the temporary inhabitation of a physical space, an online exhibition has the advantage of creating an archive for the future. But there are also problems associated with this type of exhibition being made available online that relate to intellectual property protections, in particular. Suggestions were made that a type of subscription or password entry, perhaps by whakapapa, could be included.

Other issues raised included the probability of precluding human interpretation in the decontextualised atmosphere. In effect, what that means is that it prevents my kuia and kaumātua from walking alongside of me, describing the wealth of whakapapa connections that link to an image. These are all issues that we hope might be brought to the table when the bill comes to the select committee.

The Māori Party will support this bill, and we look forward to a fertile discussion in which we are all better informed about the means of protecting and preserving the mana and integrity of our language, our words, our world.

I finish with a final inspiration from the oriori of Tūteremoana, which reminds us of the importance of protecting Māori knowledge: kotahi tonu te hiringa i kake ai a Tāne ki Tikitikiorangi. Ko te hiringa i te mahara. There was but one great power that enabled Tāne to reach Tikitiki o Rangi. It was the power of the mind. Thank you, Madam Assistant Speaker.

GORDON COPELAND (United Future): I rise on behalf of United Future to speak on the first reading of the Copyright (New Technologies and Performers’ Rights) Bill. When Chris Finlayson spoke recently of the Statute of Anne of 1709—I assume, by the way, that that is Queen Anne of the chocolates fame, because I know my wife Anne was not around in 1709, and, I doubt very much whether Madam Assistant Speaker was around in 1709, either—I was reminded recently that this bill was introduced to the House by the Hon Judith Tizard, and that she was also involved with the Charities Bill a couple of years ago, which was a continuation of the Statute of Elizabeth of 1601. So, for whatever reason, it seems that the Minister Judith Tizard seems to pick up on Acts that were started by English female monarchs. Perhaps, in due season, this bill will be known as the Copyright (New Technologies and Performers’ Rights) Act of Judith 2006, and historians will puzzle over why it had its first reading on 12 December when, in fact, the calendar shows that it is 13 December outside this Chamber. Anyway, I am sure those historians will be able to explain that little mystery to future generations.

This bill essentially updates New Zealand copyright law. Indeed, as Chris Finlayson has pointed out, there is a long tradition of law concerning copyright; it goes way, way back in time. This is necessary because we are now in the electronic and digital age. I could not help but think, when I was listening to Dr Pita Sharples’ speech, which referred to Tāne and other such things, that probably no one anticipated in those times that we would have an electronic and a digital age, and that the indigenous people of New Zealand, the tangata whenua, would be there alongside people from other parts of the world to put in place legislation to take us forward into that digital age.

I am a member of the Commerce Committee, and I note that the bill will be referred to that committee, so I look forward to getting down to the nitty-gritty of the bill in the select committee. At this stage I simply signal that United Future will support the bill, which I think is both timely and necessary.

NANDOR TANCZOS (Green): The Copyright (New Technologies and Performers’ Rights) Amendment Bill has been so long in the drafting that some of the more telling criticisms of it can be found in the ministry’s own early documents. The ministry’s 2002 position paper, for example, states it is the ministry’s view that it is not the role of the Act to protect access-control technology, which is used in some cases to price discriminate and control the geographical distribution of works, to the detriment of users. I absolutely agree with that. Our copyright law should not be used to help firms to price discriminate and to control where and how works that have been legally purchased can be used. That would be to the general detriment of users, and it would stifle innovation and research. Yet that is precisely what the current bill would do. It would turn this Parliament into a tool of corporate control, by mimicking some of the least desirable features of prior American legislation on this topic.

To be fair, there are some good points. The bill tries to distinguish between the personal use and commercial use of digital material, but with mixed results. It protects Internet service providers from being in breach of the Copyright Act as they conduct transient copying during the process of delivering web material, and it has also tried to come up with a workable notion of “fair dealing” in copyright material. It tries to exempt sound recordings that have been ripped to an iPod or for playing in the family car. It also seeks to create another exemption intended to legalise the use of multi-zone DVD players. Those are welcome advances—or they would be, if they were unambiguous. I acknowledge the comments of Chris Finlayson in his call for a comprehensive approach to the whole issue of what constitutes “fair use”.

If we take the issue of format shifting as an example, currently under the Copyright Act it is illegal to rip a CD that one has legally purchased on to one’s iPod, or to make a copy to play in the car. Under this bill it would be legal to take a CD that one has bought and make one copy for each of the replay devices that one owns. Yet, incredibly, that provision has been given a sunset clause. The exemption that allows a person to format-shift the sound recordings that he or she has bought will expire 2 years after the legislation has been passed, unless it is explicitly renewed by Order in Council.

It seems to me to be a basic principle that once we have bought a CD, we should be allowed to decide how we use it in our own homes. How will this exemption work at all if a record company attaches non-copying technology to its CDs? Under this bill it would appear to be illegal to try to circumvent that technology and to try to enforce one’s legal rights in New Zealand. One of the concerns raised by the Privacy Commissioner around this very point was that such proposals may force New Zealanders to accept intrusions on their rights that may not be consistent with New Zealand law but that it would be illegal to circumvent.

In addition, why has the exception for copying purchased sound recordings for personal use not been extended to audiovisual works, as well—that is to say, to DVDs as well as CDs? People do format-shift both CDs and DVDs, and they will increasingly do so—it is just a simple fact of the world we live in.

The line between personal use and commercial use also gets very blurry, very quickly. If personal use can be argued to have commercial implications—if one merely communicates information about the structure of encryption codes to others, who then use that for commercial or criminal purposes—the chain of liability seems very unclear. Presumably, one cannot be held criminally liable for the end uses of digital information by others.

It is also unclear to me how, under this bill as it is drafted, one could carry out open-source research, which can be said to be for personal use but can have commercial applications too. The entire open-source movement, whose overwhelming strength and contribution to the entire evolution of the World Wide Web and the Internet has been based on its readiness to share how codes and formats work, could all be torpedoed by this legislation. We would be legislating against the new breed of web innovators. Where, for instance, will interoperable competitive products fall on the spectrum, as the bill attempts to strike a balance between copyright and personal use? In one sense it is clearly of personal advantage to be able to develop one’s own product, but will that not entail cracking and disseminating the codes and formats of the units one wishes to interoperate with?

But, as I have previously indicated, my most fundamental problem is with regard to the degree of protection that the bill offers to technical protection mechanisms. Those anti-circumvention measures primarily put Parliament into the service of corporate profit-making. They give no discernible defences at all, that I can see, against malware or encrypted surveillance measures that corporates may well incorporate into digital works that they distribute. Collectively, these measures will—and currently already do—work to stifle innovation and research.

Let me be clear at this point that the bill, despite its name, is not actually about protecting the copyright of artists. Their right to a decent income from what they have created is not the driving motive of this bill. Nor will this bill stop piracy or counterfeiting. The US legislation that the bill mirrors has been invoked not against pirates but against consumers, scientists, and legitimate competitors. This bill seeks to enshrine the rights of corporations over cultural and scientific property. Artists, with very few exceptions, will continue to receive a pittance for the fruits of their labours. After all, the bill is about the right of corporations to exploit consumers at every point in the delivery of digital material, and it seeks to make a criminal out of every citizen who tries to resist those corporations’ power to do so. For example, corporations in the United States have already sued nearly 2,000 individuals who have engaged in the file sharing of music.

Just today we have been debating legislation to end Telecom New Zealand’s monopoly of access to the local loop. Why on earth would we want to create a new realm of legislation that enshrines monopoly access in the digital domain?

The international verdict on this legislation is already in. Cory Doctorow of Boing Boing, the world’s most widely read blog, has this to say: “New Zealand MP Judith Tizard has sponsored an amendment to New Zealand’s Copyright Act. The new copyright proposal mirrors the USDMCA … . This has been an unmitigated disaster in the US: not only has it totally failed to keep copyrighted works from being copied without permission … [but] it has also created an anticompetitive marketplace where companies can sue their competitors for making compatible products.”—for making compatible products! Cory Doctorow goes on to state: “Not to mention the devastating effects on user rights, and the chilling effect on legitimate security research. The US had an excuse:”, Doctorow concludes, “when it passed the DMCA in 1998: nobody had tried this and seen how bad it was … . But here we are, 8 years into the DCMA trainwreck—what possible excuse can New Zealand have for adopting this failed US policy initiative? Why would you want to import another country’s disaster?”

This Parliament has to ask itself that question. In fact, as someone has already said about this bill, people can poison a river and get a slap on the wrist—or maybe get a consent, as happened in Pareora just today, I think—but if they try to tamper with a multinational’s international property rights, then the book really gets thrown at them, to the tune of fines of up to $150,000 or 3 years in jail in the case of this legislation. Why on earth do we want to introduce that kind of legislation here?

I will make one final comment around the exemptions for educational purposes. The point was made, in an email that came to me only today from Steven Marshall, that the Copyright Licensing Ltd v University of Auckland decision has made it abundantly clear that exceptions in relation to educational purposes must be interpreted as narrowly as possible. In practical terms it is very hard to stay within the limitations of the Act. New Zealand institutions have discovered that to their cost. In effect, every institution must use licences in order to manage the risk. The bill’s regulatory impact statement acknowledges that obliquely, by saying that maybe some libraries and educational establishments will be prevented from making particular use of copyright material without a licence from the copyright owner, but that it is OK because it may already be copied under their licensing agreements. This rosy view of the world of licensing ignores the experience of Australia, which is often an accurate predictor of what will occur in New Zealand in this area. We have to remember that licensing for the digital provision of materials is substantially more expensive than for paper-based materials—up to 10 times the fees for the same content if it is in a digital format. Institutions are having to invest heavily in onerous tracking and notice provisions.

A party vote was called for on the question, That the Copyright (New Technologies and Performers’ Rights) Amendment Bill be now read a first time.

Ayes 113

New Zealand Labour 50; New Zealand National 48; New Zealand First 7; Māori Party 4; United Future 3; Progressive 1.

Noes 6

Green Party 6.

Bill read a first time.

Bill referred to the Commerce Committee.

Social Security Amendment Bill

First Reading

Hon RUTH DYSON (Associate Minister for Social Development and Employment (CYF)), on behalf of the Minister for Social Development and Employment: I move, That the Social Security Amendment Bill be now read a first time. At the appropriate time I will move that the bill be referred to the Social Services Committee, and that the committee report back to the House finally on or before 30 April 2007. This bill amends the Social Security Act 1964, an Act whose genesis is in the historic legislation of 1938 that was passed by the first Labour Government. It represents another step in our Government’s active approach to social support and highlights the importance of work in people’s lives.

Our Government recognises that work is the cornerstone of people’s independence and social and economic well-being. Over the coming months the services offered by Work and Income will be further enhanced so that intensive work-focused support will be provided to every person who is receiving a benefit and able to work. This reform is about providing services on the basis of need, not benefit category. It takes us a significant way forward in our programme to fully align the benefit system around work-focused services for everyone who is able to work.

In the last 7 years our Government has reduced unemployment benefit numbers from around 160,000 to under 40,000. We have made excellent progress in providing stronger support for people who face particular barriers to work. The current high labour force participation rate of nearly 68.5 percent, and the low unemployment rate of 3.8 percent, are clear indicators of our success. We now have the resources to work intensively with people who are able to work, have told us they want to work, and need the right support to move into work. Alongside this activity we will continue to support people who are not able to work.

Significant changes to service delivery are already under way. These changes are aimed at providing work-focused services and support for people, right from the start. Enhancements are being made to employment and training assistance to improve flexibility and responsiveness, so that assistance better meets individual needs. This will see real benefits for all people of working age who are seeking to work. In particular, increased support for people receiving the sickness benefit or invalids benefit will help to ensure that those who are able to work receive the right support. The emphasis of the current initiatives is on getting the right services and support in place for people, but legislative change is necessary to support those changes and simplify the system. This bill introduces those changes.

The changes have a significant focus on youth. The shared Government and Mayors Task Force for Jobs goal is to have all 15-year-olds to 19-year-olds engaged in appropriate employment, training, or education activities. Enhancement through this legislation will contribute to this goal. From September next year a number of new requirements will be placed on people who are receiving financial support from the Government. Those applying for the unemployment benefit will be required to undertake a specific work or training-related activity or activities in the period between their first contact with Work and Income for assistance and their benefit commencing. They will be required to look for and accept any offer of suitable work during that time. This will mean that Work and Income will be able to direct a person to a work-related activity immediately, and not have to wait until after the benefit has commenced. Additional activity requirements for people who are receiving the unemployment benefit will also be introduced. They may be asked to plan or undertake a specific activity that will improve their prospects for employment.

The changes are designed to provide Work and Income with the flexibility to tailor the job search service to best meet the needs of the individual—in the current environment many jobs are no longer based on a Monday to Friday working week—to reflect the changes in workforce participation. The work test may, where a person’s circumstances make it possible and appropriate, be applied over 7 days. Many people on the sickness benefit or invalids benefit say they want to work or to develop skills that will help them to get work in the future. More actively working with these people and providing them with the right services and support to participate in the labour market will have long-term benefits for everyone. From September next year people receiving the sickness benefit or invalids benefit who may be able to work at some future point will be asked to plan for that eventual return, and to undertake activities to help them develop the skills to do so. There is no intention to force people into work when they are clearly unable to work at all. Our Government recognises, as it always has, that work is not appropriate or possible for everyone, and, where that is the case, we will continue to provide financial support.

I mentioned earlier the specific focus on young people, especially those 16-year-olds and 17-year-olds who no longer have the support of their parents. It is infinitely preferable for young people to be engaged in education or training than it is for them to be doing nothing. Missing out on those activities, and the opportunities they offer, can have a profoundly negative effect on a young person’s future circumstances, including his or her ability to get a job. We know that young people who are inactive for long periods of time have a much greater risk of poor outcomes. Keeping young people actively engaged in training and education will motivate them to set and achieve positive goals. It will help towards addressing isolation and disconnection from society, which can lead to negative outcomes, and it can also lead to success in employment, the pathway from poverty and into economic independence. Our aim is to work actively with young people who need our support, and to encourage them to return to or continue with their education. From September next year 16-year-olds and 17-year-olds receiving an independent youth benefit will be required to actively seek work or participate in training or education activities for 30 to 40 hours a week. This will be a first and important step towards improving their current and future opportunities to work.

Two other changes impact on young people. From May next year we are extending the access young people have to the independent youth benefit by making it available to those released from the custody of Child, Youth and Family. This is a positive move. It means that young people who have been in a stable foster home may, if they wish, stay in their home and be in a position to contribute to household expenses. It recognises the need of the young person and the valuable support provided by foster parents. Changing the access that 16-year-olds and 17-year-olds will have to the domestic purposes benefit for the care of the sick and infirm, from May next year, is also included in this bill.

One of the Government’s objectives is to enable greater choices for parents and caregivers around work and parenting. From September next year spouses or partners of beneficiaries with a dependent child under 6 will have the same planning and activity requirements as a sole parent. The part-time work-test requirement will be extended until the youngest child is 18 years old. At present the full-time work test is applied when the youngest child turns 14. The change will allow parents a further 4 years before the full-time work test requirements are applied.

A number of people care for someone who needs full-time care. The people who do this are sacrificing the opportunity that paid work offers in order to provide a valuable service. Access to the domestic purposes benefit for the care of the sick and infirm has long been linked to the fact that the person being cared for would otherwise need hospital care. That is an outdated consideration. From May next year the full-time requirement is being widened to include community residential services, rest homes, and equivalent levels of care in the community.

If a person does not apply for a benefit because of an error on the part of the department, it is important that this can be rectified as quickly as possible. From July of next year the situation will change. The bill provides for the responsible Minister to consent to the payment of benefits starting earlier than the date of application, where a person did not apply for a benefit because of an error on the part of the ministry. This is a significant improvement.

Finally, the bill will insert purpose and principle provisions into the Social Security Act. Some parts of the Act have a purpose statement, but the Act has never had overarching purpose or principle provisions. A number of judgments from the Social Security Appeal Authority, the High Court, and the Court of Appeal have contained statements in relation to the purpose of the Act. Those have been taken into consideration in developing the bill.

In closing, I pay a tribute to the dedication and the professionalism of the staff and team led by Sue Mackwell in the Ministry of Social Development in bringing this large piece of work to such a constructive conclusion. I commend the bill to the House.

ANNE TOLLEY (National—East Coast): I thank the Associate Minister for Social Development and Employment Ruth Dyson for her very full explanation of what the Social Security Amendment Bill is intended to do. Having sat through and listened to all that, and having read through the bill this afternoon, I have to say that it is legislating for Work and Income to do what most New Zealanders already thought that it did—that is, to help people into work.

When the Minister for Social Development and Employment first talked about this bill and went through all the rah, rah of a big announcement, he claimed that this was the greatest reform of the welfare system in 50 years. Of course, that is ridiculous. When members read through the bill, they will see that that statement is typical of the spin from that Minister, and that it has little basis in reality.

It is typical of the Minister, and it is an indictment on this tired, old Government, that it has taken 7 long years before we see any attempt to provide incentives and assistance in getting sickness and invalids beneficiaries, particularly, back into work. The number of beneficiaries has been rising; in fact it has risen by 50 percent under Labour. There are now 125,000 people receiving sickness benefits and invalids benefits.

Every time we have questioned the Minister about this matter, he has quoted overseas countries with the same problem—never saying, of course, that those countries have rising unemployment figures as well, which is not what we have seen in New Zealand. Whenever we have questioned the Minister about the fact that many people have gone from the unemployment benefit on to a sickness benefit or an invalids benefit, he has denied the facts. He has denied them, despite the fact that the numbers of invalids and sickness beneficiaries have continued to rise inexorably. He has sat on his hands, watched those figures rise and those people moulder on a benefit, and he has done nothing.

In fact, the Minister has admitted that he knows that one in five potential sickness or invalids beneficiaries who are signed up by a doctor are actually fit for work. He has admitted that, yet even the great reform bill that has been tabled in the House today does nothing to tighten the assessment criteria for those potential beneficiaries. Twenty percent of them are getting a benefit almost fraudulently. The Minister knows it and the ministry knows it, yet nothing is being done in this legislation or by this Government to get those people back into work.

In the spin around this bill, the Minister tried to conceal the fact that sickness and invalids beneficiaries would have their benefits cut if they did not meet the proposed activity requirements. He said that meeting the requirements would be entirely voluntary. Fortunately, a closer reading of the bill shows this not to be true. It is just another example of this Government saying one thing to people and then going out and doing another.

National is supporting this bill going to the Social Services Committee. Why on earth would we not? We have been arguing for this for 7 years. Labour members should be ashamed that after 7 years they have to introduce legislation to do what they have talked about doing for so long. We want to see this bill in the select committee. We want to tighten up the provisions in this bill. This is basically just a wet dishrag of a bill, designed to make the Government look as if it is doing something, but it is not actually doing very much at all.

We do not want to be tough and mean to people who are down on their luck. The reason that we want to make some tightening-up changes in this bill is not because we want to be tough on those people who are down on their luck or who are suffering long-term illnesses, but because welfare dependency is like a cancer that eats away at people’s self-esteem, their mana, and their ability to look after themselves and their families. Only work—even part-time work—can lift their spirits, lift their aspirations, and, ultimately, lift their standard of living. The Government has a responsibility to support people into work and to assist them to take their lives back into their own hands, rather than allowing them to languish on a benefit.

Finally, I have to say to the Minister that we have talked for almost 20 years about a single core benefit. Is this bill as close as we are going to get to it? Where is it? Why does the Government not just come clean and say that it is too hard, that it cannot do it, and that this bill is about as close as we are going to get. We need aspirational change to free people from the welfare trap. This bill just does not cut it, but we will make it right in the select committee. Thank you.

BARBARA STEWART (NZ First): On behalf of New Zealand First I rise to support the Social Security Amendment Bill. For many years in this House we have heard about the need to refocus the whole social security system on work and employment. This legislation is an excellent opportunity to do exactly that.

New Zealand First believes that social welfare must never become a trap for recipients that keeps recipients dependent on the State. The welfare state is a safety net, a helping hand when it is most needed, and not a lifestyle choice—and everyone in this House would agree. All of the research shows that families most thrive when adults are actively employed in the workforce. I think back to the numerous speeches that I heard from Dr Muriel Newman on this very issue when she was in the last Parliament. New Zealand First is very aware that the numbers of people on the unemployment benefit have steadily dropped, and we must acknowledge the efforts of the Government in this particular area.

There has been an increase of people on the invalids benefit and the sickness benefit; the numbers there have increased. Although we know that we have an ageing population, one must wonder whether this increase is, in part, a result of decreased personal expectations, the actual stress from not being employed, and the lack of social interactions that results from unemployment. As has always been the case, people with a terminal illness and people with a very severe disability or ill health on the invalids benefit are exempt from the planning or the activity requirements that are outlined in this particular bill.

The emphasis in this bill is about getting the right services and the right support in place so that people’s opportunities for work are increased. We must applaud that direction. This is what is needed. People who are able to work, should work. If they need additional support for a period of time, it is far less expensive to provide that support than it is to provide the unemployment benefit for them. It means, too, that solo parents caring for their children can plan ahead for employment in the future. The longer one is out of work, the harder it is to secure work. People should be assisted to ensure that they can develop work skills and be supported towards finding and holding down a job. Working adults are the basis of every society.

I was interested to read the “sanctions” part of the bill. It is very clear that when people fail to meet requirements without good reason, a sanction will be imposed. I believe that some training in this area may be necessary—even for some of those people employed by Work and Income. Last week I was approached by a young man who had gone into his local Work and Income office, accompanied by his father, to sign up for an unemployment benefit. He was just in ordinary working clothes and was, he believed, untidy. For the first time ever that he had gone into the office, he was told that he had a job interview in the neighbouring city in 1 hour’s time.

The young person believed that he was inappropriately dressed for the interview and he wanted to go home to change into more suitable clothes and to gather his thoughts. He thought that if he did that, he would have a far better chance of making a good impression at the interview and getting the job—because he wanted a job. The young man’s request was considered basically to be a refusal to attend an interview. He was told he would have to stand down and was going to have a sanction applied against him. He was quite shattered, and that was not quite the treatment that either he or his father believed was reasonable. It was the first time that he had ever applied for a benefit. However, he went out and eventually found a job for himself, so that he was not dependent on a benefit.

In this bill there appear to be some changes to the services offered to 16 and 17-year-olds on the independent youth benefit. We must acknowledge that young people today face a far more complex and challenging social environment than past generations have faced. It is far more preferable for young people to be engaged in education and training, so that they can obtain and hold sustainable employment, rather than receiving a benefit at this point in their young lives. Any initiatives—all initiatives, we should say—to ensure that these young people can be engaged in activities that will further their opportunities to hold down jobs are welcomed. Young people cannot be inactive for long periods of time, and we are all very aware of the negative outcomes that eventuate from inactivity—mental ill health, substance abuse, criminal activity, etc. Those are not things that we want to condone.

Success in employment, education, and training is the most important way out of poverty for young people. This is a very important bill and it has some far-reaching changes. New Zealand First looks forward to hearing further discussion at the select committee. We support this bill.

SUE BRADFORD (Green): The Green Party will be voting against the Social Security Amendment Bill being read a first time. That is not to say there is nothing commendable about the bill. For example, the Green Party supports the reduction of the maximum income-related stand-down period from 10 weeks to 2 weeks—something I, along with others, have campaigned on for many years. Pre-benefit stand-down is one of the primary causes of hardship amongst beneficiaries, and it is ridiculous that people are forced into total poverty and debt because of the 10-week rule. Although we would have preferred to see the bill abolish the stand-down period completely, we commend the Government for at least having the courage to go as far as this.

The Green Party also supports the aligning of the ending of benefits for sole parents who cease caring for dependent children, and the development of consistent residential qualifications across the benefit system.

Unfortunately, other aspects of the bill do not demonstrate the same commitment to fairness, justice, consistency, and flexibility. For example, clause 23, which inserts “Purpose” and “Principles” sections into the Social Security Act, is nothing short of being parsimonious and miserable in its approach. It is those purpose and principles sections that will influence the interpretation of legislation by Ministry of Social Development staff and by the judiciary, in terms of the Act in its entirety.

In clause 23 we see the framework for a regulated, inflexible, and mean-spirited social security system that is designed not to help to eliminate poverty—which is what the Green Party believes should be the objective of the income support system in this country—but to alleviate hardship, and then only to the extent provided for by the Act. This approach removes the system’s ability to respond to individual circumstances, as exemplified by this Government’s earlier abolition of the discretionary special benefit and implementation of the regulated temporary additional support regime. Today that is carried forth by clause 23 into the interpretation of the entire Act.

The purpose of the New Zealand social security system, as embodied in the original 1938 Act and restated in 1972 by the Royal Commission on Social Security in New Zealand, has been to provide an income that allows beneficiaries to have a standard of living that enables them to participate in, and feel part of, their local communities. That principle was undermined by the very ungenerous approach to welfare of National-led Governments in the 1990s. These new purpose and principles sections are geared to finishing that unfinished business of Jenny Shipley. Even her modest safety net is left torn and tattered, and it will be the most vulnerable members of our society who fall through the holes.

I now turn to other parts of the bill with which we have major problems. The Green Party opposes the “work first” dictum set out in clause 16—that work in paid employment offers the best opportunity for people to achieve social and economic well-being, and that the priority for people of working age should be to find and retain work. Those principles have no regard at all for the valuable contribution to our society that is made by people who do voluntary work in their communities, or for people for whom caring for children, the sick, the elderly, or people with major impairments is actually their priority at that particular time in their lives. This bill establishes one standard for the wealthy, who have a choice about whether their children are cared for by an at-home parent, and a different standard for those who are ill or disabled, or who do not have a partner on a high income. The latter are expected to be working in paid employment, regardless of what they consider is best for their children.

Clause 4 provides that the definition of income for the purposes of the Act may, for people in self-employment, be subject to rules made by Order in Council. That is bad law. Any future Minister will be able to change what is called income and what is not, without reference to Parliament. Income is a concept that is fundamental to social security. As such, its definition should be set out clearly in the legislation, rather than be subject to the whim of the Minister. New section 132H, under which such rules will be made, permits rules that determine how a person’s income is to be determined, where he or she has used assets of a business or trade for no consideration or for inadequate consideration. That will have the effect of introducing a de facto asset test for main benefits, which is a new and dangerous precedent.

Clause 9 amends section 74 of the Act, relating to deprivation of income or property. This provision currently operates on a discretionary basis, and provides that where there has been a deprivation, the Ministry of Social Development may decline to pay, or may reduce the rate of, a benefit. Clause 9 makes that discretion subject to rules made by Order in Council. It is not possible to regulate for the whole range of human experience, and people will inevitably end up in hardship because of the operation of strict rules-based criteria. That is particularly pernicious in the context of deprivation of income or property, where people can be affected by what they did years before they ever think or imagine they might be applying for a benefit.

Clauses 12 and 24 are also of major concern to the Green Party. They will require all benefit applications to be put in writing and on the form provided by the ministry, and to be for a specific benefit. There will be no provision for backdating entitlements except with the specific approval of the Minister, and then only in circumstances where the ministry has acted in error. That issue of backdating an entitlement has been addressed by the High Court, and, in my view, addressed very sensibly, in the judgment Scoble v Chief Executive of the Department of Work and Income. These clauses will restrict the application of the Scoble judgment in a manner that puts the onus on benefit applicants to apply for the correct benefit.

The benefit system is exceedingly complex, as I am sure members will understand, and no beneficiary should be expected to understand it fully—I doubt that most members in this House can. These clauses will have a harmful effect on some benefit applicants who do not understand the application system or the rules well, and they may prevent them from gaining adequate benefit or redress. I am also concerned at the use of legislation to overturn the intent of court decisions, as this bill seems to be doing.

Clauses 28 to 32 amend the “personal development and employment plan” provisions of the Act to include sickness and invalids beneficiaries in the requirement to develop such plans. There is nothing wrong with that in itself; if sickness and invalids beneficiaries are medically capable of doing some work and want to work, they should be given every possible help and encouragement by the department. However, the amendments introduce an element of coercion into the content of personal development and employment plans. When those plans were first introduced, I worked closely with the Minister and the Government to ensure there was genuine negotiation in the plan development process, and that the content of the plans was agreed between the ministry and each beneficiary. That concept now appears to have been abandoned in favour of coercion. There is a real danger that zealous case managers, following the new “work first” principles in the Act, will force beneficiaries into totally inappropriate activities. The similarly coercive approach taken in clauses 38 and 39 to unemployed beneficiaries’ job seeker agreements is also opposed by the Green Party.

Clause 36 provides that unemployed beneficiaries may be required to undertake “pre-benefit activities”—for example, looking for work or attending job search seminars—before they become entitled to the benefit. Again, the Green Party sees nothing wrong with that in itself. However, the bill provides that the Ministry of Social Development does not have to process the benefit application until the activity has been completed, and that the requirement to undertake a pre-benefit activity can be oral or written. These provisions have the potential to cause significant delays in the processing of benefit applications, and consequent hardship for applicants.

Although this bill has some provisions that the Green Party supports, the overall thrust is one of inflexibility, insufficiency, and coercion. We will be seeking to move amendments at all possible stages of the parliamentary process, in an attempt to improve what is at the moment a bill that, overall, further undermines the ability of our welfare system to reduce poverty. It is a real pity that this Government appears, at a number of levels, to continue to see itself as being in a bidding war with National to see who can blame and harass beneficiaries the most, rather than being a party that stands up for fundamental principles of dignity, sufficiency, and equity, in its administration of the country’s social security system.

Dr PITA SHARPLES (Co-Leader—Māori Party): Tēnā koe, Mr Assistant Speaker. The Social Security Amendment Bill has at its core a move by the Government to focus on beneficiaries by claiming the value—the absolute necessity—of people participating in the labour market and engaging in work as an appropriate outcome. At the same time, the bill states that the Government will continue to provide social and financial support for people with temporary or long-term barriers to work. It also appears to have as a consequential outcome a greater involvement by the State in the lives of vulnerable people. It does this under the guise of creating a more efficient support system to enable them to receive that to which they are entitled. We are very concerned about the increased surveillance of particular groups by the State in the face of increased freedom for others.

The bill contains a second clever move by the Government. In focusing on encouraging people to think of work—something the Māori Party would support—a critical question is not asked: what sort of work are we talking about? Is it the sort of work where people have to aspire to succeed in a low-wage economy, where people shift their sights from the peaks of the beneficiary mountain to the peaks of the mountains of the working poor? This is the working poor that the Minister of Māori Affairs frequently refers to as a positive outcome—the part-time, the seasonal, the low-paid workers, and the poor work conditions. “Get a job.” replaces “Have a life.”

What this bill, and many others introduced by the Government, fails to acknowledge is that every aspect of the economy is interrelated. On the one hand we sit by in this House today and watch $95.7 million being spent on reforming the social support system to supposedly create a work-focused system, and on the other hand we close our eyes to the fact that not one cent will go towards the creation of jobs that people want to get out of bed for—not one cent to enable the establishment of meaningful, adequately paid, secure employment.

This House must be alert to the fact that changes made in one area inevitably impact on others. The social security system is linked to the wage rates, is linked to tax exemptions, is linked to capital gains, and is linked to foreign exchange earnings. Not only do we have this Social Security Amendment Bill but yesterday we also had the first reading of the Appropriation (2005/06 Financial Review) Bill, and last evening the Taxation (Annual Rates, Savings Investment, and Miscellaneous Provisions) Bill was sped through under urgency. All these bills are related. They are all part of the whakapapa—the genealogy—of economics. Our question asks whose whakapapa it is.

Members should not get me wrong: we believe in the necessity of the safety net of the social security system, with its honourable intentions. We believe that it is right and proper that the State supports our most vulnerable citizens, to ensure that all New Zealanders have the right to enjoy quality of life. But, unfortunately, for too many of us it has had negative consequences, in that people have become entangled in that safety net. For some families that entanglement is now seen to be normal—indeed, almost a right. We in the Māori Party say that nobody has the right to be entangled in the welfare net of dependency or to see the entanglement as a right. And no society or Government has the right to promote such a view.

We need to have a very good look at what we are doing here. What has happened here in Aotearoa to our people, who are the constituents, is no different from what has happened to other indigenous people where the safety net has become a welfare trap. As a result, people have become alienated from contributing positively to their own economic health, wealth, and development. The values of the “I” and the “me” society have corrupted our traditional obligations to share resources and care. Is it the case in some families that our traditional values of sharing and caring become interpreted as “buying the booze for our teenagers”, “sharing the joint”, or “partying with the cuzzies” while the little ones are left to fend for themselves? This is an absolute corruption of what we for so long have considered to be our taonga tuku iho—those treasures handed down. This bill does nothing to address that situation.

We in the Māori Party have an acute interest in, and a commitment to, having our people actively involved in the real economy and being positive contributors to it, rather than being passive recipients and beneficiaries of the welfare State.

We will support this bill going to the Social Services Committee, but we say to the House that the debate on this bill is just as much about economic philosophy and direction as it is about social development and direction. The simple fact of the matter is that every economic relationship is also a social relationship, and we cannot continue to have the silo mentality of divorcing one from the other. Tēnā tātou.

JUDY TURNER (Deputy Leader—United Future): I rise on behalf of United Future for the first reading of the Social Security Amendment Bill. We are certainly prepared to support what appears to be a substantial amendment to the Society Security Act. The bill also appears to contain some very interesting new provisions.

United Future would like to signal some issues of concern, and we look forward to hearing from submitters on them. Firstly, we will be interested to hear what people think about the new clarification and definition of what constitutes full-time employment. Secondly, we will be interested to hear from people regarding the decision to no longer allow people on the unemployment benefit to use community activities as employment interventions. I understand from briefing papers that there is evidence suggesting that such activities have demonstrated negative employment outcomes. If that is true, then so be it. But when people have been out of work for a considerable period of time, it is often very difficult for them to demonstrate a work ethic to prospective employers. I have personally seen folk who can turn up every morning as a volunteer to a community project finally get work due to a reference from project leaders who clarify their keenness to work and their reliability, even when they are not being paid. So I look forward to hearing evidence and being convinced that this is the right move.

I am interested to hear about how this amendment bill will work for self-employed people who struggle to take an income off a new and struggling business. I understand there are some provisions around that. I also note that there are provisions to better support those caring for other people’s children—and members will know that United Future has been the proverbial dripping tap in the Minister’s ear in advocating for kinship caregivers, particularly grandparents raising grandchildren. We are yet to have clarified by the ministry whether the provisions I just mentioned apply to this type of caregiver. We certainly hope that they do and that there is some improvement for people who take on those responsibilities.

The other area of interest for us relates to changes to the independent youth benefit. United Future has always been concerned about the early encouragement for young people to become beneficiaries. If a minor needs to be cared for outside of the home, then payment should be made to the carer, not to the young person. However, we accept the concerns that this amendment bill is trying to address regarding young people who are discharged from the care of Child, Youth and Family, often before they finish high school, and young people who at the age of 16 or 17 would like to stay with their caregivers, who would be keen to keep them but want some support to help them do that. That is a really important issue that needs further discussion, and I will be interested to hear submissions.

Reducing the stand-down provisions raises some questions about the practical realities of temporary assistance, as currently experienced by Work and Income staff, measured against concerns about encouraging people to recklessly move out of work, without serious consequence. Again, we look forward to hearing discussion on that matter.

We are pleased to see new provisions to backdate benefits where recipients have been given erroneous advice by the department. I personally have come across a number of people who were given the wrong advice, and there were some weeks when they would have been entitled to a benefit that they did not receive. So considering the bills and debts they often accrue during that time, it is very fair that there is some retrospective payment to cover those errors made by the department.

I look forward to hearing from officials about why parents who lose custody of a dependent child will still receive another 8 weeks of benefit. There may be some good reasons for that, but they are not clear to me yet. I am sure we will get explanations around that. United Future believes that the benefit system should be work-focused where that is appropriate, so we are very happy to support the first reading of the bill.

A party vote was called for on the question, That the Social Security Amendment Bill be now read a first time.

Ayes 115

New Zealand Labour 50; New Zealand National 48; New Zealand First 7; Māori Party 4; United Future 3; ACT New Zealand 2; Progressive 1.

Noes 6

Green Party 6.

Bill read a first time.

Hon TREVOR MALLARD (Minister for Economic Development) on behalf of the Minister for Social Development and Employment: I move, That the Social Security Amendment Bill be referred to the Social Services Committee, and that the committee finally report back the bill to the House on or before 30 April 2007.

A party vote was called for on the question, That the motion be agreed to.

Ayes 115

New Zealand Labour 50; New Zealand National 48; New Zealand First 7; Māori Party 4; United Future 3; ACT New Zealand 2; Progressive 1.

Noes 6

Green Party 6.

Motion agreed to.

Sittings of the House

ANNE TOLLEY (Senior Whip—National): The urgency motion on the floor of the House is rapidly running out. We have one more bill to deal with, then we go into the adjournment debate. I seek leave of the House, during the adjournment debate, to extend the debate until its completion, even if we get to the tea break.

The ASSISTANT SPEAKER (H V Ross Robertson): Is there any objection to that course of action being taken by the House? There is none.

Mental Health Commission Amendment Bill

First Reading

Hon TREVOR MALLARD (Minister for Economic Development) on behalf of the Minister of Health: I move, That the Mental Health Commission Amendment Bill be now read a first time. At the appropriate time it is the Government’s intention that the bill be considered by the Health Committee.

This bill extends the term of the Mental Health Commission until 2015. It revises the functions of the commission and brings the commission’s terms in office into line with the Crown Entities Act 2004. Once enacted, the bill will repeal and replace certain sections of the Mental Health Commission Act 1998.

The commission was originally established in response to the recommendations of the 1996 Mason report, the culmination of an inquiry under section 47 of the Health and Disability Services Act 1993 in respect of certain mental health services. It began work in September 1996 and was established as a Crown entity, with a term of 5 years under the 1998 Act. The commission was established to ensure implementation of the national mental health strategy by monitoring and reporting on the performance of the sector. It was also tasked with reporting to reduce discrimination and stigma and promoting workforce training and development. The term of the commission has been extended twice—once in 2000 and again in 2003. The commission is currently due to expire, in legislation, on 31 August 2007.

This bill repeals section 10 of the principal Act and substitutes a new section 10. It amends section 13 of the principal Act. Part 2 details the transitional provisions in relation to the commission. Considering the support expressed by stakeholders in this sector for the retention of the commission and the important role that the commission has played in supporting development of the mental health sector, this bill is important legislation that will allow the commission to continue to serve the mental health sector well into the future.

This bill, which proposes the retention of the commission until 2015 and revises its functions to support the future direction of the sector, is a good indication of this Government’s wish to promote and protect the health and well-being of New Zealanders, in another positive step forward in the ongoing maintenance of an efficient, innovative, and exciting mental health sector.

Dr JONATHAN COLEMAN (National—Northcote): It is my pleasure to rise to speak in support of the Mental Health Commission Amendment Bill. National sees a role for the Mental Health Commission in monitoring and improving the New Zealand mental health system, and, as such, we wish to see the bill proceed to its first reading. The Mental Health Commission has done much over the past few years to destigmatise mental illness and raise public awareness. It performs some very good work, and, as a result, the general public now has a greater appreciation of just how common the symptoms of mental illness can be.

The National Party believes that there is indeed some real work to be done in mental health. The fact is that mental illness has a significant impact on the lives of New Zealanders, and that burden is growing, not decreasing. According to the New Zealand mental health survey released in September, nearly half of all New Zealanders will meet the criteria for having a mental illness at some time during their lives. One in five New Zealanders experienced a mental illness in the previous year, and that does not take into account the 0.3 percent of the population who suffer from mental illnesses with psychotic features. The survey also found that 16 percent of New Zealanders had thought seriously about suicide. About 5 percent had made a suicide plan, and 4 percent had attempted suicide. These are serious statistics indeed and are worthy of some consideration by members opposite rather than continued ad hominem attacks.

The reality is that under this shameful Labour Government, spending on mental health has increased by 75 percent since 1999 to nearly $1 billion per annum, yet there is no measurable improvement in the mental health of the nation. In fact, mental health statistics seem to be deteriorating. It is important to keep the focus on spending—

Hon Trevor Mallard: Ha! ha!

Dr JONATHAN COLEMAN: The member may laugh during this, but this is a very serious matter for many New Zealanders. Mr Mallard can smile and laugh, but this is something that the House should be considering. Members opposite might want to listen to some of this; it does not reflect well on their failure to actually take this seriously.

But I digress. It is important to keep the focus on the spending of taxpayer money in the mental health sector in the most effective manner possible. There has been a lot of money spent by this Government on strategic plans, studies, and bureaucracy, but the reality is that the money is not being targeted effectively. The Minister of Health needs to concede that the management of mental health services and the targeting of funds in this sector are not delivering the results New Zealanders deserve.

The recent Commonwealth Fund report into primary care in seven OECD nations surveyed the views of primary-care doctors. When it came to ability to care for patients with mental health problems, less than half the New Zealand practices surveyed felt that they were well prepared. The National Party believes that we need to be looking to primary care—[Interruption] Mr Assistant Speaker, if these members want to continue their conversation would they like to do it outside, because this is a serious matter.

The ASSISTANT SPEAKER (H V Ross Robertson): Can I just say to the members on my right that I would like them to look at Speaker’s ruling 57/3(1) by Speaker Statham. Interjections are to be rare and reasonable, and, as a former colleague used to say, witty. There are too many.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think, given the member’s recent history, it is a bit on the nose for him to invite members on this side to step outside.

The ASSISTANT SPEAKER (H V Ross Robertson): If the member did such a thing, then he should withdraw and apologise, but if he did not, I will take the member’s word. He is an honourable member.

Dr JONATHAN COLEMAN: I have nothing to withdraw and apologise for, but I make the point that with Mr Mallard’s history he might want to listen—

The ASSISTANT SPEAKER (H V Ross Robertson): Just get on with the debate.

Dr JONATHAN COLEMAN: OK. [Interruption] Mr Assistant Speaker, do you think I should request to be heard in silence? This is a serious matter. There are people out there who want to listen to this speech.

The ASSISTANT SPEAKER (H V Ross Robertson): The member can seek leave for that. He is perfectly entitled.

Dr JONATHAN COLEMAN: I seek leave for this speech to be heard in silence. [Interruption]

The ASSISTANT SPEAKER (H V Ross Robertson): The member can require it if he wants to.

Dr JONATHAN COLEMAN: OK, I require it.

The ASSISTANT SPEAKER (H V Ross Robertson): The member has asked for silence, and I ask other members to oblige.

Dr JONATHAN COLEMAN: Thank you, Mr Assistant Speaker. The recent Commonwealth Fund report into primary care in seven OECD nations surveyed the views of primary-care doctors. When it came to the ability to care for patients with mental health problems, less than half the New Zealand practices surveyed felt that they were well prepared. The National Party believes that we need to be looking to primary care to take on more of the workload in mental health, but to do so, general practices need the resources and training to operate effectively. We would like to see the Mental Health Commission pushing the Government on this, playing a major role in monitoring the subsequent outputs, and providing an objective assessment of the success of such projects.

Hospitalisations for attempted suicides are a good indicator of the mental health of a nation, and the reality is that they have gone up by almost 20 percent since Labour came into power. If one looks at the hospitalisation rate for suicide attempts made by young women since 1999, one sees that they have risen by 45 percent. Suicide attempt statistics represent measurable outcomes in mental health, and by those criteria this Government is failing the public in the management of the sector.

This Government could be doing much more to target the needs of those affected by mental illness. The Government has talked up its 10-year action plan for mental health, Te Kōkiri, and put an emphasis on prevention, but it is all spin and waffle. The specifically listed action for promotion and prevention in the Government’s new 10-year mental health plan is to spend 3 years reviewing the strategic framework, to develop a new framework to develop a plan to set out a strategy.

Workforce development is a major issue in mental health. Earlier this year the Otago District Health Board had to pay out $60,000 to two experienced enrolled nurses in order to remove them from their jobs, following a Ministry of Health reminder that enrolled nurses cannot work in acute care. Mental health nursing is an area where experience is what really counts. All this meant was that the Otago District Health Board ended up two nurses short in acute mental health, and it cost the board $60,000 to arrive at that lamentable situation. A major problem in this sector is that the level of qualification for staff is being raised, thereby excluding many experienced mental health workers. Not only are the staff not available but even if they were, many mental health providers could not afford to employ them.

Then there is the disgraceful mess over the Lake Alice Hospital compensation payout. Michael Cullen has admitted that Cabinet decided to withhold some of the compensation awarded to claimants as a result of the inquiry into Lake Alice Hospital. Continued delays in paying out compensation to Paul Zentveld, a claimant in the case, are completely unsatisfactory. After experiencing outrageous treatment at Lake Alice Hospital, the claimants agreed to settle with the Ministry of Health in two separate compensation rounds. Mr Zentveld had $35,000 secretly lopped off his compensation payment by the Ministry of Health and found out about it quite by chance. He took the ministry to court and he won. Rather than paying up with good grace, this Government is appealing against the decision in the High Court. This is obviously because the Minister knows that the implication of this decision is that up to $3 million will need to be paid to the other second-round claimants who had part of their compensation secretly withheld. This Government keeps droning on about social justice, but when it gets the chance to actually apply some, it ducks for cover. Minister Hodgson needs to stop dodging the issue, write the cheque to Mr Zentveld, and pay back any money that his ministry rightfully owes the 87 other second-round claimants.

Furthermore, there are issues around the mental health blueprint and the funding being applied by various district health boards in fulfilling the blueprint. It is clear that adult and forensic services are being funded to the levels the blueprint dictates, but other areas such as child and adolescent services are falling woefully behind. Yet, at the same time, district health boards are underspending their ring-fenced mental health money to the tune of $18 million a year, much of it in Auckland. Something is grossly wrong here. Mismanagement in the mental health sector is rife.

So all is not as well as it might be in the mental health sector. There is much work for the Mental Health Commission to do, because this Government is spending more and more on mental health but the results are not getting any better. We think the Mental Health Commission has a real future. There are some people of real ability and knowledge at the commission who have extensive knowledge of the mental health system. We think the commission could have a wider role to play, however. We would like to see the commission doing more to hold this Government to account, by speaking out on its performance in mental health. The commission needs to be more demanding of this Government in terms of mental health outcomes. National would want to see the commission monitoring district health board spending in the mental health arena, measuring outputs objectively, and ensuring that the public money spent in mental health really is making a difference to the health of all New Zealanders.

We feel, however, that an extension of the life of the commission to 2015 is excessive. Public spending should produce results, and we would support the extension of the life of the commission until the end of 2009, at which time its output should once again be reviewed. The commission should in no way feel threatened by this, because National supports the work that it does. However, what gets measured gets done, and we feel that a further review of the work of the commission in 3 years’ time is entirely reasonable. The National Party looks forward to working with the commissioners while in Government.

BARBARA STEWART (NZ First): It is with pleasure that New Zealand First supports the first reading of the Mental Health Commission Amendment Bill. It is a very short bill, and we will be taking only a very short call.

This bill is needed to amend the Mental Health Commission Act, so that the term of the Mental Health Commission can be extended to 2015, and so that there can be extensions to the functions of the Mental Health Commission. The current Mental Health Commission should end its term in August 2007; we do not want this to occur.

The Mental Health Commission is a very important body. It provides many important functions to very many people right throughout New Zealand. We understand that there has been extensive consultation with the mental health sector and mental health consumers. They want the Mental Health Commission retained, and they approve of the changes to its functions.

New Zealand needs and wants the development of an integrated, effective, and efficient system of care for mental health. We need to protect the well-being of New Zealand. New Zealand First believes that the Mental Health Commission has a very real future, and we support this bill.

SUE KEDGLEY (Green): The Green Party is, like everyone else in this House, delighted to support the Mental Health Commission Amendment Bill. We think that the Mental Health Commission has been a real success story. It has been a really independent, respected, and credible voice, and we strongly support its continuance. The Health Committee has had some dealings with the Mental Health Commission over the last 6 years. We have been impressed by the calibre of its submissions and its advice. I think it is a good model to have an independent voice in an area like this. I might say that there was another public health commission, which, regrettably, was disbanded some years ago. I think that is unfortunate.

As previous speakers have said, it is extraordinary that mental illness is so prevalent in New Zealand, and continuing to rise. It calls into question much about our society that we have such a very high rate of mental illness. But, also, there still is a huge stigma and lack of understanding around mental illness. The Mental Health Commission has done some excellent work in some recent campaigns in this area, which I think is contributing a significant amount to reducing the stigma, but there is a major amount of work to be done still.

It is true that we hear terrible stories about what is happening to some people who are suffering from mental illness in our communities, and also about the crisis among mental health workers. There is a huge amount to be done in this sector, and for that reason we are absolutely delighted to support the Mental Health Commission Amendment Bill and to extend the functions and life of the commission. As I say, I think it has earned the support of all members of this House, and indeed of New Zealanders. It has been a genuinely independent, respected, and credible voice in this area. It has earned its keep.

TE URUROA FLAVELL (Māori Party—Waiariki): Tēnā koe. Tēnā tātau katoa, meri Kirihimete ki a tātau.

In looking for a kōrero on which to start a discussion on this bill I came across these words: tēnei te kākano ka ruia nei, morimoritia kia puāwai ai hei maunga ringa mā ngā whakatipuranga. This is the seed that was sown, then nurtured to blossom forth, to be held as a prized possession for the generations to follow. I think the general gist of this kōrero is that we must always consider the next generation. The flourishing of our mental health and well-being, the growth of our spiritual foundation, our wairua, the strength of the metaphysical, the hinengaro, the blooming of the ngākau, our emotional strength, is essential to the prosperity of the people. Our future generations will be better if their mental health is in good shape. We really need to consolidate and give shape to families who value mental health and who see that as a part of their pathway forward.

It is because of these beliefs that the Māori Party is delighted to support the Mental Health Commission Amendment Bill, to extend the term of the commission until 2015. On 8 October this year, before the ink was dry on the media release, my humble colleague Tariana Turia was quick to commend the health Minister Pete Hodgson for announcing this legislation to extend the term of the commission. We have valued the work of the Mental Health Commission, which has done much good work on the implementation of Te Tāhuhu, the mental health strategy.

The Māori Party wants to put on record our appreciation and recognition of kaumātua Denis Simpson and the commissioners Ruth Harrison, Mary O’Hagan, and Ray Watson of Ngāi Tahu and Te Ātiawa. I want to mihi to the excellent quality of these people. I know of the work of Ray Watson through his previous role as chief executive of Lakeland Health in Rotorua and Taupō. Denis Simpson of Ngāti Awa has an impressive reputation as chairman of Te Kaunihera Kaumātua Taurahera Council, the Wellington Council of Elders; Ruth Harrison has considerable experience across the disabilities sector; and of course Mary O’Hagan is extremely well known in the mental health field, having initiated the mental health service user movement in New Zealand in the late 1980s and having been the first president of the World Federation of Psychiatric Users.

I have taken time to touch on the credibility of these members and the expertise they bring to their work, the extensive clinical, professional, and managerial experience they demonstrate in the mental health sector, and the unique set of skills they bring to this role, because it reflects on the strength of this commission. This is a commission that is truly independent, a commission that is not afraid to call it as it sees it, but does what is required, giving free and frank advice to the Minister. I must say that the question of independence is always an area of concern for the Māori Party with these sorts of bills.

One of the most crucial functions of the commission is the monitoring role. This bill places too many constraints on this role of the commission. We believe that amendments need to be made to the bill to strengthen the monitoring role, and to make it more in line with the current Act, including monitoring the performance of the key agencies, including district health boards and the Ministry of Health. We are particularly concerned about the two qualifiers included in this bill that act to constrain monitoring to only when the Ministry of Health agrees to it. From our point of view, this is a Clayton’s style of monitoring. We have seen this before, across Government. If we cast our memories back to the distant days when closing the gaps was a priority, the House will recall the raft of reports and projects called for, under the heading that never even made the light of day. Te Puni Kōkiri was caught in the crossfire in the advice that it was obliged to give, in the name of free, frank, and fearless advice. But the constraints became apparent when the Ministers or the ministries that were subject to its monitoring felt that the criticism was too harsh, too critical, or too bad. So somewhere in the bowels of Te Puni Kōkiri there is a whole series of closing the gaps reports that are going nowhere fast. I reckon that this would be quite a good item for a select committee inquiry.

But I come back to the Mental Health Commission Amendment Bill. The qualifiers in this bill need to be taken out. The commission must maintain its independent oversight and monitoring watchdog role. It will not be able to do this under the provisions of the bill—to be independent of Government agencies—if its very work programme is constrained by the approval of the Ministry of Health. Indeed, we believe that it would be very useful to explore the notion that the commission should have a statutory role under the Mental Health Act.

There are three purposes for this: firstly, to maintain people’s rights; secondly, to maintain services delivered; and, thirdly, to report back. There would be a need for a consequential amendment to the Mental Health Act, but it is certainly an idea that we would like to see given further life during the progress of this bill.

There is no denial that the sector greatly values the independence, the autonomy, and the fresh perspective brought to the mental health field through the work of the Mental Health Commission, in particular the development of its blueprint for mental health services—a plan that sets targets for resourcing and services for mental health consumers. This has been invaluable and well received by consumers and providers alike. They have played a significant role in tackling stigmatisation and expanding services for people with mental health issues.

In mid-year we brought to the House the study published in The Lancet, which reported a significant level of self-reported experiences of racial discrimination by Māori, of Māori, Pacific, and Asian New Zealanders, including verbal and physical abuse and unfair treatment in health care, work, and housing. The study showed that Māori were almost 10 times more likely to experience discrimination in three or more settings than their non-Māori counterparts, and that further, they were more likely than Europeans to report low mental health. In this context the courage that the Mental Health Commission has shown in speaking up for the rights of the vulnerable is admired. We all have a part to play in addressing this. We, the Māori Party, are stepping up to the mark, and next year we will be putting forward a bill to address institutional racism.

Finally, while I am not a sailing man, I came across a kōrero recently that I think is very thought-provoking. I believe that it was a Te Arawa person who said it. This is what he said: “The pessimist complains about the wind, the optimist expects it to change, the leader adjusts the sails.” It was a Te Arawa person who said that.

We believe that the Mental Health Commission Amendment Bill helps to address the fundamental issues associated with the treatment and response to mental health in Aotearoa. It is not perfect by any means, and we look forward to the select committee process to ensure that the necessary changes are made. If they are not, then the Māori Party will be back to this Chamber with Supplementary Order Papers in the Committee stage, to ensure that the bill can truly support the very important work of the Mental Health Commission. Kia ora tātou.

JUDY TURNER (Deputy Leader—United Future): I stand on behalf of United Future to speak in support of the first reading of the Mental Health Commission Amendment Bill. As the Māori Party member was keen to mention some of the fine staff who work for the commission, I would also like to state that United Future is thrilled that Selwyn Kātene is now the general manager of the Mental Health Commission. We believe he will be a great contributor to the work of the commission.

This bill is pretty straightforward, in that it restates the functions of the commission and adds some new functions to the list regarding the mandate under which it serves. First of all, there are some general understandings about the commission needing to be independent. It is a client-focused honest broker that wants to make sure the interests of mental health patients are constantly advocated for and listened to. It is a place where people who have experienced mental health services, and would like to suggest ways in which those services can be better delivered, can contribute and send their ideas to someone who will listen seriously and take their advice.

Obviously, one of the key roles of the commission is advocacy. It also works as a facilitator, helping organisations to collaborate their efforts more cohesively, and communicating on that matter. Also, one of the most important roles I have seen the commission working in is the area of communicating within the community and breaking down the areas of stigmatisation that people suffering from mental health problems often incur.

One of the things we need to understand when considering the relevance of the commission is how essential its work is. I have read statistics that show that at any given time, about 3 percent of our population is in need of mental health services. When we do the maths around what we currently deliver in mental health services, we find only half that number are accessing help. That means there is a lot more work to be done. Certainly, the last thing we need to have is a downgrading of a commission that was set up to make sure that the Government is constantly held to account by the people who most need that help and support.

There are also some interesting ideas around stimulating innovation amongst policy makers, and also around the ability to undertake research where that is considered helpful. I agree with the National Party about the fact that we want to see a real movement in mental health services towards better services in the primary health care area. I remember that when the Hon Annette King was Minister of Health, she indicated that there was some funding in the pipeline for primary mental health care. It was on her “to do” list, and high up on that list, as part of the funding to primary health organisations. I am keen to hear the new Minister reiterate that commitment, because I think it is an area that we currently do not do well in. Certainly, primary health care in regard to this matter is really the fence at the top of the cliff, but we need to see better service provision put in place.

I do not think I will take any more of the House’s time on this matter, other than to say we are very supportive of this first reading.

HEATHER ROY (Deputy Leader—ACT): I rise to speak to the first reading of the Mental Health Commission Amendment Bill on behalf of ACT New Zealand. ACT will be opposing this bill, but not for reasons that might immediately be apparent. There are two main reasons.

But firstly I would like to address the barrage that Dr Coleman had to contend with when he was trying to discuss some very important issues relating to mental illness. I think that Labour members have shown that they have very little understanding of mental health issues in this debate. Mr Mallard, who has never shown any interest in mental health issues before, stood up and spoke on behalf of his party. He did not even manage to fill his 10-minute slot in speaking about what good work the Mental Health Commission might or might not have done, but instead took the opportunity, when he sat down, to then lead a barrage from his Labour colleagues about Dr Coleman. Luckily, I was sitting very close to Dr Coleman and could hear what he was saying; he had some very valid points to make. The Labour members that participated in that very shameful behaviour should apologise to those people in New Zealand who suffer from the very serious consequences of mental illness. If those members had something to say to Dr Coleman, then they should not have said it when the proceedings of this bill were taking place. [Interruption] I am ashamed to be part of a House that thinks that that sort of behaviour—the sort of behaviour that we are hearing right now—is participated in.

Madam SPEAKER: I would ask the member to address the bill, please.

HEATHER ROY: Yes, I will. I am coming back to the Mental Health Commission Amendment Bill, which is a very important bill, I have to say.

ACT New Zealand opposes this bill, firstly, because a mental health commission should not be necessary if the mental health division of the Ministry of Health were doing its job properly. I see in the explanatory note of this bill that the Mental Health Commission’s role is being expanded, and our opposition to this bill is no reflection at all on the very good work, particularly in the area of research, that the Mental Health Commission does. But this bill is not necessary because that work should be being done by the mental health division of the Ministry of Health. The commission’s role is being expanded so that it will now advise and report to the Minister on the implementation of the national mental health strategy—something that those working in the mental health division of the Ministry of Health should already be doing—and, secondly, it will now promote and facilitate collaboration and dialogue about mental health issues. Again, that is a role specifically for the Ministry of Health.

The second reason that ACT New Zealand is opposing this bill concerns a matter that Māori Party members have raised, and I support them wholeheartedly in that matter. They worry, very clearly, about the independence of the Mental Health Commission. The commission consists of three commissioners and 16 core staff, and seven members on the advisory committee, as well—and they are appointed by the Ministry of Health. The commission’s independence, then, is very much in doubt. If we are to have a Mental Health Commission—and it is clear that this bill will go to a select committee, because ACT is the only party opposing it—then these things need to be taken into consideration. I would urge the Health Committee, when it considers this bill, to consider very carefully the issue of the independence of this commission, and to write those relevant clauses into this legislation specifically.

There is a great deal of difficulty with the area of mental health in this country. Three percent of the population at any one time requires treatment for a mental illness. That is quite a high proportion, but it is consistent with that in other populations around the world.

The main problem in the area of mental health is that of workforce shortages. Doctors and nurses are being recruited constantly, particularly in the area of mental health—[Interruption]—and it is a pity that, again, Labour members cannot see fit to listen carefully to this debate, when we have people in this country suffering badly from mental illness. Locums are the norm in many psychiatric departments in the hospitals around this country—not locums who come and spend any length of time in New Zealand but, frequently, locums from America and the United Kingdom. They are well-trained locums, but they come, usually, for a period of only 3 to 6 months. If any area requires continuity of care, it is the area of mental health, and having continuity of care is one of the big problems in relation to the workforce shortages experienced in the psychiatric area.

As one other speaker also alluded to—I think it was Dr Coleman—I, too, lament the inability of well-experienced, enrolled nurses to work in this sector any longer.

Madam SPEAKER: Excuse me, but would members please keep their private conversations at a level that enables the member to be heard. Thank you.

HEATHER ROY: Thank you, Madam Speaker. Enrolled nurses have been completely sidelined so that they are now able to work only either under the supervision of registered nurses in general practice—which precludes many of them, because some practices do not employ registered nurses—or in the area of aged care. The mental health sector was propped up very well and very ably by experienced enrolled nurses. Those nurses had a lot of skill and many, many years—in some cases, up to 20 years—of experience in the area of mental health. Sadly, that is a great loss to the mental health sector.

Blueprint issues and district health board underspending are also of great concern. Those should not be issues that have to be looked at and commented on solely by a mental health commission. Again, they are areas that should be looked at by the mental health division of the Ministry of Health, and it seems that this is not the case. One billion dollars, nearly 10 percent of the health budget, is now spent on psychiatric care—the care of the mentally ill.

The Mental Health Commission is due to expire on 31 August 2007. It should not be necessary to extend that term because, in the first instance, the commission was put in as a short-term measure. The role that it has played should have been picked up and run with by the Ministry of Health. Unfortunately that has not been the case, so we will have, effectively, a doubling up of people, a doubling up of numbers, and a doubling up of roles, because the Ministry of Health is failing in its mission to provide adequate care for those with mental illnesses in this country.

ACT New Zealand opposes this bill for the two reasons I have pointed out: firstly, the lack of independence of the commission and, secondly, the fact that the commission should not be necessary if the Ministry of Health were ably carrying out its role in this area.

A party vote was called for on the question, That the Mental Health Commission Amendment Bill be now read a first time.

Ayes 119

New Zealand Labour 50; New Zealand National 48; New Zealand First 7; Green Party 6; Māori Party 4; United Future 3; Progressive 1.

Noes 2

ACT New Zealand 2.

Bill read a first time.

Bill referred to the Health Committee.

Adjournment

Sittings of the House

Hon Dr MICHAEL CULLEN (Leader of the House): I move, That the House do now adjourn until 2 p.m. on Tuesday, 13 February 2007, and that the sitting days in 2007 be as follows:

February 13, 14, 15, 20, 21, 22, 27, and 28;

March 1, 13, 14, 15, 20, 21, 22, 27, 28, and 29;

April 3, 4, and 5;

May 1, 2, 3, 8, 9, 10, 15, 16, 17, 22, 23, and 24;

June 12, 13, 14, 19, 20, 21, 26, 27, and 28;

July 17, 18, 19, 24, 25, and 26;

August 7, 8, 9, 14, 15, 16, 21, 22, and 23;

September 4, 5, 6, 11, 12, 13, 18, 19, and 20;

October 9, 10, 11, 16, 17, 18, 23, 24, and 25;

November 6, 7, 8, 13, 14, 15, 20, 21, and 22;

December 4, 5, and 6;

and that the House do, at its rising on Thursday, 6 December 2007, adjourn until Tuesday, 11 December 2007.

Could I begin, Madam Speaker, by congratulating you on your year. Your cool—at times, icy—wit is starting, I think, to exert some control, even over those who are not used to having women in control of them. I also congratulate Mr Deputy Speaker on his always courteous manner within the House, the Assistant Speakers—and particularly I call upon the honourable Ross Robertson in that respect—the Clerk’s Office, the Hansard staff, the messengers, the security staff, our secretaries, ministerial staff, research units, media staff, and anybody who I have missed out in that long list, because I am sure there is somebody who does not come within those particular categories.

This year, 2006, has been a fascinating year. We can look at the achievements made in just the last 2 or 3 days. The Government has put out an energy strategy. The Government has passed a tax bill, which Bill English admitted yesterday that National tried to do but could not get it through Parliament—could not even get it through its own Government. We put through a major rewriting of the telecommunications legislation. We got a tax discussion document out today on the international tax regime, to fix up the mess that the National Government put in place in 1991. Tomorrow we release a new tertiary education strategy. And that is just from Monday to Thursday. In the meantime, all that National has done is to try to comb its hair in the mirror.

At the start of the year we had a Government with a secure majority, and two major parties: one centre-left, and one trying to be centre-right but actually veering off to the far right. Now we have a Government with a secure majority and—if we are to believe National—there are two major centre-left parties in Parliament. The centre-right party appears to have disappeared within the last couple of weeks. It is not just a new face; it is a whole new book that we are supposed to believe. Apparently, it is now a Coke versus Pepsi battle, going down to 2008. The trouble is that we are the real thing; they are Pepsi. That is the problem those members will have.

We can look at National’s amazing flip-flops. It has been sort of Opposition by press statement and speech. Race Ōrewa has gone. Nuclear issues are fixed. National is saying: “Do not worry, US, we will not change the policy.”, and on industrial relations, it is saying: “We are going to keep the current industrial relations Act.” On Iraq National is saying: “We should never have been there.”, on the Exclusive Brethren it is asking: “Who are they?”, and on tax it is saying: “We are back with Mr English, too. We will have small incremental changes as we can afford them, and we are fiscally responsible.” Well, I thought that was what I had being saying for the last couple of years. That is Mr English’s bold new policy. He went on Morning Report especially to tell the nation that it was the National Party’s policy.

On the issue of climate change, of course, National members are now true believers. But the problem is that that is not what Mr Key has been saying before on climate change. He now says that he firmly believes in climate change and always has, yet he used to say it was all a hoax. It was all a hoax, but now he firmly believes in it. This is a man who firmly believes in a hoax. It is not surprising. He is the only man I know of who can remember not opening one email 18 months or so ago. He must receive very few emails if he can remember that the one he did not open came from the Exclusive Brethren.

Of course, Mr Key has done other flip-flops. He was asked: “Do you think New Zealand should have taken part in the invasion of Iraq?”—to which the appropriate reply is that the Iraqis probably would not have noticed had we done so—but he answered: “No, I do not. The position from the National Party caucus at the time was that they did not think New Zealand should send combat troops to Iraq. Ah, what we thought was, and what I felt was, that America and the coalition of the willing had the right to take action in Iraq, because at that time the world believed Iraq had weapons of mass destruction.” In other words, he believed America was right, but he believed that he should not have backed America.

That is not what Mr English said at the time, because—as Dr Brash now tells us—he sat there silently saying that we should not go, Bill says: “We would have gone if we had been the Government.”, and John now says: “We would not have gone.” Well, I do not know whether people can follow all that, but I am completely lost through it all.

Mr Key is a man who is now, what, 48 or 49. At the time of the Springbok tour he was about 23. That is the kind of age when events impress themselves on us. He has said that he cannot remember the Springbok tour. Why? Because to remember it is to remember that he held a position on the Springbok tour. There was not a single New Zealander who did not have a position on the Springbok tour. Dr Brash was opposed—I can remember that quite well. Mr Key cannot remember. Why? Because it is politically inconvenient for him to remember what he was doing on that particular issue.

On industrial relations, Mr Key said 2 years ago that there was nothing wrong with the Employment Contracts Act. Then he said a couple of days ago that National was not planning to make any major changes to the Employment Relations Act. Well, which is it? Does he back the Employment Contracts Act or does he back the Employment Relations Act? The reason he cannot choose between them is that he does not know what the differences are. He has not thought about it. When someone gets up in the morning and asks himself: “What has happened to my Merrill Lynch shares overnight?”, he is greatly disinterested in what happens in employment relations policies.

The fact of the matter is that John Key is the man who went to Britain to be told what to do. He came back, and he is David Cameron without the substance—David Cameron without the bicycle and with only the VIP car. That is what he is at the present time.

John Key is the man who now makes National’s policy on the hoof. Can people imagine a Labour Party where the leader of the party gets up and, in three speeches, overturns every policy on which the party ran at the last election—just like that! Every statement that Mr Key makes is utterly vague and utterly meaningless. He is a walking billboard, saying no more than three words of any significance, and when he does utter them, they are utterly confused.

When Mr Key was asked his views on civil unions, he said that he thought the Civil Union Bill was a gay marriage bill. Then, when he was talking to gay people on www.gaynz.com, he said that marriage was not being asked for in the civil union bill. When he was asked how he voted, he had to admit he had voted against it. Did he vote against it because it was a matter of principle? No, he said—look at that! He waves his biro and says “No”—he voted against it because he thought that was the way to vote to please his electorate. There is a man of conscience! We have a conscience vote and he says: “Oh look, my conscience is that way. I am this way, but my conscience is that way.” At least Dr Brash pretended he had changed his mind honestly on the process; Mr Key never had a mind on the issue, at all.

What we had with Don Brash was a lemon curd pretending to be a pavlova. That was Dr Brash as the National Party leader. What we have with John Key is a blancmange pretending to be a fruit salad. That is what we are going to face between now and the election.

Mr Key’s deputy is Bill English, a man who nurtures more grievances than anybody I have ever met in my life. He is a man who will back John Key to the hilt—and if he ever gets the chance, right in it will go, and he will try again to be the leader. He is now saying about John Key exactly what he said about Jenny Shipley. “I will back her all the way through to the next election,” he said about Jenny Shipley, and: “I will back him all the way through to the next election,” he says about John Key—and we already know that it is not true.

Then there are the all the new disenchanted. Poor Lockwood Smith! He asks one question every day. It is the same question, but it does not matter. Look where he is! He bought a new pair of speedos and he still did not get on to the National Party front bench. He saw Maurice Williamson promoted on the grounds of Maurice’s outstanding performance in the House. Maurice has not asked a single question all year, as far as I can remember, and has given no more than two speeches. Poor old Lockwood Smith has been overtaken by him in the race back to the front bench for all the retreads in the National Party.

Helen Clark and I are now facing our fifth National leader and our seventh National deputy leader. Only a brave person would lay any money on those numbers staying the same between now and the next general election. Roll on No. 6, roll on No. 8, roll on No. 7, and roll on No. 9. Merry Christmas!

JOHN KEY (Leader—National): That was Michael Cullen’s “I’m 10 percent behind in the polls” speech. Frankly, all it proved is that Michael Cullen needs a holiday, and in 18 months he will get a permanent one. Do not worry about that.

Hon Trevor Mallard: Give us a new one, John!

JOHN KEY: Trevor should go back to his stadium.

Madam Speaker, I begin by wishing you a very merry Christmas. I also express my gratitude to those who keep Parliament running: you, Madam Speaker; the Deputy Speaker, Clem Simich; the Assistant Speakers, Ann Hartley and Ross Robertson; the Clerk of the House, David McGee; his staff; the select committee personnel; our friends at Bellamy’s; the Hansard writers; the security and parliamentary travel staff; of course, the VIP drivers, who may well save me buying a third Navman in 6 weeks; my colleagues and our long-suffering families; and, of course, the messengers.

I say to the messengers that they have served me well in the last 12 months, but I have one message that I will deliver myself. I will not be asking you to deliver it, Madam Speaker. It is to the Government, and the message is a pretty simple one: “Enjoy it, fellas, because you are on borrowed time.” That is for sure. As we saw from Michael Cullen’s speech, their days are numbered. They are a Walkman Government in an iPod world. They are dinosaurs, that is what they are. They are gone. That member does not know what an iPod is, that is the problem. He should plug it into his ears; it would be better than listening to Helen Clark, trust me. This was a Government of leak and spin, smoke and mirrors, and truths and half-truths. The standards were so low the only instruction from the Prime Minister to her MPs was “Don’t get arrested.”, and Taito Phillip Field could not even stick to that one! That was the situation.

In 2006 we saw something we had not seen for a long time—Labour’s calculating, self-serving acts were even worse than the harshest critics ever thought possible. Labour members got caught red-handed with their hands in the till for $800,000, and they have spent the entire year refusing to pay the money back. That is what they did. They spent $800,000, and they are refusing to pay it back. The Government came up with a whole lot of excuses. The first of them, from the Prime Minister, was that they had done it twice before, so why could they not have another go! That was a good one. The second one was that it was not electioneering, which, for the record, is defined as soliciting a vote. Now, if giving out a pledge card and saying to people “Follow these policies and vote for me” is not soliciting a vote, I do not know what is. But the best of the excuses came when Helen Clark told the country that the referee had changed the rules after the game had finished. I hate to tell her, but the referee in this case was none other than the co - New Zealander of the year, Auditor-General Kevin Brady, who wrote to her months before the game even started and tried to come and see her to explain the rules exactly. But she was too busy parading overseas in “UN Idol”. That is what she was doing.

So the Labour Government did what a Labour Government always does. Out came the personal attacks. No one was safe, not even APN, the owners of the New Zealand Herald. They were not safe. Dr Cullen was dispatched to tell the New Zealand Herald in no uncertain terms that if it did not stop writing the truth about that rort, it would have a tax liability bigger than his surplus. Oh, Dr Cullen does not like it. He should not worry. We can give it on this side of the House as well as take it, I tell him. Anyway, it is not surprising. What we found out in October is that Mike Williams went to the Labour Party conference and said that Labour was bankrupt. The next week Helen Clark came out and said that she had discovered a new-found interest in State-funded elections. There is a convenient thing. Well, we have a little tip for the Prime Minister. When she comes back to the House next year and tells us about the merits of State-funded elections, she should spare us the spin on this side of the House, because taxpayers are sick of paying for things that Labour Governments waste their money on, and they sure as hell do not want to pay money to bail out a Labour Government that is bankrupt.

What else happened in 2006? It will be remembered for one thing: the case of Taito Phillip Field. On this side of the House, we have “Bob the Builder”. On Labour’s side of the House there is “Taito the Tiler”. The only difference is that on this side of the House we pay market rates for what we get done. So what did Helen Clark do? It was pretty normal, right? She called an inquiry, spent half a million bucks, parked him on the back bench, and told Labour he would be brought back—she has done it dozens of times before. He knew the track. The only problem was that the Ingram report was so bad and left so many unanswered questions that she could never bring him back, so the police were called in. It was all very interesting. We had months of negative headlines, so what happened? The Prime Minister said that they had better find a diversion, so she wandered down to the seventh floor, got her trusty colleague Trevor Mallard, and told him to give Auckland 2 weeks to decide whether it wanted a billion-dollar waterfront stadium. But poor old Trevor could not even manage to get through week one before we had his style of Heineken diplomacy, when he told Aucklanders they were visionless, and by week two it was gone.

Anyway, it was not all that bad, because it proved one thing—that Trevor’s career path has now been successfully marked out. He will never be Minister of Finance. We know that one. Mind you, he did not have quite as bad a year as Steve Maharey, who got sacked as the tertiary education Minister and is now the only living New Zealander who believes that when one’s portfolio gets given to Dr Cullen, it is because it is running so well. Michael should not worry; it is a compliment. I say to him that we see the best in everyone, son, so do not worry about that. He might as well enjoy the next few months.

It was a kind of interesting year, was it not? Hospital waiting lists were wazoo. Another Budget—Michael Cullen’s night—was sunk by a lack of tax cuts. The Prime Minister went green but forgot to mention that we have emission targets rising faster than Kyoto no-shows Australia and the US. She forgot to tell the country that 85 percent of her new electricity generation is from burning coal and gas and that we are chopping down trees faster than we are planting them. Then she went off to the Labour Party conference and said that the country was going carbon neutral! Her only minor problem was that she forgot to tell David Parker before he did his press conference on Monday. That was a minor issue. Anyway, do not worry, we treat that statement with the same contempt as we do her ambition to get us in the top half of the OECD. Neither of those will happen.

Anyway, enough of the tired old Labour members; they are yesterday’s news, so to speak. The future does not lie with them; the future lies with the National Party. If I do say so myself, with my leadership and that of my deputy, Bill English, and my incredibly talented team, that is where the future lies. The best years of our country and of our party are in front of us, not behind us.

Darren Hughes: Oh, that’s another David Cameron line!

JOHN KEY: Darren should not worry, he will grow up one day and be a big boy; it is all right. He will get out of nappies—it eventually happens to most of us. Let us take a moment to celebrate some fine New Zealanders who did some wonderful things. We like to look at the best side of things in life. We want to celebrate the entrepreneurs, the creative New Zealanders: Sam Morgan; the fine men and women of 42 Below, who made something work on the world stage and did fantastically well; our sportsmen and sportswomen; and the All Blacks, who had a great year as they defended the Tri-Nations and the Bledisloe Cup, won everything in Europe, and are on their way to winning the Rugby World Cup in 2007. Let us not forget the Black Ferns, who had a great year and won their third successive Women’s Rugby World Cup; the stories of heroism, like that of Hayden Roulston, the cyclist who was diagnosed with a potentially life-threatening, career-ending condition but battled his way back; triumphs over adversity, like that of Jamie Philip and Robert Atua-Toki, who were on a benefit, decided that they did not want any more handouts from Labour, and set up a great business of mobile pizza-making; and everyday New Zealanders like Louis Salt, who has been driving so long for the Cancer Society of New Zealand. There are so many more I could name.

I end by saying that the National Party is in cracking shape. National members are ready, willing, and able to serve the country. We have no doubt that we have the team, we have the policies, and we have the commitment. If I do say so myself, it is all going so well that it is almost a shame to take a holiday. Merry Christmas.

Debate interrupted.

Tabling of Documents

Leaks of emails

GERRY BROWNLEE (National—Ilam): I seek leave to table a document that was the subject of some misinformation in the House last week, mainly by speakers on behalf of the Government. Their allegation was that Dr Brash had blamed National Party members for certain leaks of emails to Nicky Hager. I want to table a disclaimer to that claim, which was published by the Sunday News last week. For the sake of Hansard, it is only fair that it sits on the Table of the House.

Document, by leave, laid on the Table of the House.

Adjournment

Sittings of the House

Debate resumed.

PETER BROWN (Deputy Leader—NZ First): Well, the new leader of the National Party has just made the same mistake as his predecessor, Don Brash, and as Dr Cullen has just made. He forgot to acknowledge that National will need a centre party if it wants to move from that side of the Chamber to the Government side. I have to say that I was, frankly, disappointed that Dr Cullen did not recognise or offer some thanks to his confidence and supply partners. We were not even amongst the people given thanks. [Interruption] Oh, it is all right now; I am offended.

But we would like to thank the Labour Party. We needed it in order to get another 1,000 police officers in 2008. We needed it in order to get more support staff. We needed it in order to increase the superannuation return. We needed it in order to support us in the introduction of a golden age card. We needed it in order to achieve some significant increases in funding for ElderCare. We needed the Labour Party in order to get a review of immigration law in this country. We needed it to support us in order to get the minimum wage raised to $12 per hour, by the end of the term. We needed the Labour Party in order to implement some sound New Zealand First policies. We are grateful that it saw the light of day and supported us—even to the degree of getting a review of the Accident Compensation Corporation funding of physiotherapists.

We are going home—hopefully safely—for Christmas, as we do every year, and on behalf of New Zealand First, I would like to thank all the support people who assist us in Parliament. I thank you, Madam Speaker, your Deputy Speaker, and your two Assistant Speakers, basically for your fairness and your tolerance—and sometimes, I know, it must strain your tolerance keeping control of this place. We would like to thank the Parliamentary Service staff, the staff of the Clerk of the House, and all the Hansard people, who do such a great job. We also extend our thanks to the messengers, the security staff, and, indeed, Bellamy’s catering staff.

We also thank our support base, who from time to time are quite critical of New Zealand First.

Hon David Carter: How many?

PETER BROWN: There are so many, Mr Carter, that we would fill the largest stadium in this country if we got them all together at one go. We would particularly like to thank the people who have rung in and emailed us today for taking a positive stance on the Therapeutic Products and Medicines Bill. There are people who have changed their minds and said that it is right that it should go to select committee. [Interruption]

Madam SPEAKER: There are levels of intervention that are acceptable, and some that are not.

PETER BROWN: The National Party members are filled with Christmas cheer, so let them go a little bit. I say to those honourable members over there that they will get their opportunity to pull this bill apart—or put it together—at select committee. But there are members of the public who now recognise that the right thing to do is to send it to select committee so that they can have their say. They might disagree with it, but they will have their say. All day today we have been getting emails and telephone calls from people who share that view.

Hon Member: Yeah, right!

PETER BROWN: Yeah, right. I hope when we depart from this House we will have an enjoyable time. I know that I and my colleagues in New Zealand First intend to. From my point of view, I intend to become somewhat of a couch potato if my wife allows me. [Interruption] I will be playing my fair share of beach cricket and beach volleyball, do not worry about that. I will be back here slim and ready to go next year. But I hope I can sit down and watch some sport on television, particularly British soccer. I hope I can see a match as stimulating as when Arsenal thumped the hell out of Spurs the other night, three nil. I look forward intently to the matches over Christmas.

On a final, serious note, I think we should spare a thought for the fact that some people will get involved in unsafe action, particularly on our roads, at this time. Undoubtedly some young people, in particular, will do something rather foolish on our roads. I urge them, if anybody is listening and concerned, to take it easy. Christmas is a festive season, and life is much more important than driving some car in reckless fashion. I hope—[Interruption] The member over there might think it is quite a frivolous matter. I get quite saddened, as perhaps he can tell, when I think that somebody who is alive right now will be killed on the roads between now and New Year’s Eve, or maybe shortly afterwards.

It is a sad aspect of Christmas, and we have to spare a thought for those people and the families that are involved with them, and, equally so, for the emergency services—the police and fire brigade, in particular—who will go out while we are enjoying ourselves somewhere in this country and pick up off our roads the pieces and the mess of somebody who has been quite reckless. I ask Parliament to take note that that will unfortunately occur, and it is worth reminding people that there is a sad side to this season.

I hope we all have an enjoyable break, I hope we all come back refreshed, and I hope we all come back prepared to do our very best for this great little country and its people. Thank you, Madam Speaker.

JEANETTE FITZSIMONS (Co-Leader—Green): Is it not extraordinary what Christmas can achieve in the House? I have a serious proposal to make, and that is that next year we have Christmas every second week, which will mean that the House will accomplish in 2 days what would normally take 4 or 5! Then we can finish the business of the House in 3 months and all go home for the rest of the year. I have certainly never seen legislation move as fast as it has in the last 2 days. I do not know whether it is because of the media’s Christmas party tonight—I notice they are all off preparing for it—or the attraction of the beach, but it has certainly changed things.

The year 2006 was when the New Zealand public, and even, to a small extent, the New Zealand Parliament, caught up with the rest of the world in respect of climate change. It was the year in which the March conference at Victoria University changed hearts and minds. We had international scientists here speaking, we had Al Gore’s movie, and we had Al Gore visiting. All of a sudden the National Party decided that maybe climate change mattered after all and changed its position. I congratulate National on that. There is nothing wrong with changing one’s position and finding that something matters after all. What matters now is what the policy will be, and we will watch for that with great interest. It was also the year in which Labour, having cancelled all its climate change policy last December, started again to write a new one. We are still waiting to see what that will be, though a few inklings have come out in the last week. At the moment both major parties in the House are without a policy on climate change, but we hope that 2007 will take us a lot further in that regard.

The year 2006 was when the price of petrol rose to $1.78 a litre, then dropped to $1.40. This is temporary—it will go up again and be over $2 a litre. It was the year when New Zealanders in record numbers left their cars at home and caught public transport, to the point that public transport could not cope; when the trains and buses in Auckland and Wellington were full at rush hour; and when the Government put another $1.5 billion into roads, on top of the ever-increasing road budget that we have anyway. New Zealanders have voted with their bums. They want better public transport, and next year is the year to have it. This was also the year in which greenhouse gases continued to rise inexorably.

This was also the year in which the depths of undemocratic political influence were exposed, not by Nicky Hager but by the email words of Dr Brash and his advisers. The same emails exposed the huge sums from the parliamentary leaders’ budget that the National Party spent on its election campaign in ways that were not audited by the Auditor-General. In 2007 we will have to deal with the question of campaign finance reform and proper election funding if we are to restore a democratic process whereby elections cannot be bought by either side of the House.

The year 2006 was when the death of the Māori Queen united a nation of Māori and Pākehā in recognition of the dignity and aroha of Māoritanga that make us different from every other nation. I have to contrast the effect on the national psyche of the tangi of Dame Te Ata with the effect on the national psyche of the Ōrewa speech.

The year 2006 was when the Government moved to break up Telecom’s monopoly over broadband and local lines. The Greens really welcome the fact that that will free up the communication system, which can do a great deal to take us past the age of cheap oil. It was also the year when 10,000 albatrosses and petrels were killed in the New Zealand longline fishery, when 115 Hooker’s sea lions were killed in the fishery, and when bottom trawling continued unabated, with 90 percent of the fishing fleet that destroys thousand-year-old corals in the South Pacific oceans being licensed in New Zealand.

This was the year that our overseas development assistance rose almost insignificantly to 0.27 percent of gross national income—far short of the OECD average of 0.42 percent and even further away from the official UN target of 0.7 percent. No one line item in the Budget affects the livelihoods and well-being of so many people. The consequences of our lack of generosity are highlighted by the instability that is now being experienced in some parts of the Pacific.

It was also the year in which it was reported that the number of overweight people in the world has overtaken the number of malnourished, for the first time. A billion people are considered to be heavier than is healthy for them. While almost one in six of the estimated world population of 6½ billion is now overweight or obese, about 800 million people do not have enough to eat. That is a big challenge for 2007.

It was a good year for the Greens. We have been polling third all year, without exception. We are the only third party that has polled over 5 percent all year without exception, and on the rolling poll we have consistently been a couple of points above our election night numbers. It was the first year that the Greens had the opportunity to run Government programmes—programmes that deliver towards the issues of climate change and healthy homes, that support local manufacturing, and that reduce the balance of payments deficit. Sue Bradford stood up for principle and established clearly that Buy Kiwi Made means “Buy products made in New Zealand.”, and that principle has been established. The solar water heating programme was launched, and by February we will see more solar water heaters going on to Kiwis’ roofs and reductions in electricity use, greenhouse emissions, and the cost of hot water. Tomorrow we are launching the National Energy Efficiency and Conservation Strategy for discussion, which takes another step on issues of climate change and energy. Our budget bids were successful, with significant funding for environmental education in schools and for an organic advisory service.

The six of us have eight bills before Parliament at the moment—that is more than one each. Those bills hold out the promise for more flexible working hours to help families; for the protection of our kids from violence by taking away the defence in the Crimes Act for beating children; for a revolution in the way we think about waste; for people with certain medical conditions who cannot be helped by other pharmaceuticals to have the benefits of medicinal cannabis to help them; for mothers in prison to soon be given the chance to bond with their babies; and for young people in the workforce to soon be earning equal pay with adults for equal work. There are many challenges to meet next year.

I wish all members a very restful break and a happy Christmas. I hope they come back with renewed energy. I thank all the colleagues I have worked with—my Green colleagues and those in other parties. I thank all the parliamentary staff, the messengers, the security people, the library staff, the Bellamy’s staff, the select committee staff, the Clerk’s Office, and—as Michael Cullen said so aptly—all those I have forgotten. Happy Christmas.

Dr PITA SHARPLES (Co-Leader—Māori Party): As the newest cab on the rank, when members of the Māori Party looked on the Order Paper at this motion, we did wonder what we would talk about on the topic of the 2007 sitting programme. What fascinating account from our tribal histories could we share with the House? Was there an appropriate whakatauāki for today—what was the proverb for the occasion? Our ever helpful whip, Te Ururoa Flavell, came up with: “January, you start the year off fine. February …”—members can fill in the rest.

In all seriousness, it is my utmost privilege to speak today of the year that has been and the year that is to come. We have come to this forty-eighth Parliament to be the independent Māori voice in Parliament that our people were calling for. We believe we have done our best to maintain our traditions, to speak to the issues and policies—not the personalities—and to promote the message that every issue is a Māori issue. We have been pleased and proud to develop relationships with each and every political party in this Parliament. We have come to every bill charged with our hope to reinvigorate a sense of optimism for a better and more just future. We have raised issues that we know others would rather sweep under the mat. We have respected the advice of the United Nations special rapporteur and taken the time to ensure that this Parliament gives due consideration to the report that criticises the nature and extent of the way in which the Government has responded to indigenous human rights issues—a way that has greatly saddened us.

We have also sought to challenge the basis of some initiatives that were deemed untouchable, such as the vexed issues around Treaty settlements. We have taken out the microscope, looked for things Māori in the Budget, and found them missing. We have searched for the Treaty of Waitangi in the school curriculum—and searched in vain. We have risen in the House to pronounce our profound disappointment at legislation that has worked against the interests of Māori. But, against all odds, we could not, in our wildest dreams, have known that we would be celebrating 10 years of political leadership from Tariana Turia by the Foreshore and Seabed Act (Repeal) Bill being drawn from the ballot.

It has been a wonderful year. In every area we have asked how we can defend Māori rights and advance Māori interests for the benefit of the nation. Through it all we have been so very proud to recognise, by continually bringing them to the forefront, the unique contributions that Māori have made—and continue to make—to the nation. We have celebrated the entrepreneurship and the vision of tangata whenua. The regular visits we have made through our three nationwide tours this year and our ongoing constituency programme have sustained our momentum to ensure that people’s voices are heard.

Speaking of momentum, I turn to the greatest secret of Parliament: the vehicle for transformation that is represented in this very complex. I am talking about the incredible contribution made by members of staff right throughout Parliament. It is these staff who have helped us—the new cab—enormously and who have also taught us the rules. For example, there was the day when we overlooked the sacred timing—that half-hour period when questions are accepted. That was the day the House had 11 questions, for, grovel as we did, no leniency was allowed.

It seems there are some moments in the House when no mercy is shown. This extends to our wonderful press gallery. For example, when we, the Māori Party, had actively contributed to and voted right throughout the whole 12 hours and 49 minutes of the debate on the Appropriation (Parliamentary Expenditure Validation) Bill, all that was reported was the fact that at the final vote we were physically unable to be in the House. [Interruption] Who is that? I thought I heard a voice over there. Is that voice still in the House? Whom we have dinner with seems to have more fascination than our valiant efforts to pursue simultaneous translation or confront institutional racism.

When I was walking to our office this morning I was passed by Clarrie Goodhue and, not much later, Raymond Young as they sped along the corridors of power, humming in their work and always willing to help and support the parliamentarians in their role. Their constant enthusiasm, professional service, and unstinting work ethic are replicated so many times by so many levels of staff who come to work at the Beehive every day.

The Māori Party members thank, with all our hearts, the incredible efforts of our library staff, who have been so helpful in the face of numerous requests and absurd deadlines; the members’ service and human resources staff, who have kept us informed about what we can and cannot do; the Bills Office staff, who are always on hand to give out copies of all the bills and reports and keep us up with the play; the Table Office staff, who have been a godsend in helping us to have all the paperwork in order for tabling; the legal staff, who have guided us in the shaping of our members’ bills, our Supplementary Order Papers, and amendments; the messengers, who link us all to the outside world; the security staff, who walk our staff to their cars when they work late and open doors when we come running in at the crack of dawn; the telephonists; the travel office staff; the staff at Bellamy’s and Copperfields; the Hansard recorders; the interpreters; the building staff; the cleaners; and we are sure there are many more staff who keep the cogs of this democracy turning over—the silent worker bees in the hive. Each party, no matter how big or small, carries a similar parliamentary workload, placing considerable strains on the limited resources of the smaller parties. It is a workload that would be impossible to do if not for the staff of Parliament.

Finally, I come to the members of this Chamber. Madam Speaker, I thank you, the Deputy Speaker, and the Assistant Speakers, who have demonstrated enduring patience in helping us to learn the ropes so quickly. The Speakers have responded to the call of “please” from Mr Harawira, his hand raised as he attempts to eke out another minute from the clock to enable him to finish what he has so assiduously prepared. The Speaker smiled benevolently as Mr Flavell rose to his debate in full flight, delivering a well-crafted speech about a bill that was not on the Order Paper. He put his mistake down to the gift of matakite—a vision of knowing what was to come. What this House does not know is that the same member came into this House with two left shoes—not just once, but twice. Such is the over-brimming enthusiasm of our MPs to come down to Wellington that sometimes luggage is a mere triviality. The Speaker allowed me to slide into my seat, even if it was the wrong one, and still rise to speak, in full knowledge that the vote was just a breath away from being taken—for which I got fined.

We are also eternally appreciative of the masterly expertise of the Clerk and the Deputy Clerk of this House, who have been a vital resource in bringing us up to speed with the rigours of Parliament. To all the other members of this House—good people all—we thank them for the opportunity for our party, the mighty Māori Party, to share our ideas and aspirations for a vision of Aotearoa, a nation we are all here to serve. We have enjoyed the relationships that we continue to develop with individuals here—members and, in some cases, party leadership—so that we can work together in the best interests of this nation. We have thoroughly enjoyed our year, and with the benefit of, we hope, some rest over the summer, we know we will be back for more. We look forward to returning invigorated, energised, extremely well read, of course, in the Standing Orders, Hansard, and Speakers’ Rulings, and, as an added bonus, even more tanned, having spent our time with whānau on the foreshore and seabed. Kia ora tātou.

Waiata

JUDY TURNER (Deputy Leader—United Future): I rise on behalf of United Future for this adjournment debate, and reflect on what has been a most interesting year. At one very important level it has been a good year for United Future. It is great to be in a party that gets to contribute and to advance its policies, issue by issue. As we finish this year we can cite the fact that a number of key discussion papers have now been tabled. One discussion paper reflects the largest review of business tax that this country has known for 20 years. A paper is now being circulated that invites charities to look at a new tax rebate regime that has been developed for charities, and we are seeking their input on that. Even this week a discussion paper has been tabled that is reflective of our supply and confidence agreement with the Labour-led Government, and that introduces some thinking around the development of a national medicines strategy. We in United Future do not see ourselves as supporting a Labour-led Government; rather, we see Labour as supporting United Future policies into existence.

On another level, it has been a bad year, and I would like to encourage members of this House over the summer adjournment to reflect on the conduct of this House. I suggest that there have been times this year when we would have been well served by having an age restriction on entry to the public gallery. I admit now to being asked by a school principal whether it would be suitable to bring his class to watch question time. Because of the behaviour at the time I said “No”, and he chose not to bring his class. One good thing, though, that has come out of that experience is that dialogue between the minor parties has opened up in a new way, and I think there is more to be discovered about how we, together, can influence outcomes in this House. I look forward to ongoing discussions in that regard.

Like other parties, I would like to thank those who help this Parliament to tick over. I would like to start with our own staff, who are a remarkable group of researchers, executive secretaries, and advisers. I thank our board and our party volunteers. I also thank the Parliamentary Service for the many ways in which it supports our efforts, and, in particular, I thank the Speaker’s office. On behalf of the Hon Peter Dunne I thank his ministerial advisory staff from the Inland Revenue Department and the Ministry of Health, and, of course, I thank our electorate agents who work for us out in the regions.

As we part company for the year it is time to reflect on the fact that we look toward Christmas as a family-focused season. It occurred to me as we were gathering for this debate that even though it is the second Christmas since Rod Donald’s death, his family yet again bears his memory. We would like to pass on through the Green Party our ongoing memories of him, and say that we wish them well at this season, which will be tinged with sadness for them. We encourage everybody to have a restful and safe Christmas, and we look forward to the beginning of the new year.

RODNEY HIDE (Leader—ACT): May I, Madam Speaker, give my best wishes to you. I must admit that we got off to a rocky start, you and I, when you called the Serjeant-at-Arms to remove me. I understand that that had never been done in the history of the New Zealand Parliament; I am sure that I deserved it. I discovered later that if the Serjeant-at-Arms had touched me, I would have been out of Parliament until the next election. So it was a near-run thing. I should apologise to the Serjeant-at-Arms in the spirit of Christmas, because I actually turned to him and said: “Don’t touch me, or you will regret it.” I did not say that loudly enough for the Speaker to hear—thank goodness. But we did get off to a rocky start, Madam Speaker, and I hope that I have worked to repair that relationship with you.

In my time in Parliament I have never seen a Speaker more tested by the poor behaviour of the Labour and National Parties—[Interruption]—and you can see, Madam Speaker, what I mean. I make the point—and National and Labour MPs should reflect on it over the Christmas break—that this is a sacred place, that it is an important place for our democracy and for our country, and that it does deserve some respect. So, too, do those members who are on their feet; so, too, does the Speaker. There is a limit to how much a Speaker can require discipline of members and of political parties. If political parties are not prepared to show the discipline required to have a serious debate, then it is not possible for a Speaker to ensure that. So I hope that both the Labour and National Parties will go away and have a break, reflect on the year, and reflect on how they want to approach Parliament.

I thank the ACT caucus. We could not have had a more united and determined caucus if we had tried—100 percent supportive and hard-working, and nary a cross word or division in it. I also thank the ACT staff, who have helped us enormously, and in particular my secretary, Sandy Grove, who is a true trouper.

I thank the good people of Epsom. They put their faith and trust in me and tried something different. I have worked hard to be the best member of Parliament the people of Epsom have ever had. I believe that that is the case, and it is being recognised now in that electorate.

I thank all our supporters and members of the ACT party, who have stayed with us through what was a tough time. We now continue on our way, and to grow.

It has been a big year for the ACT party. We started off with just two MPs. I remember friendly colleagues of ours in the National Party saying that we were finished, because we would not be able to get anywhere with just two MPs. Well, Heather Roy and I have done our best to raise issues around New Zealand—not always through Parliament. I commend Heather, an MP and a mother of five, for taking up the challenge and joining our armed services, making a contribution to New Zealand’s defence, and understanding her portfolios from the sharp end—behind some very large guns.

It is also the case that the ACT party has brought some very serious bills to this House—the No. 1 bill being that to cap increases in local Government rates, and another bill still to be heard, to deal with the unnecessary red tape that confronts New Zealand and wastes our resources.

Heather Roy and I also travelled to Europe, and particularly to Dublin and Berlin, to see other proportional systems, and particularly MMP, in action, and to find out how smaller parties campaign and operate in Parliaments. It was of great benefit to us.

I should pay special thanks to Judith Collins—I am sorry; I know she is in Samoa this week—because I wandered into the House one question time and she came up to me and said: “Mr Hide, the purpose is to get on TV for sure, but to get on TV by what you are saying, not by what you are showing.” I looked a bit nonplussed, and she said: “Your fly is down.” I had walked into the House with my fly down, and had quickly to adjust it. The only question I had for Judith Collins was how come she was the only one who noticed. I have not got a satisfactory answer to that question.

After 10 years of MMP, I think that this year has been when it has started to work for us. First of all, we have worked with our colleagues in the Māori Party, with whom we agree on much and disagree on some. Our relationship, from which the ACT Party has learnt a great deal, has been fantastic, and I hope we have not been too much of a drag on the Māori Party. Also, I have enjoyed working with United Future and, indeed, with the New Zealand First MPs. The pleasure for me this year has been to work with Keith Locke and the Green Party on stopping what was going to be an absolute monstrosity on Auckland’s waterfront. I enjoyed that most of all this year, and I thank Keith for that.

It has been a year in which the Government, in its third term in office, has tried to come up with a big idea but has failed miserably. First, we had the stadium. That was going to be the big idea, and we saw what happened to that. Second, we have climate change and carbon neutrality, and we are seeing what is happening to that. So next year we will see a Government that is floundering around for a big idea.

We saw Helen Clark—for the first time, really—lose touch with New Zealanders when she said that the pledge card was an issue that did not extend past the beltway, when what we had was a political party upset and, according to the Auditor-General, the misspending of taxpayer funds. However, I do not believe that the National Party covered itself in glory on the pledge card issue by essentially accusing Labour and all other political parties of being corrupt. I believe that that was a very, very dark approach to politics here in New Zealand. We actually know what corruption is, and I can tell the House that we do not have it in New Zealand. I do not see how the National Party can have to pay back $10,000 and not be a little bit corrupt by its own statements. Indeed, my experience in Parliament is that when people get up on their high horse they quickly become undone, and we learnt from The Hollow Men that the National Party was indeed breaking the rules—

Hon Members: No!

RODNEY HIDE: —they say “No!”—and paying a parliamentary staff member who was actively engaged in fund-raising. That is dead against the rules, and I do not see how one can be on one’s high horse and actually have taxpayer-paid staff going around fund-raising for one’s election campaign. I suggest that we have an interest in us all—in all political parties—working together to sort out the rules of taxpayer funding, and not having one party try to make hay at the expense of all the rest by pretending that somehow it is whiter than white.

One fascinating thing that has happened in recent weeks is that Michael Cullen has got his mojo back. For 2 years Michael Cullen has just been going through the motions. He is a man who is an extraordinary parliamentarian but he was looking like he had lost interest in politics. I have to say that this last week he is back! I can see what has happened. First, Trevor Mallard has gone from the picture after the stadium issue, and, secondly, I know that Michael Cullen was very upset when the media reported that John Key had bested him over the Budget and in the election campaign, and that it was Labour Party strategy to target Don Brash and to leave John Key alone. One could see Michael Cullen coiled up like a spring, wanting to unleash the whole time. He is so pleased, I can tell, that he now has Mr Key there, and I think that next year will be fascinating as we have this contest between them.

The ACT party will have a big year next year with our bill. I should say this: I have had a meeting with John Key, and I believe that John Key is a modern politician in New Zealand who actually understands—[Interruption] Well, we have Phil Heatley, who never ever gets to speak on anything decent in the House, and, like a lot of people in the National Party, would prefer not to even sit in his seat but instead yell right across the House, in the adjournment debate, when someone is actually trying to say some nice things about his leader—and that is precisely the trouble that we have in this Parliament.

Hon PAUL SWAIN (Labour—Rimutaka): This has been a great year for the Government—a great year for the Government! Strong leadership, strong team, strong policies—

Hon Tau Henare: I seek the leave of the House to table a document entitled: Members Asked to Withdraw from the Chamber, which states that Rodney has been asked to withdraw from the Chamber four times—the second-highest number of times in Parliament this year.

Madam SPEAKER: I just remind the member that normally the seeking of leave to table documents is taken at the end of speeches so as not to interrupt members. Leave is sought to table that document. Is there any objection? Yes, there is objection. Would the member please start his speech again.

Hon PAUL SWAIN: This has been a great year for the Labour-led Government with its strong leadership, strong team, and strong policies. We talk about policies. That is the difference between us and that lot over there. They never talk about policy. We talk about policies. Here are just a few: interest-free student loans, public health organisation roll-out, KiwiSaver, expanded paid parental leave, and rates rebates. Just recently we have seen the draft Energy Strategy and the cheaper, faster broadband policy. This is the Labour-led Government and its policies.

As opposed to that, the National Opposition has had a shocking and terrible year. The recent book described National members as “hollow men”. I thought that description was flattering; it should have been “invisible men” as far as this year is concerned. The year started out with Don Brash and ended with John Key. We ended up with the back end of the donkey at the end of 2006.

Dear old Don Brash, he stuttered and stammered his way through the year. Do members remember that he could not quite work out how GST worked? Funny that, because he was one of the architects! Well, here is a handy little hint: exclusive GST means GST not included. A little memory hint is exclusive GST, Exclusive Brethren. It is very, very simple when one actually thinks about it and gets the hang of it. So finally Don Brash called it a day and we got John Key as National’s leader.

One can always recognise John Key around town now. He has the L-plate on the LTD. He is the learner leader who uses trainer wheels as he goes out for a bike ride. The fact is he will have an L-plate on the LTD for quite a while, judging by the last few weeks. I have just one thing to say to Mr Key: imitation is the greatest form of flattery. What has he announced in the last 3 weeks or so? He has announced and talked about such things as the inclusive society. Well, I wonder who started that little policy. Oh, of course, it was Labour. Then we had the sudden change in heart on climate change. He said that he has always believed in it. That is not what he said a year or so ago. He now says he will not change the Employment Relations Act. He now does not think that America should have gone into Iraq. He does not believe in the previous National Government’s nuclear policy. He supports civil unions and now thinks that tax should be introduced gradually. I say to the National Party that it should stop pinching Labour’s policies. It is just not right. Why would people have “Labour-lite” when they can have the real thing? That will be the point we make.

It is a funny thing also that John Key sounds like David Cameron from the British Conservative Party. Funny that! Why does he sound like David Cameron? Because it is David Cameron speaking! John Key is using the same lines as those used by David Cameron. Next year he will stand by his laptop waiting for emails from David Cameron to get him through the next week. He should think of some lines himself and stick to those. It works a lot better.

And what about the team lined up behind him? Bill English is doing the old “I am supporting the leader to the hilt.” line—yes, absolutely! An old law in politics is to never have a deputy leader who wants to be the leader. Bill English, of course, has not shown loyalty before—not to Jenny Shipley—and he will not show it again. What about Gerry Brownlee? He has slipped from No. 2 to No. 3, which is the political equivalent of being kicked down the stairs, actually. He can see himself being kicked all the way down and finally out into the lobby. What about Simon Power—power of the nuclear kind? He was Uncle Sam’s friend. Suddenly the leader says: “No, we do not believe in that any more.” So where is he going to end up? Tony Ryall, of course, is right behind the leader. He is always right behind the leader. He has been bitter since 1999 when the public kicked him out, and he is still not over it.

What about Nick Smith? How long was he deputy leader? I cannot remember. Was it 2 or 3 days?

Darren Hughes: 3 days.

Hon PAUL SWAIN: So he was deputy leader of the National Party for 3 days. Maurice Williamson—do members remember him? Do they remember that he was going to flog off the roads, sell them to the highest bidder? That was a very, very popular policy! We are looking forward to seeing that policy resurrected as we go into the next election.

Then, of course, there is Judith Collins. What did Bill English say about Judith Collins? In a nutshell he thinks she is hopeless. Well, Bill English has got that right. She is hopeless. What did he say about Katherine Rich? He said she has been promoted too fast. He thought John Carter—and I felt he was a bit unfair about my old friend—had been promoted beyond his competence. Bill English said that people in the caucus would never work with Murray McCully in Cabinet. That is absolutely true, because we know about old Muzza. The last word of all should go to Jonathan Coleman. Just when one thought it was safe to smoke cigars again, this happens! What they did to Bill Clinton’s career they will also do to Jonathan Coleman’s—concussion and a bloody nose, all for the sake of a bit of cigar smoke.

The Labour-led Government is going into the break feeling very, very good and very positive. We have done some policies. We have got New Zealand moving. We are doing the things that New Zealanders want the Government to do: showing leadership, showing strength of policy, and moving forward.

National members will go into Christmas hoping that Santa will bring them a principle, or a philosophy, or even a little policy. But we know they will not get one from Santa, because they have been bad, bad boys. They have been hollow boys. They have been hollow, bad boys. They are not going to get one single thing from Santa, and all we say is that after Christmas we will not mind sharing our policies, just as long as they ask nicely first. That is all we want.

To all the people who work in the parliamentary precinct, to everybody here, merry Christmas.

Hon BILL ENGLISH (National—Clutha-Southland): Paul Swain is becoming the Larry Sutherland of the Labour Party.

Hon Members: Ha, ha!

Hon BILL ENGLISH: Let me be more precise—Larry without the charisma. That is not a surprise, given that Rodney Hide sounds more and more like Peter Dunne every time he gets up to speak. I might say to the leader of the ACT party: “Throw away the self-improvement books, put the dancing shoes back in the cupboard, and return ACT to what this country needs it to be—a firebrand liberal party that keeps us honest, tells us where we should be going, and keeps getting 2 percent in the polls.”

If anything sums up the Labour Party in its current state it is the way it has handled the Liam Ashley affair. This House will remember a New Zealander called Kit Richards, a civil servant who wrote an email the Prime Minister did not like. And he lost his job. He lost his career and was unable ever again to get a job in the civil service. A couple of months ago Liam Ashley was strangled in the back of a prison van that was under the supervision of the police and the Department of Corrections. I might say that if Liam Ashley had been a 35-year-old middle-class mother of three, Damien O’Connor would be a former Minister. The Labour Party has cynically decided that no heads will roll and no responsibility will be taken by any individual person, but a young teenager lies buried 6 feet deep in a cemetery, when his parents and every New Zealander would have assumed he was in safe hands. That is the deep cynicism of the Labour Party. Someone who says something the Prime Minister does not like can never get a job again in the pay of the State; someone who allowed a young teenager in the care of the State to be strangled does not have to be accountable, does not have to be responsible, does not have to tell the public why it happened or how; and gets to keep his job, when Liam Ashley lost his life.

Damien O’Connor, a man of whom this Parliament thought better, has decided to do what Heather Simpson has told him to do—that is, to hold the line because Labour cannot afford to go into Christmas losing a scalp. What a disgrace! The public would have stood and respected that Government if it had shown that it still had the capacity to understand that when someone dies brutally while he is in the care of the State, the State takes responsibility. What if that were my teenage boy getting a sharp lesson with a night in the cell, which is what Liam Ashley’s parents thought was happening?

Jill Pettis: Would you send him to prison for the lesson?

Hon BILL ENGLISH: Sorry, would you say that again?

Jill Pettis: Would you send him to prison for the lesson?

Hon BILL ENGLISH: Oh, so it is his fault? Now it is his fault. I thought that is what she said. Let that be in the newspaper tomorrow—that Liam Ashley died because of his parents, because they made the ridiculous mistake of assuming that if he was in prison, someone would care for his life. How ridiculous!

Hon Tony Ryall: She blames the family.

Hon BILL ENGLISH: Labour blames the family!

I thought the pledge card was a deeply cynical exercise. I thought Labour’s breach of the electoral spending cap by half a million dollars was a deeply cynical exercise. I thought that Helen Clark’s willingness to say to her caucus: “Do what you like but don’t get arrested and you can stay on the parliamentary payroll.”, was a cynical exercise. I thought Damien O’Connor’s refusal to accept responsibility, or make sure that someone did, was a cynical exercise. But even I never thought that Labour would believe that it is Liam Ashley’s fault that he is dead. What a disgrace! Nothing better symbolises the end of this dreadful year for that party.

Our leader said it was a Walkman Government in an iPod world. Well, it is not. It is a hand-cranked phonograph in an iPod world. You see, this is a Government that has done what it came to do. The job is done. All the signs of decline are there.

John Carter: Decay, actually.

Hon BILL ENGLISH: Decay! Government members bullied the media. They told APN it would lose its tax arrangements if it kept writing the wrong stories. The Government now believes that process matters more than results.

We saw that with Labour’s response to climate change—the issue of our time. Labour now thinks that compiling a list of things to do is doing them. It is done. Labour has done energy. I know what Labour members did. They rang up Government departments and asked for a list of all the things that departments were doing. They put them in a strategy and launched it, and now it is done.

Hon Member: We know that’s the case.

Hon BILL ENGLISH: We know that is the case; we know that is how they do it. But they need to know this: all those sector groups that have been bullied, manipulated, and bribed are now knocking on the Opposition’s door. Our diaries are filling up with meetings with people, some of whom did not even know where the Opposition offices were but who have now worked out they had better find out. And they all tell the same story: “We are sick of it.”—even the civil service. The civil service wants the opportunity to serve the public, not the Labour Party. We will give them that opportunity.

The other sign of a Government nearing the end of its life is that the consequences of its choices are coming home to roost. No one is more affected by that than the cornered dog of Dr Cullen. Dr Cullen is now in the position where Peter Dunne and Helen Clark are saying to him: “You must cut personal taxes.”, and Dr Bollard is saying to him: “You must not.” The reason is that Dr Bollard now has an inflation problem. One of the main drivers of that inflation problem is his runaway spending under Dr Cullen.

I want to thank some people. I want to thank Don Brash for his long, admirable, and irreplaceable record of public life, and I want to thank him for turning this party into a Government. I want to thank John Key. Political leadership is a big ask for anyone, and I am so pleased that a man so capable has stepped up to become the leader of the National Party, and the next Prime Minister. I want to tell Paul Swain that if this is John Key with his L-plates on, wait till he gets his full licence. I tell members that he is driving the National Party and we are all on the bus, and it will roll right over this bunch who are lying in the middle of the road doing their best already to play dead.

I want to thank the National Party caucus. I have been brought up on the National Party, on the great figures of the past, because my parents knew them all and talked about them. This will be the best National Cabinet in 50 years. I have absolutely no doubt about it. We have the talent, we have the commitment, and we passed the test a couple of weeks ago by showing that our desire to change this country overrode all those other forces that are so difficult to manage in an Opposition. So we are ready with a leader who is ready—and a Government that is dead.

Hon TONY RYALL (National—Bay of Plenty): It is an indication of the state of this ageing and dying Labour Government that it can put up only two speakers today. One is the cornered dog, Dr Michael Cullen, a man who has missed many opportunities in his life and has failed in his ultimate goal to lead the Labour Party. Then we heard from Mr Paul Swain, who is leaving this Parliament in fewer than 2 years. They are the only Labour members we have heard from. I say this to Dr Cullen: if the Labour Party had obeyed the law of this country, he would be the Deputy Prime Minister in this adjournment debate today. If the police had enforced the law, those people would not be sitting there today. If this Labour Party had taken the warnings of the Chief Electoral Officer and obeyed the law, it would not be the Government of New Zealand today, and New Zealand would have a much better Government that provides the leadership that the country needs.

This has been an awful year for the Labour Party in office. Let us remember the pledge card scandal. Do members recall how it started?

Chris Auchinvole: No.

Hon TONY RYALL: The Prime Minister said the pledge card was not an issue, and that because Labour had been issuing it for two elections previously, it was not a problem. Then the argument was that everybody else was doing things like that, and then that Labour had not known it was an election expense. The fact of the matter is that David Henry deserves to be one of the New Zealanders of the year, because the Chief Electoral Officer wrote to that dishonest Labour Party, saying that its pledge card was election spending and had to be declared. What did the Labour Party do? It wrote back to him and said yes, it would be declared. That is what the Government said before the election.

Within days of the election—a knife-edge election—the Labour Party then wrote to David Henry and said it had changed its mind, and the spending on the pledge card was not going to be declared at all. That is dishonest, and as has been said by others, it is darn right corrupt. It is darn right corrupt to say one thing to the Chief Electoral Officer before the election and another thing afterwards. Because it was a knife-edge election, every dollar, every doorknock, every pamphlet, and every phone call mattered. Labour stole the election with half a million dollars of taxpayers’ money, and the Labour members have no legitimacy whatsoever to lecture anybody in this House. If they had obeyed the law, they would not be in Government today, and that silly little boy with the red hair would be delivering newspapers in Levin yet again, which is where he should be today.

Hon Bill English: He would get a milk run.

Hon TONY RYALL: Oh, he would get a milk run.

I think the real measure of Helen Clark is how she has dealt with Taito Phillip Field. I will recite what Lockwood Smith has shown so effectively in this Parliament this year. Taito Phillip Field is a man who sold immigration permits to people for money and work. There is no doubt that Taito Phillip Field said to Sunan Siriwan that if he went and did the tiling, he would get Siriwan into New Zealand. That is what happened. Here is the other rub: who else knew? Phil Goff was at the house where Sunan Siriwan was doing the work! The Minister of Foreign Affairs was at the house where he was doing the work. Has Phil Goff ever said, while sitting in his caravan in Mt Roskill waiting, waiting, waiting, what he said to Sunan Siriwan? No! Who else was there? The retiring Paul Swain was there. He was the Minister of Immigration. He was the guy in whose authority those decisions were being made. He was there at the house in Samoa with Sunan Siriwan. He spoke to him. What did he say? He has never said. Has he ever volunteered to go to the police to say what he said? No.

Hon Bill English: He wants the grouting done.

Hon TONY RYALL: My colleague on this side of the House say he wants the grouting to be done.

But I think Helen Clark stands indicted for her appalling lack of standards on the performance of Taito Phillip Field. Let us remember what happened to Dover Samuels. Even a mere allegation meant that he was chopped off at the knees within 24 hours by Helen Clark. He was found to be completely beyond reproach, yet he was frozen out of the Government.

But I think one of the most noticeable and real achievements of this year is that Labour has lost the faith of the public when it comes to managing the health portfolio. New Zealanders now know that Labour cannot be trusted to give them value for money for what they are putting into the health service. We have seen the screaming skull in this House, in question time after question time, completely losing it because he cannot justify the performance of himself or his predecessor, Annette King. So at every question time out comes the screaming skull, trying to deflect attention from the appalling performance of Labour, and denying the fact that 25,000 New Zealanders who needed an operation were culled off hospital waiting lists for no other reason than that they had been waiting for more than 6 months. There was not a thought from Labour for those people. Those 25,000 New Zealanders whom doctors said needed operations were culled from hospital waiting lists for no other reason than that they had been waiting more than 6 months. Those people have been sent back to their doctors, and they have to start life again.

The real privilege of being the health spokesperson is that I have met and talked to a lot of the people at the cold edge of Labour’s health policy. I have been talking to people with skin cancer whose specialists have told them that the cancer has to eat more of their faces before they will get an operation, I say to Jill Pettis. I ask that member what she would say to those people. If she blames Liam Ashley’s mother for his death, would she blame a mother for her daughter’s cancer? I have been talking to people whose kids are in desperate need of neurosurgery. I have been talking to a mother whose kid could die at any moment if he cannot get desperately needed neurosurgery. She has been mucked around by the Auckland District Health Board. And what does the Minister of Health do in Parliament? He blames the mother, again. Is that not appalling? I have been talking to the old people who have been suffering because they are in desperate need of a hip replacement, yet Pete Hodgson says that does not matter and they can go off the waiting list because they have been waiting more than 6 months. They are culled from the hospital waiting lists.

And what about the biggest lie of all? The biggest lie of all is that we are doing more surgery in New Zealand than we were 6 years ago. That is the test of this Government. An extra $4 billion has been put into elective surgery, and fewer people are receiving elective surgery than previously. Even fewer people will get elective surgery this year. We have seen an unprecedented level of industrial action in our country’s hospitals. Today I can tell the House that there are people in the MidCentral District Health Board’s area who have been told that they will wait 19 weeks in order to get radiotherapy to deal with their cancer. Let us imagine someone being told today that he or she will not start his or her treatment to cure cancer until the end of April. Someone has cancer, but that person will not be treated until the end of April. A member’s constituent could be told today that he or she will not get cancer treatment until this time in April. That is appalling. That is what this Government—[Interruption]

I will give members the best policy for fixing the health system in this country, and it is a change of Government. National will give New Zealand the leadership that will assure people they will get value for every dollar. We will not waste all the money on endless bureaucracy. Members should mark this down: since the Labour Party came to office in the year 2000 there are now over 2,000 more managers and administrators in the health system. For every two nurses who have been employed in the health system, Labour has employed a new hospital manager. Our entire health system is being bogged down in bureaucracy and decline. We even revealed in Parliament in the last week that the Minister of Health knows that his role is being wasted.

Madam SPEAKER: Members of Parliament, as the 2006 parliamentary year comes to a close I wish to pay tribute to all the people who contribute to the efficient functioning of the House. First, I must acknowledge the support of my colleague and Deputy Speaker, Clem Simich, and Assistant Speakers Ann Hartley and Ross Robertson, who have been great to work with this year and have never failed to perform when asked.

I extend my thanks to the Clerk of the House, David McGee. In my time as Speaker, I have come to value his sound advice and support, as well as his role in the efficient conduct of the House. As most members are aware, David has been overseas on a well-earned sabbatical for the last few months. It is with great admiration that I pay tribute to the Deputy Clerk of the House, Mary Harris. It is never easy stepping into the position of someone with David’s reputation, but Mary has embraced the role of Acting Clerk with confidence, professionalism, and a quiet determination. I have been exceedingly grateful for her wise counsel and sound advice over recent months.

I would also like to thank the staff of the Clerk’s Office for their professional and administrative skills in servicing the Table of the House, compiling Hansard records, processing legislation, questions, petitions, and serving select committees.

Thanks also must go to George Tanner, Chief Parliamentary Counsel, and his staff; the general manager of the Parliamentary Service, Joel George, and his senior managers; members’ support staff, including executive assistants; support staff of the various parliamentary parties; the staff of the Parliamentary Library; research units; the Chamber and gallery officers; security staff; building services staff; the telephonists; travel office staff; and reception and visitor services staff—my special thanks.

My thanks also goes to the Serjeant-at-Arms, Brent Smith, and to all those who work with him to uphold the traditions and propriety of the Chamber and to welcome visitors to the parliamentary galleries. They are an essential part of the running of the Parliament and of events such as the highly successful open day at Parliament in October. Others who work hard to ensure that guests and visitors to the parliamentary complex have an enjoyable experience include Beverley Cathcart and Michelle Janse.

Thank you to all those who have worked to support the committees that I chair: the Business Committee, the Parliamentary Service Commission, the Standing Orders Committee, and the Officers of Parliament Committee. I would also like to thank the Chief Ombudsman, John Belgrave, and his fellow ombudsmen, Beverley Wakem and Mel Smith, and their staff; the Controller and Auditor-General, Kevin Brady, and his staff; the Parliamentary Commissioner for the Environment, Dr Morgan Williams, who, after 10 years’ service, leaves his post early next year. Welcome to Dr Jan Wright, who takes over in March.

Thanks also to the Leader of the House, the Hon Dr Michael Cullen, whose knowledge of the Standing Orders, impressive debating skills, and sense of humour have saved the House from sinking below the radar on several occasions—so to you, I thank you, Michael. The leaders of all the parties in this House, their deputies, and the party whips and their deputies all deserve a special commendation. Only those intimately involved appreciate the degree of skill, charm, and authority necessary to ensure the smooth running of this House. We are all well served by those who hold these often thankless offices.

I would like to acknowledge and thank the members of the press gallery and those journalists who take the time to learn about Parliament and its procedures, and are therefore better qualified to report and comment on what happens here than some of their other colleagues are. I acknowledge too the efforts of all members of Parliament who, despite enormous workloads, continued to serve their electorates and make important contributions to the wide range of select committees that met throughout this year.

I extend a personal thanks to my own staff, Pam Reader, Roland Todd, and of course the two Roses, with whom you are all familiar. In addition, of course, thanks to our Kaumātua and his wife Rose—who is the No. 3 Rose—and also to our interpreters, who give sterling service to this House.

I thank all members again for their support and work throughout the year, and for the contribution they make, not just to this House but also to New Zealand and its people. I know that from time to time people may wonder what members actually do in here, so I have been provided with a few statistics that may be of assistance to them during their holiday breaks over their barbecues. We have had 85 sitting days, 87 calendar days—members may wish to explain that to their constituents. We have had sitting hours that total 477 hours and 22 minutes. We have passed 97 bills, and they include four members’ bills. Members have contributed 20,185 written questions and have asked 988 oral questions. There have been 296 select committee meetings, and those select committees have produced 293 reports. I think that is an example of an extraordinarily good workload, for which all members should be congratulated.

As I draw this session of Parliament to a close, and as members go to join their families and friends for the coming break, I wish them all well until we meet again in February 2007.

Motion agreed to.

Madam SPEAKER: The House stands adjourned until 2 p.m. on Tuesday, 13 February 2007.

The House adjourned at 6.20 p.m. (Wednesday)