Subordinate Legislation (Confirmationand Validation) Bill (No 3)

I move, That the Subordinate Legislation (Confirmation and Validation) Bill (No 3) be now read a first time. This is routinely an annual bill to confirm and validate a range of regulations introduced in spring and passed by December. This year the bill provides for Parliament to confirm and validate 14 Orders in Council made under some nine Acts. It is customary that such bills are referred to the Regulations Review Committee, and I shall again propose this course at the conclusion of the first reading.

Before the introduction of the bill, Dr Cullen wrote to all parties in the House seeking their support and cooperation in moving the bill through its various stages. The responses were largely positive, although one party did express misgivings relating to one of the 14 orders, and I will return to that briefly, following the description of the other 13. Four of the 14 orders deal with commodity levies, which are voted upon themselves by growers of tamarillos, meat, wool, and wine grapes. The levies serve to finance industry-good activities and are payable to industry organisations. Four of the orders apply movements in consumer price indices to the rates of social security pensions and war pensions, and to the excise and duties on alcohol and tobacco products. Three of the orders apply biosecurity levies, which contribute to the costs of dealing with American foul brood disease and bovine tuberculosis. One order recovers costs of product verification through animal product levies, and another imposes levies relating to problem gambling.

Finally, one order extended by 1 year, to 31 December 2004, the legal status of four codes of animal welfare. The codes cover circus animals, pigs, exhibit animals, and layer hens. It is that order that is the subject of some misgivings on the part of the Green Party. The order will expire on 31 December this year, whether confirmed through this bill or not. Although the confirmation of the order is not strictly necessary, it was thought to be a matter of good faith to the House to propose that it be confirmed in the bill. This course acknowledges that the House earlier in this Parliament, in passing amendments to the Animal Welfare Act in 2002, provided for the codes to be extended by Order in Council for a maximum period of 2 years, subject to a confirming mechanism.

So I wish Richard Worth and members of the Regulations Review Committee well in their consideration of the bill. The committee is asked to consider a further item of subordinate legislation made since the bill was finalised for introduction. That item is the Deer Industry New Zealand Regulations 2004. Those regulations were made on 20 September under the Primary Products Marketing Act. They lapse, unless confirmed, by the end of this Parliament. I trust that the committee will agree to adopt an amendment serving to confirm the regulations.

National will support the Subordinate Legislation (Confirmation and Validation) Bill (No 3) going through to the select committee. This is an annual bill to confirm and validate a range of regulations. It may not be the most sought after or enthralling legislation, but having sat on the Regulations Review Committee and having analysed what it all means, I know that it is a very important piece of legislation and will need very close scrutiny. I was unaware of the late addition of the order relating to the deer industry that the Acting Leader of the House mentioned. One of the concerns we have found with legislation, such as the Statutes Amendment Bill that goes to the Government Administration Committee, is that there are always late entries. Departments think that they had better do something about an issue, and bring forward legislation at the last minute. When we come to debate the Statutes Amendment Bill (No 4), I will make that point very strongly. It is unsatisfactory. If there is to be cooperation from all parties in passing legislation, then it is incumbent on the Minister and on those departments to have that legislation before the House and the select committee in time for close scrutiny. In this case, where regulations concerning the deer industry are due to expire and need to be renewed, the same applies. Although I know that Richard Worth, as chairman of the Regulations Review Committee, will take that on board, I think the message needs to go out that it is not our role to make sure departments get their legislation in on time.

I move to what this bill is about. It has two parts. Part 1, “General and technical provisions”, is a very small part. Part 2, “Confirmations and validations”, comprises clauses 6 to 13. One area, in particular, that I have concern about is clause 11, “Gambling Act 2003”, which refers to the Gambling (Problem Gambling Levy) Regulations 2004. I have asked parliamentary questions of the Minister about the process that is gone through. I asked specifically, through an Official Information Act request, for the commission’s report on the proposed problem gambling levy rates, as provided for in section 318(5) of the Gambling Act and I have a copy of that here. It was not released at the time; I had to go to the Ombudsman to get that document.

I found that satisfactory answers have not been given to my questions as to why there is a huge increase in the problem gambling levy. That huge increase has not been justified by any substantive research. There is a huge, $55 million problem gambling levy to be spread over 3 years, with no research from the Ministry of Health, which will now be administering that legislation, and no basis over the whole industry to justify and substantiate how that Ministry of Health levy has been arrived at.

I will be sitting on the Regulations Review Committee, which will be looking closely at this bill, and I will be asking some questions there that I have not had satisfactorily answered by the Minister through my parliamentary questions. That is something I will be looking at very, very closely. I know that under the chairmanship of my colleague Richard Worth this legislation will get close scrutiny and that the committee will perform its duties in a diligent way while considering this legislation.

The Subordinate Legislation (Confirmation and Validation) Bill (No 3) validates a number of pieces of subordinate legislation that are either falling short in their time or need clarification. But one issue that I would like to take up is the late inclusion of another item that is going to expire by the end of this Parliament, unless members validate it. I find that action is typical of this Government. At the last minute, it suddenly throws in an item that it has suddenly remembered is falling out of date, and that happens with a lot of legislation. Members see Supplementary Order Papers coming in on last-minute issues, and they find that disturbing in a very big way, because they do not have time to consider those items carefully when the Government does that. Therefore, we ask this Government to stop adding additional items that members have not been able to go through. New Zealand First is prepared to support this bill going to a select committee, but when the Government starts throwing in items that members have not had time to consider, then we will really reconsider that support in the future.

It really concerns us that we are unable to consider items in caucus and go through our process when items are just thrown in at the last minute. So I ask the Minister whether in future he would not mind just taking a little bit more time to advise members in advance, so that they can look at items a little more closely. I see the Minister acknowledging that, and I appreciate it.

New Zealand First will support this bill going to a select committee, and we look forward to participating in the extended select committee process to further examine its parts. But as far as adding bits to it goes, I ask the Government to please make sure that it advises members in advance.

In the second reading debate on the Subordinate Legislation (Confirmation and Validation) Bill (No 2) last year, Mr Worth postulated that maybe members should not be wasting parliamentary time on this sort of bill, because it is bland, technical, and a thing of low measure. I do not want to put too much emphasis on that or to criticise Mr Worth for that, because on the face of it the bill does appear to be pretty bland and technical, and people may well wonder why members spend time just looking at something that seems relatively straightforward, and that seems to go through with a minimum amount of debate and certainly with the agreement, in most cases, of all parties.

The effect of moving this bill through the first reading will be that it will go to the Regulations Review Committee, which will then typically get a report from the relevant ministry on the particular provisions or regulations that are in it, and then the committee reports back to the House, usually on the basis that it accepts that the regulations are appropriate, and therefore they are confirmed.

That would seem to be pretty straightforward, but I think that the important part of this bill is the way in which the legislature keeps the executive, and particularly its ministries, honest. It is a way for a ministry to know that if it is to put up, and if the executive is to approve, regulations that are out of step with what is reasonable, it will be questioned about it. It will be taken to task by the legislature. Therefore, perhaps the fact that these bills go through in a pretty straightforward manner almost every time is partly because of the awareness that there is that policing function. It is a valuable policing function that this House has, to ensure that the executive does not overextend itself.

The Regulations Review Committee provides an independent review that is cross-party and provides that watch, and that can therefore look at it from all aspects of the public interest, from the various interests that the parties represent. It comes to a conclusion in terms of whether the particular regulations are wise and within a reasonable bound. So I think that that is important.

I note that one regulation United Future is particularly interested in is the Gambling (Problem Gambling Levy) Regulations 2004, which has come out of the Gambling Act. The whole area of the problem gambling levy is fraught with a lot of loaded issues. In particular, United Future puts importance on seeing gambling reduced, and, obviously, imposing a levy is one disincentive for gambling operators. It is a way of tightening up on the gambling industry, and we have been pleased with the way the Government has been moving towards a tightening up in the industry. But also, on the other hand, it causes problems because of the inconsistency between gambling income being one of the few sources of community grants that the Government now provides, and that money that is generated from the things that actually cause problems in society being used to try to solve problems in society.

Nevertheless, that is an area that the committee will examine. The purpose of the first reading is simply to get the bill through the first stage so that it can go to the Regulations Review Committee and be looked at in that measure of detail, and issues in terms of reasonableness and the way that the Government is operating in those areas can be addressed. United Future is therefore quite pleased to support the first reading. It welcomes the bill coming through for scrutiny, and it looks forward to the report that will come from the Regulations Review Committee.

We are debating the Subordinate Legislation (Confirmation and Validation) Bill (No 3), which contains 14 different measures that are being validated. There are within it some measures that everyone would agree with. For example, I take it that the superannuation and social security validations are what enable us to increase pensions, benefits, and war pensions in line with the consumer price index. Those are all meritorious matters. Having said that, I am not in favour of the validation of all the regulations set out in the bill, and for that reason the ACT party will not vote for this bill.

Let me direct attention to the particular measures that I object to most strongly, and which the Minister of Finance did not explain to the House. This is taxation legislation. This Government, with a surplus of over $7 billion, has collected $7 billion more than even it is able to spend, and here we are being asked to validate the collection of even more tax. Let me give the House the figures that the Minister failed to give. The Excise and Excise-Equivalent Duties (Tobacco Products Indexation) Amendment Order came into force on 1 December 2003, and adjusted the excise and excise-equivalent duties on tobacco products so as to reflect the movement in the consumer price index, excluding credit services, for the 12 months to 30 September 2003. Consumer price inflation in that period was 1.5 percent. By using Treasury’s ready reckoner, which it supplies to enable us to do that, one can work out that that is a tax increase of $12.175 million. We then go to alcohol, on which the duty is also adjusted according to the consumer price index. In the same period, the increase in the consumer price index was still 1.5 percent, of course, and by using the Treasury’s ready reckoner we can work out the change in the rate per litre of alcohol. Unfortunately, it is not easy to work out the taxation changes on alcohol since Mr Anderton decided to tax old ladies who drink sherry, so I have had to do a bit of an estimate—I am obliged to the library for assisting me with it. We came to a figure of $7,120,000.

We have had the McLeod Tax Review. The Government paid $2 million to have an independent review of taxation, and I do not think it has taken note of any of the recommendations. One of the things Mr McLeod stated was that there were no intellectual or rigorous reasons for the “sin” taxes. We in this House say that smoking tobacco is bad for people—and it is—and that we should whack it with tax. The Minister says the Government will use that money to help the poor people who smoke. We, of course, know that that is not what actually happens with the money. The money is used by the Government to pay for its treaty settlement processes and for all the other various things that this Government does, and very little of it goes to smokers.

Then we have the drinkers. People say drinking is bad for us. Actually it is not—a glass of red wine per day does not do us any harm, nor does a glass of beer. It is only if one drinks to excess that alcohol—

💬 Brian Connell: Ten must be pretty good for you.

No, the statistics are there for us to look at. The French, who drink red wine, have a lower rate of heart attacks than we do.

💬 Brian Connell: It reduces your cholesterol.

I thank the member; I am obliged to him. I am told that drinking red wine reduces one’s cholesterol. The point is that in itself—unlike tobacco, where I think any amount of smoking is bad for people—alcohol is not bad for us. So where is the justification for increasing the tax on alcohol? The Minister did not give us any. I know where the justification comes from. It was an idea of David Caygill’s. He was the person who told Cabinet in 1990 that we would have a surplus, and then we found out about the BNZ sometime after the election, along with the incoming Government. No one in Cabinet knew about the fact that there was a huge hole. He said we should provide for an adjustment to the taxes on alcohol and tobacco by the consumer price index, so we would not have to have a debate in Parliament to justify increasing those taxes.

I think that is wrong; I believe we should debate it. I say to the Government that the ACT party will not vote for this bill because, subsequent to the Government writing us a letter, we discovered it is collecting $2.5 billion more in taxation than it asked the House to approve in May. There is no possible justification for increasing any tax in New Zealand, even including that on a product like tobacco. Why do I say that? We all know that most people who smoke in New Zealand are people least able to pay tax. I think there is something a bit immoral about our being non-smokers—no ACT member of Parliament smokes, and we are always told we are the wealthy party—and the Government collecting a disproportionate amount of tax from those people least able to pay it. There is something immoral about that. It may be electorally attractive. I have been studying the liquor taxes a little bit—and I have to say it is an informal bit of research—but as far as I can see, the amount of crime committed by little old ladies does not appear to have gone up or down since Jim Anderton decided to whack a tax on sherry. I have not seen that make any difference to the crime statistics or to social habits, except that it has altered the amount of sherry that is sold—that is true.

💬 Brian Connell: Are they binge drinkers? I don’t think they are.

There might have been a few, but most people who drink a glass of port are not known for being binge drinkers. I have never heard of anyone binge drinking on port, but I guess, technically, it can be done.

I point out to the National Party that its leader made a very good speech the other day, saying that this Government is collecting an outrageous amount of tax. In fact, I think that the revenue from taxation under this Government has gone up by 50 percent—it is some huge figure.

💬 Brian Connell: Forty.

Forty percent. There is no doubt that record amounts of taxation revenue are now being collected, and now we are being told that if we send this bill to the Regulations Review Committee, somehow it will review that tax. I have a lot of respect for Richard Worth and the rest of that committee, but there is not an economist amongst them—not one. They will not look to see whether this bill has been properly drafted. As a bill like this comes up every year, and has done for the last 14 years, it is highly unlikely that there is anything wrong with its drafting. I have no doubt that this is very efficient taxation. The question I ask the Government—a Government that collects $7 billion more than it needs to—is why it should get another $12 million from smokers and another $7 million from people who enjoy a drink. We ought to have a justification of that from the Government.

I say that there is no case for increasing any tax. There is an overwhelming argument for a tax cut. We should always remember that that money does not belong to us. It belongs to the people of New Zealand who pay for their cigarettes and their drink. Accordingly, the ACT party, as a protest about the Government—and there is something immoral about this—collecting more in taxation than it needs to collect, will not vote in favour of this year’s subordinate legislation bill.