Subordinate Legislation (Confirmationand Validation) Bill (No 3)

I move, That the Subordinate Legislation (Confirmation and Validation) Bill (No 3) be now read a second time. The bill was referred by the House to the Regulations Review Committee on 7 October. The select committee presented its report on 3 December, recommending that the bill be passed with amendments supported unanimously by its members. The committee called for explanations from the six departments administering the 14 orders to be confirmed, or to be confirmed and validated, by the bill as introduced. The committee was satisfied with the responses.

At the Government’s request the Regulations Review Committee considered two matters not addressed in the bill as introduced. The first of these was confirmation of the Deer Industry New Zealand Regulations 2004. These regulations were being made just as the bill was introduced, so necessarily missed inclusion. They replace the venerable Game Industry Board Regulations 1985, reflecting the reform of the industry in more recent years. They lapse unless confirmed by the end of the Parliament, and this, of course, is the last scheduled confirmation and validation bill in the meantime, as an election must be held by the end of September. The select committee was satisfied that the regulations should be confirmed.

The second matter concerns amendments that would validate payments made under levy notices issued under the Alcohol Advisory Council Act 1976. The payments were made under notices issued between 1983 and 2004, so it can be said that National started it, Labour continued it, National continued it, National - New Zealand First continued it further, National and various odds and sods continued it further still, and the Labour-led Government has continued it still, down to 2004. So the guilt is reasonably evenly spread around the Chamber, and, indeed, into the heavens above, I think one can say at this point. The select committee’s commentary summarises, on page 2, the types of deficiencies in the notices. The select committee sought comments on the proposed amendments from key industry groups, and established that there was no opposition to them, so the committee accepted unanimously that it is appropriate to validate the payments made under the effective notices.

The commentary notes that two submitters called for changes to the actual principal Act, the Alcohol Advisory Council Act, but that, of course, is outside the scope of this particular bill. The select committee invited the Minister of Health at an appropriate time to consider the matters nominated by the Distilled Spirits Association.

I am grateful to Dr Richard Worth, as chair of the Regulations Review Committee, and to the members of the committee for their work on the bill. In particular I am pleased that the committee has supported the amendments dealing with the deer industry and Alcohol Advisory Council matters.

For some, the Subordinate Legislation (Confirmation and Validation) Bill (No 3) might not be a bowel-gripping topic, but for others, Dr Cullen included, it provides, I guess, a heady topic of infinite fascination. I am certainly looking forward to taking multiple calls in the context of the Committee stage of the bill, when there will be an opportunity to tease out some of the more challenging issues that arise in connection with this legislation.

Of course, it has been reported from the Regulations Review Committee that the structure of the legislation is simple—simple, I would say, in every respect. Apart from the title and commencement provisions, there are only two parts: Part 1, dealing with general and technical provisions; and Part 2, in two subparts, the first dealing with confirmation and validation, and the second dealing with a more particular form of validation.

So it is that we are looking at confirmation of instruments made in accordance with the Animal Products Act, the Animal Welfare Act, the Biosecurity Act, the Commodity Levies Act, the Customs and Excise Act, the Gambling Act, the New Zealand Superannuation Act, the Social Security Act, the Primary Products Marketing Act, the War Pensions Act, and the Alcohol Advisory Council Act—all, of course, heady provisions in daily use by significant members of the commercial community.

An interesting question to ask would be why we have legislation of this particular quality. Would it not be better to have sunset provisions in legislation of this type, rather than to have the process that the Regulations Review Committee determinedly embarks upon each year to make studied judgments on whether particular pieces of legislation should be confirmed and/or validated? In this particular case, after an exhausting and harrowing process, the Regulations Review Committee determined that it was appropriate for this bill to be passed, albeit with a number of amendments. So it is that the purpose of this bill is to confirm and validate subordinate legislation made under various Acts.

This is not one of those cases where whether what we are talking about are regulations in the strict sense of that term is a matter that arises for detailed consideration. Dr Cullen will be aware, certainly from his reading, that there are issues that are both intensely academic but also very practical as to how regulations within the purview of the Regulations Review Committee’s jurisdiction should be properly looked at. So we see here, in effect, not regulations—or not so limited, certainly, in that way—but a series of orders. I need refer only to the Biosecurity (American Foulbrood - Apiary and Beekeeper Levy Order) 2003—usefully reprinted in statutory regulation 2003/283—to make that point.

We asked the Government departments responsible for administering the subordinate legislation their views on these particular pieces of delegated legislation. We asked the Ministry of Agriculture and Forestry, the Department of Internal Affairs, the Ministry of Social Development, the New Zealand Food Safety Authority, and the New Zealand Customs Service, and our final port of call was Veterans Affairs New Zealand, whether, as departments responsible for administering the legislation, they considered that there should be the appropriate confirmation and validation orders. Surprise, surprise, they gave proper explanations and indicated their view that confirmation or validation was appropriate.

Dr Cullen has referred to the fact that the bill includes—properly—a request from the Ministry of Agriculture and Forestry in connection with amendments that would confirm the Deer Industry New Zealand Regulations. The reason for that request was simply that the regulations were not included in the bill as they were made only 2 days before the bill’s introduction. So there was an explanation from the ministry as to why that had occurred, which the committee found acceptable.

I shall not take up the time of the House at this stage to talk about issues that arose in the context of the submission made by the Distilled Spirits Association of New Zealand. But there are significant issues of substance there, and it would be a good outcome if in the Committee stage the Minister indicated what his position was in respect of those questions of anomaly, and I do not put it higher than that.

Dr Cullen’s opening comments in this second reading referred to amendments to validate the Alcohol Advisory Council levies, and so he should properly do so. There has been a history of error-ridden lawmaking relating to those notices. The story really starts with the notices issued in the years 1983 to 1987, and, again, of course, in 1989, with the unauthorised setting of levies by litre of alcohol. [Interruption] Mr Power reminds me that he was still at school at that time, and I certainly remember him as a very promising schoolboy in a high-profile school. He has gone on from there to prove himself in this Parliament as a person certainly worthy of recognition and advancement.

💬 Mr SPEAKER: Could the member come back to the bill.

I would like to come back to the notices if I might, because they were issued, as I said, in the years 1983 to 1987, then again in 1989. We are talking about the unauthorised setting of levies by litre of alcohol, rather than by what is called in the trade proof litre, which was the correct unit at that time. That was the first problem. The second was perhaps more serious, and it related to the unauthorised setting of differential rates for spirits depending on their alcohol content, with a further unauthorised rating on the basis of litre of beverage, instead of litre of alcohol, in the case of spirits with a lower alcoholic content. The third error related to notices issued in the years 1989 to 2004, where there was a questionable indication of goods and services tax payable on the levies. The final problem, with the notices issued in 2003 and 2004, was a failure to follow the statutory formula for calculating the levies.

Dr Cullen, in his comments, indicated that he thought the blame might reasonably be spread between the former National Government and the present Labour Government, but I trust that that recitation is sufficient to show that the errors have been substantially of this Government’s making and of its advisers. Certainly, that is what my catalogue of events indicates.

So what has happened is that this bill has a new subpart 2 of Part 2. That includes clause 15, “Payments made in accordance with levy notices to be taken to comply with relevant enactments”. For those members of the House and, I guess, members of the public who have access to this material, I tell them that listed in clause 17 are those levy notices, lettered respectively from (a) to (u), that are the subject of remedial work in the bill.

It is a great pleasure to take a very short call on the Subordinate Legislation (Confirmation and Validation) Bill (No 3). A bill sufficient to overshadow the Budget? A bill sufficient to wake up Ron Mark? This bill is none of those things. However, the public can sleep easier in their beds knowing that Richard Worth is alive, well, and leading the Regulations Review Committee through its intrepid journey to ensure that none of those amendments or regulations are outside the Standing Orders. This is a process that we go through every year where we do not delay from doing the little tinkering and fixing jobs that occasionally the law requires. On that basis, I am happy to support the bill.

It is a great pleasure to speak on this bill, reminding me, once again, that even the sins of 1983 and 1984 have come back to haunt me. That is when these errors commenced, when I was a member of Parliament in 1983 and 1984. It is totally unfair to blame anyone, including myself, of course, for those defaults. The member at the time, the former Speaker Sir Richard Harrison, was a staunch supporter of the then Alcoholic Liquor Advisory Council from day one, and after the royal commission from 1976 onwards, and he would find a great deal of amusement in knowing that this problem had occurred.

As I understand it, in the discussions I have had, the problem arose, because the officials asked parliamentary counsel to draft an amendment to the procedure. Parliamentary counsel said: “Hang on a minute. The procedure you want us to amend hasn’t yet been approved by Parliament.”, and someone discovered they had been unwittingly using that procedure since about 1983. So things finally do get caught up with in this place, even if it does take about 21 years to work it all out. But this is New Zealand. New Zealand First is not going to make a song and dance of this issue. It is unfortunate, and that is what this bill is all about.

May I say that I was delighted to speak with the Distilled Spirits Association representative, who makes calls on us regularly and keeps us up to date with the industry, and makes sure that members of Parliament know what is going on. The question raised by the Alcohol Advisory Council is of great concern, and I do hope the Minister of Finance, who is in charge of this bill, will do something to remedy the problem raised. He gives me a nod, and perhaps in due course that will be remedied, as well. New Zealand First supports this bill. It does not intend to filibuster. It is a simple bill, which should go through promptly.

It was interesting to hear Mr Cunliffe say that every year the Government does a little tinkering and fixing of legislation in which drafting mistakes have been made. I think that should be a bit of a lesson to us.

💬 Hon Dr Michael Cullen: No.

Dr Cullen does not agree, but Mr Cunliffe is worried about the tinkering and fixing, so that is important. We should think very carefully about the legislation that we push through the House, particularly under urgency. If we did we might not have to look at it again, or do as much tinkering and fixing as we are doing under this period of urgency. Of course, there is always subordinate legislation that quite rightly fixes mistakes in legislation but I note that further down the Order Paper we have the Gambling Amendment Bill, to amend legislation that was passed only last year.

In terms of subordinate legislation, I am particularly interested in the validation of the Alcoholic Liquor Advisory Council levies. The National Party member gave us a very thorough look at the problems that have existed. Of course, Dr Cullen quite magnanimously admitted the cross-party fault that has existed with the levy notices that were issued in 1983 through to 1987, and again in 1989. They do quite rightly require fixing. The industry could quite rightly have sought some form of compensation for levies that have been paid but perhaps were not actually necessary. The industry itself, although it is keen to see these problems rectified, was well aware of the authority that it could have exercised in dealing with these in quite a different way.

I notice in the commentary on the bill that the Distilled Spirits Association when it gave its submission to the Regulations Review Committee put forward some proposals that have been ruled out as being outside the scope of this bill, but I agree with the member when he says the proposals put forward by the association do need a good deal of consideration. I too hope these will be discussed during the Committee stage. In brief, the association proposes a new model of product classification, in bands based on alcohol content, and suggests a requirement that information—

💬 Mr SPEAKER: That is not part of this bill.

Sorry, Mr Speaker, but I do hope these will be discussed because they are very important points, which were raised when the Distilled Spirits Association was asked for comment on this bill.

💬 Mr SPEAKER: That does not make them in order now.

The bill addresses two matters with regard to the validation of Alcoholic Liquor Advisory Council levies: firstly, the unauthorised setting of levies in the notices issued from 1983 to 1987, and again in 1989; secondly, the unauthorised setting of differential rates according to alcohol content.

This speech will be very brief, because ACT New Zealand is supporting the bill, but I want to sound a warning that it is very important that we look carefully at legislation when it is first introduced to the House, not when we have to tinker and fix things, as Mr Cunliffe has pointed out, further down the track. It is very important that the select committee process is respected and that people are able to make submissions at the correct times, and they are listened to very carefully when people have very valid concerns about the legislation that is being put forward. ACT New Zealand will support this legislation but we would like to sound this cautionary warning.

United Future did not have a member on the Regulations Review Committee, which considered the Subordinate Legislation (Confirmation and Validation) Bill (No 3), but I have great confidence in the people who were on the committee, which was chaired, I am sure very well, by Richard Worth of National, and comprised members from the Labour Party, the ACT party, and the New Zealand First Party. I have read the committee’s report. I note it expresses itself to be very satisfied indeed that the bill is taking the appropriate action in terms of confirmation and validation, and therefore I am happy to signal United Future’s support for this reading of the bill and all its remaining stages.

I rise on behalf of National to support the Subordinate Legislation (Confirmation and Validation) Bill (No 3), but just before we rush this bill through its second reading and remaining stages the House should take a moment to reflect—

💬 Darren Hughes: Before National changes its mind on it.

I say to Mr Hughes that there are a whole number of things we would love to discuss, but I will try to keep my comments to the subordinate legislation. I want to make a comment about the validation of the Alcohol Advisory Council levies, which go back to 1983. I make the point that in reading the commentary on the bill—and I was not a member of the Regulations Review Committee—

💬 Darren Hughes: You can’t get everything right!

Lucky I was not. In reading the commentary it seems that it could be debatable whether the levies issued during that period were legal. The errors include, for instance, “for the notices issued in the years from 1983 to 1987 and 1989, the unauthorised setting of levies by litre of alcohol, rather than by ‘proof litre’,” and “the unauthorised setting of differential rates for spirits depending on their alcoholic content”, and so on. That raises the quite interesting issue whereby people who paid that levy may now feel they were not legally required to do so. Here we are, under urgency, in the dead of the afternoon, and with the Government rushing through a work programme that is sketchy at the best of times, having to validate some levies that are, at best, debatable. I think the House should reflect on that, and when we get to the Committee stage National members will be taking the opportunity to have a very good look at those levies just to make sure.

I do not want to dwell too much on the errors of Parliament back then. I want to address another part of the subordinate legislation before us. I turn to clause 12, which validates the Social Security (Rates of Benefits and Allowances) Order. As Parliament will know, those rates are annually confirmed through Order in Council, and if, through this subordinate legislation, Parliament was not to reconfirm them, they would lapse. Today we are putting those through, and that is the reason, in part, that National is supporting this legislation. But I want to draw to the House’s attention the likely changes that will take place to some of those social security benefits, and, in particular, to give some idea of what the situation looks like for those New Zealanders who currently have a war pension payable under the War Pension Act of 1954.

Although it is difficult, from the legislation, to see exactly which particular people we are talking about, I want to give the House some idea. Their current allowance is $159.76, and that will rise to $162.24. I think it is quite interesting that here we are, in this Chamber—a war memorial itself—recognising this issue, but I want to make the point that that is roughly a $3 increase for those in receipt of war pensions under the Act of 1954. National supports that, in the sense that at least those people are getting something, but I see the Minister of Finance scrunching up his face, and well he might. Those New Zealanders receiving that pension have, over the last 5 or 6 years, had to go through significant cost increases passed on by a Government that does not care about New Zealanders on fixed incomes. New Zealanders who pay rates bills have found that they have gone up by about 10.2 percent per year, because this Government passed the Local Government Act, which allows local government bodies to carry out any crazy idea that comes into their head.

I was delighted, if I may say so, that the Minister of Finance, who also chairs the infrastructure committee, chose not to proceed with the Whenuapai commercial airport, because that would have dumped a whole lot of costs on the ratepayers of Waitakere. That was a very wise decision, if I may say so. My point is that the costs were the costs—

💬 Simon Power: You shouldn’t say so.

I should not say so; OK, I will say so in the papers. But the point is that the Government is quite happy to say to the pensioners of New Zealand that here are some additional costs—that here is a 10.2 percent increase in their rates bills. Similarly, early on in the year the Government passed the indexation of petrol. Many fixed-income New Zealanders will have noticed, when they go to fill up their cars, that the price of petrol has gone up. It will go up every year because the Government has passed enabling legislation to allow petrol to be indexed.

We also saw the Associate Minister of Health Jim Anderton introduce a bill to provide a sherry tax—a bill that was passed under urgency, I might add. Many of us remember that the Minister came to the Chamber and told the people of New Zealand that he was doing that to stop young New Zealanders from drinking. But not too many young New Zealanders drink sherry. It is not too cool to turn up on Saturday night with a flagon of sherry tucked under one’s arm. So what he did was rob dollars and cents from the pension books of New Zealand. Pensioners sitting at home are unable to afford their sherry. That is why, in my electorate, two major sherry producers are now having financial difficulties. They cannot sell it. [Interruption]

I say to Mr Hughes that he is a young man, and he does not go out on Saturday night with a flagon of sherry tucked under his arm. I am slightly older than he is, and I do not drink sherry, either, but I will tell him that the cost has gone up by about $14.50 because of that tax increase. That is the additional cost. Many older New Zealanders who like a sherry on a Friday or Saturday night cannot afford it because Jim Anderton decided he did not want 16-year-olds to drink it. He has robbed them of their sherry on a Saturday night.

My point is that we are here, in the dead of the afternoon, forcing through a subordinate legislation bill. Why are we doing that? Because without it New Zealanders getting a war pension will not get an extra $3. At the same time, we have a Government that is very happy to have rates go up by 10.2 percent, very happy to have petrol indexed—

💬 Darren Hughes: How will National stop that?

If you want a discussion on how National would fix things, I am very happy to have it.

💬 Mr SPEAKER: Order!

Sorry, I was referring to the junior Labour whip, who was encouraging me.

💬 Mr SPEAKER: Yes. The junior whip will keep quiet.

I think so. The junior whip was getting excited. He wanted me to give the National Party manifesto. I would have been more than happy to take a 20-minute speech on that, because New Zealanders want to hear that sort of information. They do not want to hear the drivel of the member for Otaki.

I go back to my point about the bill, which is that we have a Government that is happy to pass on costs to fixed-income New Zealanders across a range of activities, whether it is rates, petrol, sherry—you name it, the Government taxes it—as the Government has done 30 times this year. I note that the Minister of Finance had no answer to that on Morning Report this morning. He has raised levies and taxes 30 times this year, and under this Subordinate Legislation (Confirmation and Validation) Bill (No 3) the poor old war pensioners get three bucks—a $3 increase. We look forward to engaging with the Government on this matter in the Committee stage, because we think fixed-income New Zealanders deserve more.

I want to draw attention to Part 2. Rather than talking about it during the Committee stage, I want to speak about it now. Clause 11 relates to the Gambling Act. There are two parts in that Act that I want to draw the House’s attention to. National will certainly support the Subordinate Legislation (Confirmation and Validation) Bill (No 3), but I want to look at the Gambling Act and the Gambling (Problem Gambling Levy) Regulations, and the value of the weightings given to W1 and W2 in the levy formula.

The recommendations to Cabinet a couple of years ago suggested that the weighting should be 0.8, based on presentations, and 0.2, based on player expenditure. There is not any substantive information around in terms of presentations; many figures are pulled out of the air to justify the weightings based on people who are fronting up for problem-gambling assistance. That is why the Cabinet policy committee, back in 2001, suggested those figures. But the regulations state that 0.9, or 90 percent, of the levy will be based on presentations, and 0.1, or 10 percent, on expenditure. It is certainly National’s view that those figures are unrealistic. They cannot be substantiated in any way. Probably a more realistic figure would be 0.7, or 70 percent, for presentations and 0.3, or 30 percent, based on expenditure or turnover. Those would be fairly conservative estimates but, certainly, more realistic than what we see in the regulations now.

The second point I draw the House’s attention to is the levy that has been set. It has been interesting to note that, according to the answers to a number of parliamentary questions I have asked, the levies have gone up substantially over the last few years. In the 2002-03 year, the sum was $9.8 million; in 2003-04, it was $12 million; and in a Department of Internal Affairs document the figure for the 2004-07 period comes out at about $54.5 million. That is a substantial increase in the gambling levy on gaming operators, given that they are also required to have harm minimisation programmes, and given the increased compliance costs like electronic monitoring, and the reduced site rentals. When we look at the combination of all the increased compliance costs and the lack of money going back into the industry, we see that the people who lose out are the charities that are dependent on these funds to fund their operations.

While National accepts that there needs to be a problem gambling levy, we submit that the levy is not based on factual material. The Ministry of Health, which will take over the handling of the problem gambling levy, has not been able to supply me with substantive information on what the figure of $54.5 million over the next 3 years has been based on. Just as with the harm minimisation programmes, a programme that is currently available in Australia and that could be used extensively in New Zealand has been overlooked, and we are finding that exorbitant consultancy are fees being charged. In fact, I am told that the charitable clubs in New Zealand will probably spend about $1 million on their harm minimisation programmes, whereas programmes can be bought off the shelf in Australia for less than $10,000.

The point I am making is that there are huge costs that gaming operators are having to contend with. At the end of the day, the losers are those organisations out in the community that are dependent on charitable funding to run their operations.

Bill read a second time.

Instruction to Committee