Standards and Conformance Bill

This part includes debate on the schedule.

I am not at all surprised this evening that the Government has chosen not to take a single call on a bill to do with standards. If we think about it, it is not at all surprising. If we look at this Government, which Helen Clark promised would set new high standards, and the shemozzles we have seen since, I am not surprised that not a single member of the Labour Government would want to participate in a debate on standards. We could talk about the standards that Labour has set around immigration law, for instance, and Mr Phillip Field. [Interruption] Lianne Dalziel, the Minister in the chair, has finally popped up with a word in defence of Phillip Field. She is an ex-trade unionist.

💬 Hon Lianne Dalziel: Tell us about the bill.

The bill is about standards. I would like the Minister in the chair to talk about standards. I think it could be quite interesting to hear from this Government about standards. We could hear about standards of ministerial conduct. We could hear about standards of parliamentary conduct. We have seen appalling examples of standards from everybody in the Government—from the Prime Minister down—in respect of this bill.

This Government says, in this classic Labour bill: “Do as we say, not as we do.” Government members want to have a Standards Council in order to preach to others about what should be the standard, but they do not want any standards applied to themselves. We had the extraordinary exhibition from the Prime Minister today that showed that the Government would not accept even the standard of the Solicitor-General or the Auditor-General. I ask the Minister why we are going to all this effort to pass laws about standards in respect of laboratories and petroleum, all because we want to have an independent standard-setting process. We have one of those—it is called the Auditor-General. What happens when the Auditor-General says that the Government has breached the law? Labour members say that it is nothing to do with them and that the Auditor-General is wrong.

💬 Hon Chris Carter: Tell us about the $16 million.

I just challenge Mr Carter to talk about—

💬 Hon Chris Carter: Oh, tell us about the court case.

One minute the member wants me to refer to the bill on standards, and the next minute he wants me to talk about building standards. I have a simple question for Chris Carter. Can he tell me whether houses in New Zealand—he is an ex-Minister in this area—should be built according to standards set by Standards New Zealand or whether we should defer to the Department of Building and Housing? Can the Minister in the chair tell us? I have here a press release from the Certified Builders Association, which wants to know what standard applies. Can Mr Carter—a Minister of the Crown, the previous Minister for Building Issues, and the Minister of Housing—tell us? Can the Minister answer the question?

💬 Hon Chris Carter: I’ve never been in court.

I have to say to the member that I stand by my record of standing up for causes, and I will continue to do that with courage—something that that member never does. But can he simply answer the question? What happens with Labour members is that they just want to change the law retrospectively if they get it wrong. Is that what Mr Carter will do with regard to breaking the law—

💬 Hon Chris Carter: I didn’t break the law. Did you, Dr Smith?

Actually, the Solicitor-General says that Mr Carter did break the law. Mr Carter is subject to a court case for breaching the law over the pledge card. What is his answer on that?

💬 Lindsay Tisch: No standards.

He has no standards. I simply ask the Minister in the chair and Mr Carter how Labour members can preach about standards to other New Zealanders when they blatantly ignore the law and ignore the standard-setting authorities around Parliament—the Chief Electoral Officer, the Solicitor-General, and the Auditor-General. We simply say that it is hypocritical of the Government to advance law on standards when it ignores the standards set for others.

The Labour Government is not only failing to live up to and set the standard, but it is also consistent in not caring about other people’s money. Let us look at Part 2, which is about—fair enough—amalgamating accreditation bodies to make one body, so that organisations can now receive accreditation under this new organisation, called the Joint Accreditation System of Australia and New Zealand. But we are not talking about more compliance costs; we are talking about more actual costs to those organisations.

I particularly want to challenge some of the other parties that supported this bill, like New Zealand First and United Future, in relation to the organisation called Health and Disability Auditing New Zealand. It is not just any organisation; it actually accredits services. It is a designated auditing agency approved by the Director-General of Health to audit all service areas under the Health and Disability Service. Under its existing accreditation, which is from International Accreditation New Zealand, the fee cost is $18,915 for 3 years. I wonder whether my colleagues would like to take a guess at how many times that fee will increase, when the organisation switches to accreditation under the Joint Accreditation System of Australia and New Zealand?

💬 Hon Members: Tell us.

Five is too modest—10 times! The fee will be $155,823, which is 10 times the previous fee. I am not too sure what benefit it will buy for that organisation. Anyway, a member of the organisation raised that point with the Ministry of Economic Development, which, once again, said that he should not worry; it was a Government department and it was there to help. So the ministry talked to the Joint Accreditation System of Australia and New Zealand and said that maybe it should review its fee structure, as it seemed a bit high, and that overnight there had been a tenfold increase. So the ministry came back with a counteroffer. Can members guess how much it was?

💬 Kate Wilkinson: Nine times.

No, not quite that much. It actually reduced it, for 2 years, by $20,000. So from the original increase in fee, which was about $137,000, the increase will go down to $110,000. What can be gained, overnight, by an accreditation fee increase of $110,000?

💬 Dr Jackie Blue: Hope.

Dr Jackie Blue is on the Health Committee. She can tell me how much $110,000 could purchase for us in terms of any operations. How many people could be put back on the waiting list that was culled?

I would like the Minister to take a call. I think that having a one-standard accreditation agency is a sound concept, but how do we justify the cost? We are not even talking about compliance costs—some of the organisations involved are providers of the health service. Overnight, Health and Disability Auditing New Zealand will have to pay an additional $110,000 simply to get accredited. I want the Minister to take a call and say what additional advantage will be offered to those health service providers that can now get an audit from that very reputable organisation, Health and Disability Auditing New Zealand.

I think we need to take these issues seriously. This bill is not just about increasing compliance costs that people will have to adhere to; it is actually about increasing, overnight, by $110,000—by 10 times—the cost for an organisation that is already accredited, appointed, and approved by the Director-General of Health. If that organisation is doing such a bad job, we should ask the director-general about it, but if he felt confident to appoint that agency, what is the justification for it suddenly to incur a $110,000 additional cost?

The CHAIRPERSON (Hon Clem Simich): Before I call the next speaker, I will deal with another issue. The previous two votes should have been announced as “Ayes: 66; Noes: 51”. So both votes will be altered accordingly. Thank you.

I am very pleased to take another call on the Standards and Conformance Bill and to highlight yet another clause that gives rise to concern. Before I do so, I say that people should be really concerned and alarmed about the Joint Accreditation System of Australia and New Zealand, because that is another one of those areas where there is agreement between Australia and—

💬 Hon Lianne Dalziel: It was set up in 1998 by the National Government.

Well, I still have concerns around that relationship, and I hope—[Interruption] Well, I was not here then, and I can still have concerns around it. If it is anything like the Trans-Tasman therapeutic goods agency model, then I think we would do well to have concerns around it.

I draw the Committee’s attention to clause 16, “Powers of Council”. I note that part of the function is to: “collect and disseminate information relating to conformity assessment, including the publication of reports, pamphlets, books, journals, and other publications: (m) provide advisory and other services in respect of conformity assessment:”, and: “(n) promote research into the methods of conformity assessment:”. Members should look at that clause, coupled with the review and the consultant’s report back on the review, which states: “there are a number of gaps in knowledge of the standards and conformance infrastructure amongst the business community; and some regulators have opted not to utilise New Zealand’s standards and conformance infrastructure, especially in terms of developing or applying standards to support performance-based regulations and/or using third party conformity assessment. The report also found that some firms are not aware of the potential benefits standards and conformance may offer their industry generally or their individual business specifically.” I have to say, given the compliance costs involved with this bill—which have been outlined admirably by previous National speakers—that businesses will not look to adopt any sorts of standards or conformity in regard to this bill at all if they assess what the cost will be as a consequence.

Members should look at Telarc’s accreditation costs from the Joint Accreditation System of Australia and New Zealand. They are a significant part of Telarc’s cost structure, being the third-largest cost after staff costs and rent, and equal to approximately 50 percent of its 2004-05 annual profit. That is pretty substantial and pretty horrific, and I suggest that not too many businesses will be rushing to get any standards or certification from that organisation. In 2001 the fee structure was amended in such a way that the impact on Telarc was a 30 percent increase in accreditation costs per certificate issued to its clients. That is a huge increase, and it makes a huge dent into the profits of such companies. So how can they possibly try to remunerate any staff, when those sorts of costs are involved?

The Minister in the chair, the Hon Lianne Dalziel, waxes lyrical about wanting to reduce compliance costs in this country, yet when push comes to shove she does absolutely nothing—in fact, she did the reverse. This bill is a classic example of the ignorance of this Government around fiscal capability and responsibility. The Government has no idea of what its actions continue to mean for businesses in this country, with the pervasive increased costs it keeps dumping on them, and this bill is a hugely significant example of that.

We note that the Joint Accreditation System of Australia and New Zealand charter states that it is a not-for-profit organisation. One has to wonder what on earth it is planning to do with all of those fees, and whether, with the new agency being created, it will start imposing a lot of other constraints and conditions on all sorts of businesses, and requiring them to meet all sorts of standardisations.

When we look at the other provisions that have already been outlined, we see that the Minister can identify any sorts of specifications. New section 13(2)(m), inserted by clause 16, allows the Testing Laboratory Registration Council to: “provide advisory and other services in respect of conformity assessment:”. For goodness’ sake! The Government cannot even do that for itself, let alone for the public of New Zealand. It has failed miserably to provide an example to the New Zealand public in the way in which it conducts its own affairs, yet it expects the New Zealand public to have confidence in the way it acts on behalf of business.

It is very hard for ordinary people to get excited about this Standards and Conformance Bill. The world of standards and conformance is all long words, acronyms, and plenty of specification numbers. This bill is so convoluted that none of the many media people around Parliament has even taken the slightest interest in it.

This bill is designed, firstly, to make sure that the Standards Council develops standards for goods and services, and that the Testing Laboratory Registration Council makes sure these standards are being met and conform with international standards, norms, and practices. That means, in lay speak, that New Zealand can be trusted internationally to produce goods and services of a high and consistent quality. The average New Zealander may not be interested in the detail of this bill, but he or she does expect, and rightly so, that goods purchased, and services used, are functionally effective. People also expect that the standards in force in New Zealand are in line with international practice.

But take a simple, small issue—noisy exhausts. New Zealanders are very unhappy about the current standards concerning noisy cars and the testing regime for noisy exhausts. New Zealand is out of step with the rest of the world in terms of noise standards. For most of us, it is pretty irrelevant, but not for someone whose home happens to be near a road that has been designated by boy racers as a drag strip—and there are plenty of those around the country. For someone whose hotel or business is in the centre of a city, the situation is a disaster. Families lose sleep and patience, businesses lose patronage and income, and our country loses its reputation for being clean and green.

Our legislation has become weaker and harder to enforce over the last few years while most other countries—those of Europe, the UK, and Australia—have tightened their standards. Australia has updated its requirements so that all new cars need to meet a drive-by test of 76 decibels, but in New Zealand, cars have to meet only an 81-decibel test. But the real problem is that we allow the modification of cars with no commitment to a regular testing regime to ensure that even our inadequate standards are met. Cheap Japanese cars, with modified noisy exhausts, have been a persistent and growing problem ever since Labour came to power.

Progress to be reported presently.

House resumed.

The Chairperson reported progress on the Standards and Conformance Bill.