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Address at signing of Agreement in Principle with Turanga

beehive.govt.nz — Fri, 29 Aug 2008 14:31:00 +1200

Speech notes prepared for delivery at Mangatu marae, Whatatutu

Thank you all for your warm welcome here today for the signing of the Agreement in Principle.

This is an important day, not only for those of us gathered here today, but for those who have gone before us and those who will follow in our footsteps.

I would like to acknowledge the people of Mangatū Marae, and all of you here today, especially those who have travelled from across the East Coast and from as far as Wellington and other parts of the country to take part in this important occasion.

The signing of the Agreement in Principle today is a major milestone for Tūranganui-a-Kiwa, for the Crown, and for the relationship between us.

The Agreement in Principle
I am delighted to be here with my colleagues the Minister of Māori Affairs and the Associate Minister in Charge of Treaty of Waitangi Negotiations, to sign the Agreement in Principle with Tūranga.

The Agreement in Principle is the culmination of the dedication and commitment of the Crown and Tūranga to reaching a settlement, the leadership and support of the negotiators, the mandated bodies and their staff, as well as the support of the iwi, hapū and whānau of Tūranga who have, as part of this process, made some significant decisions that will have a major influence on the future of Tūranganui-a-Kiwa.

I particularly wish to recognise the members of Tūranga Manu Whiriwhiri, who have come together to front this phase of the negotiations on your behalf. I have no doubt that the clarity, drive and determination with which they have negotiated this settlement package has only been possible through the hard work and support of their respective iwi, hapū and whānau groups, and of the people of Tūranganui-a-Kiwa. It is because of this support that we are all gathered here today.

I think it is important to recognise that the way in which Tūranga and the Crown have reached this Agreement in Principle has been unique in the history of Treaty Settlement negotiations. You have come together not as a single iwi, but as a collective of neighbouring claimant groups, each separate and independent, but all with a common interest in moving your claims forward. This approach has not always been easy, and has required flexibility and a will to innovate on the part of both Tūranga and the Crown. But I think the fact that we are standing here today tells me that this new, collective approach has been a successful one.

Over recent months, iwi from the Far North right through to the South Island have made a great deal of progress in Treaty Settlements. And as they have enjoyed that progress we have seen a calm, mature discussion of our nation’s history and the significant place of injustice in our national narrative. The news of success in Treaty Settlements has not been greeted with a backlash or by petty political opportunism.

I think it is also fair to say that the great majority of New Zealanders have taken pride in being able to celebrate the progress in settlement as well. The efforts to create renewed division between Maori and Pakeha that seemed a serious threat just four years ago have been held at bay.

But even as we celebrate collective progress for Maori, we must be careful not to lose sight of the individual histories that are so important.

Your history is one of great resilience, strength, and pride. But it is also a tragic history; a history of state violence, confiscation of land, and stigmatisation within your own communities.

As the result of Crown action your people have at times suffered poverty, famine and significant hardship. This history was vividly explained when the iwi, hapū and whanau of the Tūranga region came together at the Waitangi Tribunal hearings in 2001 and 2002.

Those who attended the hearings heard a story of both harrowing loss and strength in the face of adversity. They heard how, as a result of the Crown’s actions, Tūranganui-a-Kiwa suffered the loss of much of their lands, and considerable loss of life. They heard especially of the Crown’s 1865 attack on Waerenga a Hika pa, the subsequent detention without trial of more than a hundred Tūranga Māori on the Chatham Islands for over two years, and the execution of unarmed prisoners by Crown forces at Nga Tapa, which the Waitangi Tribunal’s Tūranga report described as “a stain upon the history of this country”, one that it was long past time for it to be put right.

But the hearings also showed how your people have fought throughout to hold on to your land, your language and your culture. In coming together collectively for the first time as part of the Tribunal’s new regional approach, your people showed a pioneering spirit of co-operation that has continued into the negotiation of this Agreement in Principle.
In summary, you are a people who have suffered significant injustice. But you are also a people who have in the face of that injustice strengthened your culture and kept moving forward together.

Today we take a new step forward, and present to the iwi, hapū and whanau of Tūranga and to the public of New Zealand, a settlement package that I believe meets the interests of all.

Settlement package
The Agreement in Principle is a non-binding document that outlines the Crown’s proposed redress package to Tūranga that will be used as a basis for a Deed of Settlement.

The Crown acknowledges that this settlement can never fully compensate for the loss and prejudice Tūranga have suffered. However, due in no small part to the pragmatic and dedicated approach taken by your negotiators, we have agreed a package that includes:

• an historical account of the relationship between the Crown and the iwi, hapū and whanau of Tūranga and the events that gave rise to the breaches of the Treaty of Waitangi. This document, together with the Crown acknowledgments of its breaches of the Treaty, is an important step in restoring the Crown’s relationship with Tūranganui-a-Kiwa and the honour of the Crown. I want to acknowledge the considerable amount of effort that your negotiators have put into discussing and negotiating the text of the historical account, particularly over the past few days. There is already a great deal of consensus between the Crown and Tūranga on many aspects of our shared history, and both parties are committed to continue working together in the spirit of compromise to resolve those areas where we disagree;
• a quantum of $59 million which can be used to purchase licensed Crown forest land, along with the accumulated rentals associated with this land. The Crown has also offered to gift 16 properties from the Office of Treaty Settlements’ Gisborne landbank to Tūranganui-a-Kiwa. In addition, you will have the opportunity to purchase, within two years, 18 further Crown-owned properties;
• the return of a number of wāhi tapu sites, including Young Nick’s Head Historic Reserve, to allow for the restoration of your manawhenua and reconnection with the lands and waterways throughout your rohe; and
• the proposed gifting of two Gisborne District Council properties in central Gisborne, in recognition of longstanding grievances regarding land transactions over those sites.

The package also includes redress that focuses on cultural revitalisation which aims to address Tūranga’s cultural relief framework expressed through Popo (paw paw).

This redress provides for:

• recognition of ownership and kaitiakitanga of Te Hau ki Tūranga, the carved meeting house currently held by Te Papa Tongarewa/Museum of New Zealand;
• $1 million for the preparation and implementation of a cultural revitalisation plan;
• the gifting of 6 further properties from the Office of Treaty Settlements’ Gisborne landbank for use as a cultural base by the constituent groups of Tūranganui-a-Kiwa; and
• $100,000 for a memorial to those Tūranga Māori who lost their lives as a result of past Crown actions.

Acknowledgements
This signing of the Agreement in Principle is a significant milestone for both Tūranga and the Crown. It is the culmination of a number of years of hard work by many of your people, including the numerous hours of preparation for, and attendance at, the Waitangi Tribunal hearings, and the intense period of negotiation over the last twelve months.

Engagement in the settlement process requires a tremendous amount of commitment and courage and involves some difficult trade-offs to be made both personally and professionally by those who are intimately involved. I wish to pay tribute to the leadership of your negotiators, who came together to form Tūranga Manu Whiriwhiri. You have all worked tirelessly to bring Tūranga to this historic point.

I also wish to acknowledge my colleagues, the Associate Minister, Hon Mita Ririnui, Hon Parekura Horomia and the Minister of Conservation for their support, and all the Crown officials who have contributed to this significant achievement. I want to especially acknowledge the assistance that the Crown Forestry Rental Trust has offered to the iwi, hapū and whanau of Tūranga, both during the mandating process and in negotiations to date. I also want to thank the Mayor of Gisborne, and the Councillors and Chief Executive of the Gisborne District Council, who have shown tremendous support for these negotiations.

Next steps
The next step for Tūranga and the Crown is to translate the Agreement in Principle into a draft Deed of Settlement, for ratification by the iwi. Now that the proposed settlement package has been made public, both parties will embark on a process of consultation. Particular focus during this time will be on the resolution of overlapping interests of neighbouring iwi. The Agreement in Principle was developed with these interests in mind, and much work has already been done.
Given the seriousness of these issues, discussions will take time. But both parties are committed to achieving a Deed of Settlement within a year of this signing, which is an ambitious, but achievable task ahead of us.

Conclusion
I thank you all again for welcoming us here in such large numbers today. I am honoured to be here today on behalf of the Crown to sign this Agreement in Principle with Tūranga.
No reira, tēnā koutou, tēnā koutou, tēnā koutou kātoa.

Looking for future solutions

beehive.govt.nz — Thu, 28 Aug 2008 12:58:50 +1200

Speech notes for address to National Conference for Property Council New Zealand, Te Papa, Wellington.

Introduction

Maintaining the right conditions in which business can prosper is one of this government’s top priorities and the commercial property business is no exception.

As Minister for Building and Construction, I want to ensure we build high-quality homes and buildings that meet the needs of all New Zealanders wherever they live and work.

And we need to ensure buildings stand the test of time so that they can be used and enjoyed for generations to come.

The commercial property market, like all sectors of the economy, can be affected by the vagaries of the market.

But bricks and mortar will be with us for generations. That’s why building right, first time, is so important.

What we build today should be regarded as a legacy to our children. So what happens in the short-term, though commercially important, should be seen in the context of what that legacy is and how we manage its growth and development.

That’s why organisations like the Property Council of New Zealand are so important. You understand the market and you help nurture its growth and prosperity.

The property market is entering a period of change. That change is being driven by many forces – some are home-grown but others are international.

There’s a lot happening at a local, national and international level that will affect the building industry.

The need for a greater cross-sector strategic direction was brought into sharp focus at the Building and Construction Sector Leaders Forum held in Auckland earlier this month.

I brought together 60 leaders, (including Connal Townsend Chief Executive of PCNZ) and decision makers from the construction sector as well as representatives from local and central government to take part in a summit on the future of the industry.

It was the first time that so many major figures in the building industry had come together to discuss the issues facing the sector and I was encouraged by the feedback.

It looked at a range of global issues including: population growth, climate change, oil prices, growing consumer demand for sustainable products, land shortage and economic volatility.

Obviously, there are no quick fixes to any of these issues.

However, it was the beginning of a process to build a shared understanding of the big picture context and implications for the sector and to agree how we can best work together over time to address the big issues.

Sustainable Urban Development

Sustainable urban development is a key strategic issue for the housing sector. A range of factors are likely to contribute to an increase in demand for sustainable urban development including:

land becoming scarcer and more expensive, especially in our urban centres
Changing demographics – i.e. smaller family sizes
housing becoming less affordable
rising energy costs resulting in people wanting to live closer to where they work and play
a shift in consumer preferences for environmentally friendly living.

Quality urban developments can make housing more affordable by reducing the cost for each house. They are generally less costly to maintain and are better for the environment.

Challenges and opportunities for better urban developments include:

co-ordinating national, regional and local planning and implementation for large scale development
overcoming the length and nature of planning and development control processes
overcoming difficulties assembling land where there is multiple and fragmented ownership
developing a housing product – in terms of high density houses - that are affordable and suitable for families with children
ensuring the construction of medium to high density housing is to a high standard
ensuring integration between land use and transport planning, utilities and other service providers
addressing the lack of certainty and return on capital for private developers especially where wider public objectives are desired
overcoming community resistance to higher densities (especially from established communities experiencing infill housing and new high density developments
Developing the tools and powers to do large scale urban development.

In response to these issues, local government, central government and developers will need to work collaboratively in support of quality urban development. That is, development characterised by good infrastructure, green spaces and other services valued by communities such as access to schools, shopping, recreational and health facilities.

Hand in hand with good urban development is increasing awareness and demand for more sustainable buildings that will perform well into the future. I'm pleased to say there are positive industry responses underway to consumer preferences for greener and more efficient building products that maintain and enhance wellbeing.

We have been supporting market based mechanisms such as rating tools as a way of fostering progress. The Green Building Council of New Zealand is working with the sector to create a sensible approach to facilitating market-driven change in the commercial space. We support this type of approach to change with and alongside industry and its representative agencies.

Regulation

Since I have been Minister for Building and Construction, I have endeavoured to make a range of changes to the regulatory framework. These changes have been based on engagement with the actual industry professional’s including investors.

I have sought to drive an important programme of policy aimed at allowing New Zealanders to live and work in better buildings.

LBP and Product Certification

The government is beginning to make good progress on both licensed building practitioners and product certification. Builders and other building professionals are getting behind the licensed building practitioners scheme.

More than 10,000 have now applied for application packs and hundreds of builders and designers can now proudly call themselves a licensed building practitioner after gaining a license. The scheme will help raise skills and boost consumer confidence in the building industry.

Product certification is another important policy area, as you know. Allowing manufacturers to show their products are effective when applied correctly will speed up the consent process as well as the added benefit of strengthening consumer confidence.

With the passing of the Building Amendment Act earlier this year the Department has been able to prepare the final stages of a voluntary scheme due to be launched later this year. The next stage is drafting the regulations that cover the scheme and how it will run.

Streamlining

An important reform is aimed at helping builders by simplifying the design and approval of simple starter homes by introducing a single compliance document for modest simple homes.

The document is intended to bring together in a way which has not been done before all the compliance information needed to build a simple starter home.

I hope it will send a signal to the market to build more affordable homes and will demonstrate that they can be of high-quality and appealing.

We are coming to the end of a consultation on the document and the Department will soon set about going through all the submissions to see what if any improvements can be made.

Details of a competition for builders and designers to build a simple home using the new document will be announced soon.

I believe the compliance document will help allow simple starter homes built with quality materials and in a certain way to gain quicker consent approval.

Work continues on:

Introducing national multi-use approvals – a new system of pre-approval for designs and plans for work that will be replicated on a large scale. Councils will still need to assess site specific requirements.
Making the requirement for a Project Information Memoranda (PIM) voluntary.
Improving the process for managing variations to consented building work.
And, extending the list of low-risk work that can be carried out without needing a building consent.

This is likely to include work such as:

removal/alteration of a wall that is non load-bearing and not a bracing element
installation or replacement of windows, or exterior doors or roof windows, provided structural elements are not modified
alterations of dwellings for access purposes, including doorway modifications and access ramps, but excluding wet area accessible shower.

I expect that such a move will take around 10% of building consent activity out of the system. This will include most internal shop or office fit-outs.

These initiatives, which will also benefit builders, form the cornerstone of the streamlining the consent process.

I hope to be able to announce the next steps in this important area in the coming weeks.

Work is also being done on other initiatives which will also benefit the industry, reducing delays and bringing down costs.

We are continuing to look at better use of technology to support the building consent process, including investigating online consenting systems.

We are working with local government to explore the idea of regional consent processing units or shared service arrangements which will pool expertise and manage more complex consents.

And we are looking at ways to improve collection and sharing of information on building products and product performance.

Unit Titles Bill

The Government has responded in other ways to meet the demands of a rapidly changing property market.

A bill has been introduced that will clarify the rights and responsibilities of unit owners, bodies corporate, developers and commercial tenants.

The Unit Titles Bill will modernise existing legislation and applies to commercial and residential property. Importantly, it will make joint decision-making easier by promoting participation and by removing requirements for unanimous resolution.

It also provides intensive developments including mixed-use development, such as industrial parks and shopping centres not well-served by the current Act.

And it will encourage sound property management practices that will protect the long-term value of investments by introducing requirements for long-term maintenance plans.

This work programme is, and will continue to be, a top priority for this Government and will benefit the property sector. Your group is an important part of this works development and it is important that this work meets the needs of all property developments.

Address to the Association of Superannuation Funds of New Zealand conference

beehive.govt.nz — Thu, 28 Aug 2008 11:02:06 +1200

Finance Minister Hon Dr Michael Cullen’s speech notes prepared ahead of the opening address to the Association of Superannuation Funds of New Zealand conference, Auckland

Good morning and thank you for that introduction.

It is a pleasure to be able to speak with major players in the savings industry in what has been a major year for savings in New Zealand.

I will open my brief comments today with a reflection on how far we have come in transforming the savings landscape in New Zealand since I spoke to the Association last year. We have made huge progress and I believe strongly that the enthusiasm shown by New Zealanders for KiwiSaver means that we are building a new sustainable work-based savings culture in New Zealand.

But before leaving plenty of time for your questions, I also want to place our collective work to expand workplace savings in the wider effort to address New Zealand’s very significant debt problem.

Yes, New Zealand does have a very big debt problem. And that debt problem is a drag on our economic growth and a major and ongoing risk for our economic security.

Our work to improve personal savings – through KiwiSaver and through tax reform – sits right alongside the government’s work to lower crown debt, build up financial assets in the New Zealand Superannuation Fund, and to protect state assets in a major effort to lower our national debt. And this work to lower our national debt is inseparable from our plans to lift New Zealand’s long-term economic performance and to continue to raise living standards for New Zealanders.

A tough year for the economy

But first, I do need to acknowledge that after the longest period of economic expansion in several generations, we have now recorded a negative quarter of economic growth. Treasury expects that the second quarter of 2008 will also have turned out to be negative, in line with a significant slowdown in the global economy.

New Zealanders have certainly felt pressure this year, both at the petrol pump and the supermarket checkout. And those with mortgages have found that the global credit crunch has kept interest rates high, even after a cut to the Official Cash Rate.

While relief is in sight – both through lower interest rates and personal tax cuts on 1 October – the seriousness of our economic challenges must be addressed and discussed with the seriousness they warrant. I know that with election season soon to be upon us, the temptation to reach for slogans and platitudes will be growing by the day.

But for our part, the Labour-led government is going to continue to discuss our economic plans in a way that shows both respect for the pressures New Zealanders are facing, and that demonstrates that we understand the challenges we face as a nation.

A new savings culture

In that spirit, we must recognise that New Zealanders themselves are showing just how seriously they are taking one of our major economic challenges – our disappointing record on household savings.

As we approach the end of August 2008, it is remarkable to recall that New Zealand’s adoption of active government promotion of work-based retirement savings only came into force less than fourteen months ago.

In my address to this association in Wellington last year, I was proud to announce that the Inland Revenue Department had received 92,000 KiwiSaver enrolments in the five weeks following the scheme’s launch.

I dared to say at the time that the Treasury’s initial take-up forecasts looked likely to be too conservative.

But I never imagined that a year later I would be able to come back to this association and say that as at 9 August 2008, the number of New Zealanders in KiwiSaver schemes had reached 770,000.

And I certainly never thought I would be able to announce to you today that Treasury is now budgeting for KiwiSaver numbers to reach 1 million in the first half of 2009. This compares to our original forecast of reaching 855,000 KiwiSavers by 30 June 2017.

What we are seeing through KiwiSaver is nothing short of a savings revolution in this country.

All those who doubted KiwiSaver would take off were proven wrong within months of the scheme’s launch. And all of those who are still trying to argue that KiwiSaver is not leading to a new net savings really need to let go.

The headline numbers alone suggest a major shift – we will have the equivalent of half the New Zealand workforce in KiwiSaver schemes by this time next year. Are those who are trying to argue that KiwiSaver is not leading to net new savings really trying to argue that half of New Zealand workers were already actively saving for their retirement before the scheme’s launch?

And when you reflect on the demographics behind the headline KiwiSaver numbers, the emergence of a new savings culture becomes even clearer. The evidence of this is highlighted by the reality that about 120,000 KiwiSavers are in the 18-to-24 age group, and a similar number are in the 25-to-34 age group. The majority of these young savers will be new savers.

The new reality in New Zealand is that participation in workplace savings is now the norm – that is excellent news for the people in this room. And it is excellent news for the New Zealand economy.

Our household savings rate is among the worst in the world. Indeed by the World Economic Forum’s estimates New Zealand ranks 108th out of 131 nations for strength of private savings.

This obviously means that our living standards in retirement are not as strong as they could be. While New Zealand superannuation provides for a basic standard of living, many older New Zealanders have to work hard to make ends meet once they retire.

The lack of household savings is also a major driver of income inequality in retirement. Workers who do not save during their working life – or those who rely solely on their investment in the home they live in – will see a substantial drop in their income when they retire. And they will watch their colleagues who did save maintain a lifestyle in retirement that is comparable to the one they enjoyed during their working years. Thus the expansion in private savings we are seeing through KiwiSaver is the biggest assault on income inequality in retirement that we have seen in generations.

But from a wider economic perspective, our deficit of household savings is both a weight around our collective economic neck, and a risk for our national economic security.

Our poor savings record can be directly linked to the weakness and shallowness of our capital markets. This weakness deprives firms of capital for investments in productivity and innovation. Over the last eight years we enjoyed our longest period of economic expansion since World War II. But it is clear that our lack of domestic capital held us back from even stronger growth.

And our poor savings record can be directly linked to our huge debt to the rest of the world that is a significant risk to our position as a safe place for investment from offshore.

National debt

At 31 March 2008, New Zealand's national debt, as measured by a negative net international investment position, stood equivalent to 86 percent of gross domestic product.

Among rich, developed nations, only Iceland has a higher level of national debt on such a measure.

As I have said, New Zealand's high national debt in part reflects a prolonged period of weak household savings in our country. The work of the people in this room, who have long promoted the benefit of greater savings, have always been a part of the effort to move our nation out of debt and to expand our economic potential. And now, the New Zealand Labour-led government has joined this effort by making saving easier than ever before.

But for many, many years, the Crown itself was part of the problem.

After some tragic policy choices in our country in our not-too-distant past – from the cancelling of the Kirk government’s superannuation scheme to the Think Big project to the sale of state assets – New Zealanders only recently have had a realistic hope that our country is again on the road to building-up its private and public capital reserves and securing a stronger place in the global economy in which we must compete.

It was only in financial year ended June 2006 that the Crown moved, for the first time in this country’s history, into a net positive financial asset position.

The Crown’s net financial asset position, inclusive of the financial assets of the New Zealand Superannuation Fund established by this government early in its administration, stood at a net positive 1.2 per cent of GDP at 30 June 2006.

In its May economic and fiscal report, the Treasury forecast the Crown’s positive net financial asset position would remain stable and positive at just over a six per cent of GDP in each of the next four financial years.

The Labour-led government does not apologise for implementing its investment programme, implementing its education, health and other social policies, designing its personal tax and company tax cut reduction programmes, all within this fiscal framework. It is a framework that includes paying-down gross Crown debt and maintaining a stable and positive net financial asset position.

And we certainly do not apologise for fervent promotion of the policies that will rebalance our economy and improve our economic security, from debt reduction to KiwiSaver and from the New Zealand Superannuation Fund to the protection of state assets. These policies are as central to New Zealand’s economic success as the major investments in infrastructure, research, and tax relief that this government will continue to make in the years to come.

And we know that these policies to provide balance in our economy are more crucial now than ever before.

Today New Zealand is facing a serious economic challenge generated by the global credit crunch and steep rises in global commodity prices. These are the most complex and challenging set of economic forces we have confronted in at least two decades.

In this environment, the Labour-led government does not agree with those who would propose that the Crown purposefully and actively engineer a weakening of the Crown’s net financial asset position.

The reality is that our national debt challenge means that irrespective of the stage of the economic and monetary policy cycle, we in our nation have structurally higher relative interest rates than our competitors. Deliberately weakening the Crown’s fiscal position would not assist, but would weaken our relative competitive position in that regard.

In this environment, we do not agree with those who would propose weakening the incentives for people to join KiwiSaver. It is exactly during difficult times like these that we need people to keep investing in their future if our new culture of workplace-based savings is going to prove sustainable. It is during these times that we must prove to KiwiSavers that their trust in the scheme will be rewarded by a government that does not back away from its responsibilities.

In this environment, we do not agree with those who would propose lowering government contributions to the New Zealand Superannuation Fund. It is exactly during these tough moments that we must prove we are serious about future-proofing our universal superannuation system. In these times we must show that we will not allow economic challenge to be used as cover to back away from our commitments to future generations.

In this environment, when the very fact that the government and the New Zealand public are taking debt reduction and savings seriously is our saving grace with international credit agencies, we cannot see how anyone can seriously propose taking their eye off efforts to reduce our national debt.

In the months ahead, the government will lay out a renewed vision for a strong, growing, and fair New Zealand economy. We will argue that our success this decade can and should be followed by even stronger growth in the years to come.

But we will also reaffirm our commitment to lowering our national debt; to keeping crown debt low; to helping all New Zealanders save for their future; and to protecting New Zealand assets. We know that this work is crucial to realising New Zealand’s true economic potential.

Thank you and I look forward to your questions.

Integrating sustainability into business decisions

beehive.govt.nz — Thu, 28 Aug 2008 09:33:25 +1200

Environment Minister Trevor Mallard's speech to Business Breakfast on sustainable design and sustainable business, hosted by Ministry for the Environment.

Good morning and welcome to this Ministry for the Environment and New Zealand Trade and Enterprise breakfast on sustainable design.

It is my great pleasure to also welcome Professor Michael Braungart to our breakfast this morning.

Welcome Michael, and thank you for taking the time to come down to Wellington to meet with us. Michael is in New Zealand, and able to speak to us today, because he is presenting at the Better by Design conference on Sustainable Design in Auckland next Tuesday.

The Better by Design Conference is a much talked about event for New Zealand export companies, and New Zealand is honoured to have speakers like Michael share their expertise with us.

We are grateful to be getting a sneak preview today of what Michael will be talking about next week – specifically the idea of a "cradle-to-cradle" approach in which an industrial society, instead of trying to minimise its environmental impact, considers how it can benefit the environment.

In New Zealand, Michael and William’s work has influenced the thinking that underpins the strategic direction of the Govt3 programme - a programme which aims to promote sustainability in government agencies by sharing knowledge and practical experience.

The programme has moved on, for example, from aiming to reduce waste to striving for zero waste using the cradle-to-cradle approach. In the sustainable buildings stream of the programme, work is now being done on the possibilities of moving beyond the concept of green buildings to considering the holistic impacts of buildings on whole urban systems.

New Zealand as a nation has made a commitment to sustainability. The government wants New Zealand to become a world leader of smart, innovative responses to environmental issues and we are working with business on how to achieve this.

The Better by Design programme and conference is a good example of how we are working to integrate sustainable thinking into existing successful programmes for the benefit of business and New Zealand.

We understand that making New Zealand sustainable is central to supporting and protecting our unique national identity.

We have a once-in-a-generation opportunity to improve our way of life, our standard of living and the state of the environment by putting sustainability at the heart of our thinking and decision-making.

Being able to bring international experts like Michael to New Zealand to help us develop a way forward is vital to our success.

Consumers worldwide are driving change in the area of sustainable products and sustainable buildings. Here in New Zealand, our government is contributing to this by using its own purchasing power to drive change through the sustainable procurement programme.

This sets standards for government procurement which include environmental and social considerations, driving change down through the supply chains.

Outside government agencies, we also have a programme to help businesses verify their environmental claims, protecting consumers from being ‘green washed’ by companies making suspect claims about their commitment to the environment.

Through the government’s Business Partnerships for Sustainability programme, the Ministry for the Environment, along with the Ministry of Economic Development and New Zealand Trade and Enterprise, are also developing programmes which enable business to develop smart and innovative responses to sustainability.

Incorporating sustainable thinking into businesses decision-making around how they design and manufacture products and services are key to New Zealand’s sustainable future and our economic future.

That's because innovative sustainable design provides companies with an opportunity to differentiate their products in increasingly competitive markets and can give them the edge over more complacent competitors who ignore the demands for eco friendly products and services.

New Zealand companies do need to maximise this opportunity to stay afloat in the global marketplace.

Being clean and green and 100 per cent pure is priceless positioning for New Zealand.

Our international image and our environment have become integral parts of our economy. International customers are starting to expect our green image to be demonstrated in how we do business.

We must work to maintain our reputation and ensure that trading on our clean and green image is backed up with real action to reduce impacts on the environment.

New Zealand has a unique opportunity. We are the right size for testing new and innovative approaches and being at the leading edge of sustainable solutions.

I hope you enjoy what Michael has to say to us this morning and that it inspires you to think differently about how we move forward in this fast-changing world.

Speech by Clayton Cosgrove to officially open Sports Alive exhibition

beehive.govt.nz — Wed, 27 Aug 2008 16:15:00 +1200

Venue: Science Alive, 382 Moorhouse Avenue, Christchurch

Time: 6.30pm, 27 August 2008

Murray Giera, Chairman of the Science Alive Trust Board; Neville Petrie, Chief Executive of Science Alive; sponsors and supporters of the Sports Alive project; staff members; special guests; ladies and gentlemen.

Good evening. It is a pleasure to be here to open the Sports Alive exhibition at Science Alive here in Christchurch. This is my first speaking engagement as Sport and Recreation Minister since flying back in from the Beijing Olympics this morning, and I must say, what a good way to start.

I believe I speak for all New Zealanders when I say that we are fiercely proud of our Olympic team. Our Olympians can hold their heads high having provided the best overall result in 20 years by bringing home three golds, one silver and five bronze medals. There were 26 top-eight placings from 9 different sports. And there were also many new personal bests, with New Zealand’s men’s cycling pursuit team breaking the four minute barrier, and our swimmers setting new, New Zealand records. These athletes are an inspiration to our nation and our place in the world as proud kiwis, and also an inspiration to get out there and get involved in sport and recreation also.

This new venture, Sports Alive, that we are here to launch tonight, is also about inspiration. One of the stated purposes of the Sports Alive exhibition is to rekindle the joy of activity through sport, and through the excitement and challenge of competition. It aims to get kiwi kids and adults more physically active by making it fun and by making people aware of the importance of doing so, for their health. It also makes us aware of the effect of different foods and exercise on our bodies.

This exhibition allows people to have a go at a wide range of sports. There are activities across 10 major sporting codes (rugby, netball, football, cricket, softball, basketball, rowing, athletics, golf and cycling) where you can take on your friends and family to see who has the best accuracy, strength, reaction time and endurance skills. The technology components within the exhibition include radar that can measure the speed and trajectory of your throws, and you can watch your own race in 3D on a big screen as you race for cycling and rowing victory.

Other exhibits show the technological developments that have occurred in sport over the decades, and skeleton and muscle exhibits demonstrate the importance of food and exercise in maintaining a healthy lifestyle.

This marriage of sport and science gives you the fun, and the facts. And if having a go at any of these activities triggers children’s or adults’ interest, there is information available on where they can join a local club.

I do not think it is possible to overstate the value of the sport and recreation sector to a nation. That is why it is great to see ventures such as this that encourage people to try out sports and to get informed about the importance of being healthy and active.

As a proud Cantabrian, it is no surprise to me that a new, innovative venture such as Sports Alive has arisen in Canterbury. Our region’s outstanding history in sport and recreation is one of the main reasons why we are all so proud to be from Canterbury.

Yet we all realise that our great sporting traditions are not enough in themselves to ensure that sport and recreation will prevail in the future. We have to be flexible and move with the times. Hence the need for these new kinds of ways to gain peoples’ interest in sport.

Anyone associated with Science Alive will have a good understanding of the power of technology in reaching young people these days. This is something that we have had to realise in the sport and recreation sector too.

For example, one of the methods that the government has adopted to get our healthy eating, active living message to young people is through a "Mission-On" website aimed at five to twelve year olds.

I must admit that it took me some time to come to terms with the idea of using a website to encourage kids to be active, and there have been other people who have been quick to criticise this concept as well. But the fact is that the Internet is an excellent way to reach young people, as it is a media that they are familiar with, are interested in and use frequently.

Young people in particular, often described as "Generation Y", are seen by some commentators as being at the forefront of a 21st century media / technological revolution, and are regular television views and Internet users. That is also why the government has invested in social marketing campaigns such as Push Play as a means of encouraging Kiwis to get fit and healthy.

The Sports Alive exhibition uses technology to convey that same message in an exciting and interactive way. This kind of hands-on approach to learning effectively engages young people's imaginations and makes learning interesting and fun. Technology is one way we can get our young people to take notice.

The fundamental movement activities that this exhibition offers provide the base for a wide range of sports. With basic skills such as catching, throwing and balance, kids are more likely to get involved in, and enjoy, sport.

The benefits of having good basic movement skills goes beyond being able to participate in sport and recreation. It helps children and young people gain confidence, which in turn promotes participation and success in other areas of life. Being physically active on a regular basis can help your performance in the classroom to the boardroom, because you are able to concentrate better and for longer.

Getting involved in a whole lot of different physical activities also teaches you how to set goals and work hard to achieve them, to celebrate your achievements and learn from your disappointments. Group activities create opportunities to develop team work skills, and how to work with different types of people and personalities.

These are all really important skills to learn if you want to be successful in life.

I would like to thank the Science Alive team for thinking outside the square in terms of encouraging kiwis to participate more in sport and recreation while learning something new along the way. At the end of the day, sport must be fun for people to get involved, and this project inspires participation on a whole new level.

I commend the huge community effort that has gone into creating the Sports Alive exhibition, and hope that Cantabrians and visitors alike enjoy what is on offer.

Ministerial statement on the Taser

beehive.govt.nz — Wed, 27 Aug 2008 15:31:56 +1200

I wish to make a Ministerial statement pursuant to Standing Order 348.

Police Commissioner Howard Broad has informed me that he has made an in-principle decision on the deployment of the Taser as an addition to the New Zealand Police graduated response model.

For some years now Police have been concerned that a gap has existed in our tactical options between the use of batons, dogs, OC spray and lethal firearms. While in most close quarter situations OC spray is highly effective in subduing a violent offender, its effective range is limited to 10 feet, and its effectiveness lessens when used to subdue a person under the influence of drugs, mentally disordered or in a "frenzied" psychological state.

Assaults on police officers by offenders with weapons have increased from 57 in 1998/99 to 88 in 2006/07. A report in 2002 endorsed the concept of a graduated use of force model and developing a database to monitor incidents and trends in behaviour. A subsequent project recommended Police consider introducing Tasers as an addition to the graduated response model.

Tasers are used by more than 930 Police agencies world-wide. I am told that the recovery time of an individual affected by use of a Taser is substantially less than that for OC spray, and that Tasers are highly effective in controlling aggressive and violent individuals under the influence of mind altering substances or in a mental health crisis.

From September 2006 Police undertook a full year-long operational trial of Tasers in the three Auckland districts and Wellington. During the trial 128 incident reports were submitted, of which 19 actually involved discharging the Taser. Weapons were present in 66 percent of incidents. The most common were cutting and stabbing instruments.

Weapons were involved in 16 of 19 incidents where Tasers were discharged. Tasers were effective in resolving 86 percent of incidents --- 71 percent using just the presentation mode without additional tactics such as laser painting, arcing or discharging.

Injuries to individuals and officers were minor despite the serious circumstances of incidents. Individuals sustained expected minor injuries with no extra medical follow-up required. Officers reported a small number of minor injuries that did not require medical attention.

Police have sought further advice since completing the evaluation. Additional information has come from jurisdictions like Britain and Canada. Canada’s experience is interesting. Tasers were introduced without the ability for effective monitoring, a lack of clarity in terms of justifications for use, and a lack of capability to capture operational data. This contrasts with the measured approach here.

Police say that the Taser's built-in recording mechanisms provide enhanced auditing opportunities, and the recent availability of cameras with the device provides even greater reassurance around deployment if complaints are made.

The Commissioner now informs me that, taking into account all the information gathered, analysed and presented as part of the trial evaluation, supplemented by personal discussions with colleagues in several overseas jurisdictions, he has made a decision in-principle to deploy the Taser as part of NZ Police's tactical options framework.

He is proposing that the Tasers currently in Police ownership are returned to the four districts for reintroduction to frontline policing. The devices will be equipped with the Taser Cam video camera and will only be available to selected frontline staff who are thoroughly trained --- a mixture of section staff and specialist tactical squad staff such as AOS members.

Tasers will not be carried on the hip of patrolling staff. They will be in secure cabinets in Police vehicles and deployed only on approval by a supervisor of substantive NCO rank or above.

In the medium term he seeks to purchase sufficient units to equip all 12 districts to the same standard as the four trial districts.

Commissioner Broad says that he is conscious of the convention around use of force being a decision for the Commissioner of Police but informed by public sentiment --- in other words, a convention of policing by consent.

That is why, before making a final decision, he would like MPs to express their views. He intends to make his decision shortly after. He also hopes MPs agree that his approach is the most appropriate one for responding to the issues of risk to the public and to police; and for continuing the tradition of having a routinely unarmed police service, a value closely held by New Zealanders.

Minister’s concluding remarks;

I wish to thank all parties who have contributed this afternoon.

The Government does not believe in the routine arming of police staff with firearms, and nor does it believe the New Zealand public does either.

The Government is concerned for the safety of police officers – the increase in assaults, particularly with weapons, is a worrying trend.

With the increased use of drugs and alcohol for example, the police are often faced with dangerous situations and need a response appropriate to that situation.

Handcuffs, batons and OC Spray have their limitations, leaving a gap between those tactical options and the use of lethal force.

Police are trained to shoot to incapacitate -accordingly the use of firearms is potentially the ultimate lethal option – what is needed is a less-than-lethal option that protects the Police, the public and the individuals concerned.

The Government is therefore supportive of Commissioner Broad’s in-principle decision on Tasers and particularly the way in which their deployment is proposed, with a high level of transparency and accountability.

Launch of Levin’s Early Years Hub

beehive.govt.nz — Thu, 28 Aug 2008 12:27:39 +1200

Speech notes for Associate Minister for Social Development and Employment Darren Hughes' address at the Launch of Levin's Early Years Hub, Horowhenua District Council, Levin

Rau rangatira maa,
tenei te mihi ki a koutou i runga i te kaupapa o te ra.
Tena koutou, tena koutou, tena koutou katoa.

It is my pleasure to be here today for the launch of Levin’s Early Years Hub. This Hub is a great example of partnership across a range of government and non-government agencies. It shows what we can do when we all work together towards a common goal.

Barnardos has long supported the welfare of children in New Zealand, and with the input from other local groups like Punahau, Plunket, Taitoko Kindergarten, the Horowhenua District Council, the Muaupoko Tribal Authority, and Te Runanga O Raukawa, children and their families in the Levin area will now be even better served.

This project has been designed to develop new ways of connecting across the early childhood services in Levin. It’s been designed to develop methods of gathering information and understanding on what Levin families need and want so they can raise happy and successful children. And it’s been designed to facilitate a whole of community approach to supporting families to access appropriate services.

The concept of Early Years Service Hubs is still a new one – we launched this programme in 2006, initially establishing seven hubs in high need areas. But we know that effective, early interventions for vulnerable families and their children have positive long term, wide ranging effects. We also know from talking with communities that services for families need to be better co-ordinated, and we need to help vulnerable families access and stay connected with the support that is available.

Early Years Hubs help to address these issues. Not only do Hubs build on existing services, like Well Child, Early Childhood Education, and SKIP (Strategies for Parents, Information for Parents), but it also makes them more effective by improving their co-ordination and helping families to access them. Early intervention, plus easy access to appropriate services, are key to improving children's health and education. It reduces the likelihood of them offending as adults or becoming unemployed long term, and it helps reduce family abuse or neglect.

Hubs work by enlisting seven core services - ante-natal; Well Child - Tamariki Ora; early childhood education (ECE); parenting information, education and support; home visiting; supported referrals to off-site services; and outreach. Plus an Early Years Service Worker is employed to work with those seven core services, providing better co-ordination of services. Terry McMinn was employed about a month ago and will serve as Levin’s Early Hub Service Worker.

But don’t forget, this is your community, and your Hub. The opportunity is there to be responsive to local needs. This government believes that services often work best when they are provided by those who understand community needs, and they work best when they are tailored for individuals and families. There has already been extensive community consultation about the establishment of the Levin Hub, but that dialogue doesn’t stop now.

Every day families will come in here, and they’ll have ideas about what they need and what they want. It will be your challenge to filter through all of those ideas and select the ones that merit attention. You have already started work on an innovative project to be funded from the Service Hubs Innovation Fund to support the work you do. You’ll be able to use that funding to respond to specific gaps in Levin’s Early Years Services.

For vulnerable families and their children, just knowing there’s a one-stop shop to get help can mean the difference between health and illness, or stress and happiness. This government knows that if we can take good care of the youngest members of our society – and if we can support the families taking care of young children – then we can make a real difference in the lives of all New Zealanders. After all, happy children means happy families means happy communities.

I wish you all the very best in the months and years to come. I am sure that Levin and the wider community is going to benefit in many ways from the establishment of this Hub.

Thank you.

Engaging with the Small Business sector - key challenges for policymakers

beehive.govt.nz — Wed, 27 Aug 2008 12:16:44 +1200

Venue: Massey University, The Museum Building, Buckle St, Wellington

Time: 12.00pm, Wednesday 27 August 2008

Professor Claire Massey, Director at theNew Zealand Centre for Small and Medium Enterprises (SME) Research; Professor Larry Rose, Pro Vice-Chancellor of the College of Business at Massey University; Professor David Smallbone from the Small Business Research Centre at Kingston University in the United Kingdom; academic staff and researchers from Massey University; special guests; ladies and gentlemen.

Good afternoon. It is a pleasure to be here today. Thank you for the invitation to open this annual research symposium at the NZ Centre for SME Research here at Massey University, and to speak with you on the topic of "Engaging with SMEs – Key challenges for policy makers."

From a “policy maker” perspective, I acknowledge that “engaging with SMEs” is one of our “key challenges”. It is equally one of our key opportunities, as this sector is the most flexible with the most growth potential.

As you will all know, SMEs make up 97% of our businesses. The other obvious fact is the sheer diversity in what they do, the way they operate, their capabilities, and their aspirations. To engage with such a diverse sector requires a good understanding of the sector - and this can be a challenge, as research into SMEs is still quite young.

That is why researchers, such as those in this room, are so important. Your work helps ensure that policy decisions are evidence-based and relevant to the sector. The importance of having reliable data and analysis is recognised in the establishment of Massey’s SME Research Centre and equivalent bodies overseas, such as the UK's Small Business Research Centre.

Today I am pleased to announce the release of this year’s edition of the annual report SMEs in New Zealand: Structure and Dynamics from the Ministry of Economic Development.

The report shows, amongst other things, that the number of SMEs increased by 2% between February 2006 and February 2007 and that the total number of people employed by SMEs increased by 18% between 2001 and 2007 to 594,410. It is great to see many small business owners are experiencing enough growth to need to take more people on. This is all further evidence of the important role SMEs play in the New Zealand economy.

This year’s report is notable because it uses a new business demography dataset, based on the recently developed prototype Longitudinal Business Frame or LBF. The LBF contains data from two main sources: the Statistics New Zealand Business Frame, which was previously used in Structure and Dynamics, and the Linked Employer-Employee Database (LEED).

The main difference between the LBF and its predecessor is that the old Business Frame shows only the most recent data on businesses, while the LBF records their attributes over time, hence the “Longitudinal” title.

The ability of the LBF to assess businesses over time has enabled a more accurate measure of the New Zealand business environment. The old Business Frame tended to include dormant enterprises, reactivations and administrative churn such as ownership change and restructuring because it only recorded the number of entries and exits into the Statistics New Zealand dataset. In contrast the LBF is better able to identify the number of businesses starting up, closing and continuing to operate. This gives us a more accurate picture of enterprise performance over time.

Another new feature of this year’s report is the inclusion of data on High Growth Enterprises. Acquiring this data has been something of a coup, as the OECD hasn’t even been able to get similar information from all its members yet. Two indicators have been used to assess whether or not an enterprise is high growth – employment and GST sales. Interestingly the results do differ, with the employment measure showing that 3.8% of enterprises are high growth and the sales measure showing that 6.5% of enterprises are high growth. These numbers indicate that this is potentially an area where further work could be done.

These are just a couple of examples of the extremely valuable material contained in this year’s Structure and Dynamics report. In order to make the most of a statistical snapshot like Structure and Dynamics, complementary research and analysis that digs into these numbers, and identifies the drivers behind them, needs to be undertaken as well. This is where you come in.

In SME research you hear a lot about categorising and typecasting SMEs into life-cycles and other such models. I want to say - and I speak as a former small business owner as well - that SMEs should not be seen just as young businesses looking to grow-up into mature businesses. Go and talk to any business person and they will not see themselves in terms of “mature” or any other such titles. SMEs are businesses in their own right, operating successful business models, without necessarily having to get bigger or smaller, or more “mature”.

We need to understand the perceptions of business owners and the impacts those perceptions have on business decisions. For example the 2007 KPMG/BusinessNZ Compliance Cost Survey respondents perceived that compliance costs were increasing in all compliance cost areas over the previous 12 months. However in most cases, on the basis of their own responses, compliance costs are remaining the same or falling. For example the Survey shows that compliance costs have fallen by a third since 2005 for firms employing five or fewer staff.

We need to know why business owners have these perceptions about compliance costs, as it can impact on their business decisions whether to, for example, invest or employ more staff. It is about understanding their motivations and perspectives, and improving interaction and communication between the government and the business sector to try and minimise the impact that these perceptions have on business decisions.

That is why organisations such as the Small Business Advisory Group (SBAG) are so important, because they provide direct communication between policy-makers and the SME sector. Since the government established SBAG in 2003, it has produced three reports. I will soon be reporting back on the latest report, and the government has already delivered on 75 percent of SBAG's recommendations in its previous reports.

Other measures introduced by the government to ensure the SME “voice” is being heard include the establishment of my portfolio, the Minister for Small Business, in 2002; the establishment of the Small and Medium Enterprises Policy Team within the Ministry of Economic Development; and the setting up of specialised small business units or groups within a range of government ministries and departments (including the Department of Labour, Inland Revenue Department, Ministry for the Environment, Statistics New Zealand and Te Puni Kokiri).

Cleary these direct links to the small business community allow the government to learn first-hand about the concerns and challenges facing this vital sector. However this needs to be backed by research to gain a full picture of how to maximise the potential that can be unlocked.

Importance of research for policy making

Research is hugely important for policy making. Research that enables policy makers to understand the key drivers behind the behaviour of New Zealand’s SMEs, would also enable those same policy makers to work out how best to communicate with SMEs. This would allow us to improve in the areas of practice that are holding back economic growth.

Obviously the potential areas for research are almost innumerable. One such possible area that has been brought to my attention is in analysing the capability of firms. Often the number of full time employees a firm has or its turnover are used as proxies for determining capability, which implies that the bigger a firm is the more capable it is. But this assumption doesn’t always apply - I can tell you that I have met some very capable small firms, and not every business strives to be bigger.

Research could be conducted into these capability differences. Is there a “capability threshold” at which an SME ceases to be an SME? From a policy perspective, research of this kind would potentially give us the opportunity to investigate designing different approaches for policies and programmes depending on where a firm sat in relation to a particular threshold. This has already been done in some other countries.

As well as assessing the capability of SMEs, research could also potentially address the aspirations of business owners. There is a common perception that NZ business owners are more interested in the “3 Bs” - the Bach, Boat, and BMW, rather than business growth. But as I said earlier, small businesses are not necessarily big businesses waiting to grow-up, they are often businesses well adapted to their local environment and market. We need to have a better understanding of what is ‘driving’ business owners, and what will help, or hinder them, going to the next level.

Ultimately we need more internationally competitive businesses operating from New Zealand, be they small, medium, or large, and we need to know what it is that will encourage business owners to take on the challenge of ‘internationalising,’ so that the government can play an appropriate role in helping them achieve that.

There are many challenges for policy makers in engaging with SMEs, and there are also great opportunities for this sector. Today provides us with a platform to identify and address some of these challenges. I wish you all the best for a successful conference.

4th Annual Securities Law Update

beehive.govt.nz — Wed, 27 Aug 2008 10:28:57 +1200

Wellington Town Hall

Good morning. Thank you for inviting me to speak to you today. I have to say, that when I looked through your programme I felt a certain sense of achievement. The topics you're discussing at this Update represent a significant amount of the work the government has been driving since first elected in 1999. I am pleased not only with the volume of work we've managed to get through, but also the quality of the improvements we've made to various regulatory frameworks. This is especially so when you consider the very low base from which we began our reforms. Not only have we been undertaking this work, we have also been looking to improve the overall quality of regulations and the regulation-making process itself.

The current economic climate may not be best light in which to fully appreciate those improvements. I know that the global credit crunch is having impacts even in our small and somewhat remote economy and that investor confidence has been badly shaken by the raft of recent finance company failures. But I'm confident the changes we have put in place and those which we are continuing to drive through, have – and will – better prepare New Zealand and New Zealanders to weather these somewhat uncertain times.

Most of you will have often heard me run through the list of our major accomplishments – we inherited a Takeovers Panel but no code for it to enforce, and thus no internationally accepted standard for protecting minority shareholders in a takeover situation. We fixed that.

We passed the Securities Markets legislation which introduced a co-regulatory framework for supervising registered exchanges. Then we introduced continuous disclosure obligations; followed by strengthened rules relating to insider trading and market manipulation; and we beefed up disclosure requirements for Investment Advisers. Now we're registering financial service providers, introducing occupational regulation for financial advisers, and adding prudential supervision of non-bank deposit takers to the role of the Reserve Bank.

There have been criticisms made of the order of work that we chose to undertake but I stand by it. We couldn't have got as far as we have without first addressing concerns in the capital markets environment. Reform of securities markets law was a vital step to ensuring New Zealand’s markets are attractive to both domestic and overseas investors, as well as cost-effective for local and international firms. In comparison to other nations New Zealand was largely lacking regulatory controls in the markets. Regulatory reform was needed to build up confidence in the markets.

I know, for instance, that without sorting out these issues first, the Securities Commission could not have done the work that resulted in the $27m settlement of insider trading proceedings, without admission of liability of course, for the shareholders of Tranzrail.

I understand that Caroline Ramsey from the Ministry of Economic Development has given you some of the history and context for the Review of Financial Products and Providers as well as outlining the future policy agenda so I won't go into that in too much detail. But I do want to emphasise that our aim from the very beginning was to take a holistic approach to reviewing the sector so we could look at the various interdependencies that exist in the industry and develop proposals that accounted for these interconnections.

I believe that this has fundamentally improved our understanding of the sector and has enabled us to develop rules that are more suited to the realities of what is a complex financial environment.

Today I want to clarify some of the detail of the legislation arising out of that review: the Financial Advisers Bill, the Financial Service Providers (Registration and Dispute Resolution) Bill and the Reserve Bank Amendment (No3). The last of these had its second reading last night and received cross party support, which is very positive. That is the Bill that brings non-bank deposit takers under the prudential supervision of the Reserve Bank, which will mean obligatory credit ratings, along with various capital adequacy requirements that are appropriate for this sector. The Financial Service Providers (Registration and Dispute Resolution) Bill provides for the registration of all financial service providers to allow for negative assurance in terms of who can register and it requires all such providers to have access to approved consumer dispute resolution services. This aspect of the law will transfer to the Minister of Consumer Affairs in line with the role she already plays with various consumer codes of practice.

The Bill I want to spend my time on today is the Financial Advisers Bill largely because recent debates around it have generated a lot more heat than light. The Finance & Expenditure Select Committee’s second interim report unfortunately does not contain a lot of detail, so I have decided to use today’s address to put some flesh on the bones by discussing the government’s view of the way forward.

I am aware now that at least two of the professional bodies who represent financial advisers, and who had had aspirations of being an Approved Professional Body under the original co-regulatory regime, want the process to slow down now that major changes have been proposed to the Bill. I don’t believe we should slow down. If we can get the Bill through before the election, we should and I will explain why. What little confidence remains in financial advisers and in finance companies diminishes further with each announcement of failure. Everything we do is too late for those who have already lost money, but the longer it takes for the law to pass, the greater the timetable for implementation and the longer the wait for confidence to be restored to the sector.

When we decided that we would shift from a co-regulatory model to the single oversight of the Securities Commission, we essentially knocked two years off the implementation date – 2012 to 2010.

The investing public has no idea why these things take such a long time, but as you would have heard from Caroline, there is a considerable amount of consultation and testing of views that needs to occur before new regulatory frameworks are put in place.

And the Act is only the first step, which is why I want it in place, so the detailed work can be begun by the Securities Commission. I noticed someone saying recently that there was nothing to stop the Securities Commission having some input into the form and structure of the new model without the law being passed, whereas I am sure everyone here knows the Securities Commission cannot do anything until it has a legal mandate to do so. It cannot set up the working groups with industry representatives to start devising the process for developing codes of conduct and requirements for authorisation until the Act is passed. And that is why I think we should pass it if we can. Officials can then make good use of the election campaign 'down time' to consult with industry on the practicalities and the all-important detail. I don’t think we should waste up to 6 months if we can avoid it.

I think that it is worth remembering that for every call for restraint from the sector there are dozens of investor voices clamouring for changes to be made – and the sooner the better. I heard one representative of one of the finance advisory bodies suggest that the client wasn’t interested in the regulation of financial advisers – I think I should re-direct my mail to him, because for every one of those who knows the legal framework isn’t there are dozens who thought it was.

I won’t traverse the ground that Caroline has covered, but as I said before the Bill as it was introduced proposed a co-regulatory model for the regulation of financial advisers, where industry-based approved professional bodies would work with the Securities Commission to regulate financial advisers.

This was designed to ensure effective regulation of advisers, while recognising and drawing off the vast knowledge and expertise that exists in the market.

It became very clear to me late last year that such a model would not work in practice. However, it wasn’t until April that the Select Committee agreed to consult publicly on a model in which the Securities Commission would be the central supervisor. The loss of industry expertise in this model was a concern to me and so a number of proposals have been put forward to ensure that industry continues to be involved.

The proposal now is to establish a Commissioner of Financial Advisers who would be a member of the Securities Commission. The Commissioner would work with industry to develop a code of conduct and to establish appropriate disciplinary processes. I am confident that this approach will ensure that we have the strength of central supervision and the experience and knowledge of industry participants.

The industry has made it clear through the submission process that it wants consideration given to the complexity of the product on offer and the risk involved to the investor. It is clear that the risk associated with the range of financial advice in the industry differs. The proposed tiered approach to regulation of financial advisers will mean the obligations on advisers will be tailored to the risks associated with the financial advice given.

Consumers are fairly easily able to switch between simple securities such as insurance products, credit products or bank terms deposits without incurring significant losses. Problems are more likely to arise with more complex securities or investment and savings planning and for that reason the Select Committee is now proposing that anyone giving financial advice on such products (which will be Category 1 products) – whether they are working independently or are employed by a financial service provider – will need to be individually authorised by the Securities Commission.

This will ensure that these people have the level of expertise and knowledge, as well as accountability, necessary for advising on investments which may require consumers to put on the on the line large sums of their hard earned cash or which could affect their future savings.

The Securities Commission will also be given the power to certify financial institutions which meet the standards established by the Commission in consultation with the industry. Certified Financial Institutions would then be responsible for financial advice offered by their staff on simple products.

This is intended to cover bank tellers and insurance sales staff and agents, who are selling basic products offered by the bank, insurance company, credit union or other financial institution and where the advice given poses low risk to the consumer.

Under these proposals authorised financial advisers (selling complex Category 1 products) employed by a Certified Financial Institution would still have to meet their individual obligations, as they would have to be individually authorised by the Commission. This means a level playing field from the consumers’ perspective.

By adopting a tiered approach to the obligations for financial advisers, narrowing the application of the Bill, and allowing for institutional certification we will have ensured that the regulation is effectively targeted where the mischief in the financial advisory industry exists.

Hindsight is a marvellous thing and, while I wish I had been alert to the need to pull back from the co-regulatory framework we approved at the beginning of 2006, several months before the first of the finance company failures began and nearly 18 months before the Bridgecorp failure, I don't believe it would have made any difference.

In every speech I have given on this subject I have emphasised the crucial importance of lifting financial literacy across New Zealand.

Disclosure means little if you don't know what the point of comparison is – for example how do you know your adviser is potentially influenced by the amount of commission, if you don't know what he or she would receive for another product? How do you know that a B credit rating by some rating agencies represents junk, when Cs were good enough to pass your school certificate? How do you know that a product is under-priced when you don't know the level of risk you are taking with your hard-earned money?

One of the frustrating aspects of being the Minister of Commerce when there is a series of collapses such as the one we are experiencing, is trying to explain that inexperienced investors going in, will be equally inexperienced going out.

The regulation of financial advisers is one part of the solution, but it is not the only part. The other parts are education, education and education. Financial advisers already have a number of professional bodies they can join. All of them focus on ethics, standards, qualifications and experience; most have disciplinary processes to hold their members accountable. Some have such a high entry bar that the threat of being struck off is enough. While there is currently no legal requirement for financial advisers to be authorised, inexperienced investors should only take advice from someone who is a member of such a body.

We must remain focused on lifting New Zealand's level of financial literacy. While we may have made some progress in the realm of financial education, both the ANZ-Retirement Commission Financial Knowledge Survey in 2006, and the Reserve Bank’s survey on the understanding of financial information in 2007 found that the level of financial literacy in New Zealand still falls well short of where it should be.

As many of you will know the government has launched a financial literacy campaign spearheaded by the Retirement Commissioner, who has finalised a National Strategy for Financial Literacy. The strategy recognises that there are many public and private sector players in this important space contributing to these shared objectives.

They range from schools that deliver on the curriculum, which as you know has been modernised and updated to ensure that financial literacy is addressed, through to the NZ Enterprise Trust taking real business experiences into the school environment, through to the Securities Commission teaching the basics of risk and return to any age group – just to name a few.

So in conclusion, the legislation is being put in place and there is considerable effort being taken by a wide range of groups to improve the country’s levels of financial literacy, but it will take some time for confidence to be restored.

On that note, thank you for the opportunity to say a few words and I would be happy to address any questions you may have.

Privacy Issues Forum

beehive.govt.nz — Wed, 27 Aug 2008 10:04:03 +1200

Privacy Commissioner, Marie Shroff, thank you for inviting me to open today’s forum. May also acknowledge Sir Geoffrey Palmer, head of the Law Commission, and Professor John Burrows, the law professor I studied under at Canterbury University.

I looked back over my speech notes from the last time I opened a privacy issues forum, which was in 2003. There are things that have changed in the five years since I gave that address – Marie Shroff has taken over from Bruce Slane as Privacy Commissioner. There is a substantial review of privacy being undertaken by the Law Commission, whereas when I last spoke on the subject, the Law Commission was analysing the results of submissions it had received in response to a somewhat less detailed discussion paper that had been issued the year before and, of course, Sir Geoffrey has replaced Justice Robertson as the head of the Law Commission.

The opening address that day was given by Justice Michael Kirby, which I recall being particularly thought-provoking, touching as it did on the massive data-banks held by airlines and justifying the degree of scrutiny officials place on passenger lists by our respective countries’ decision not to require everyone to carry an identity card.

The point in common between the two forums is that I remain committed to introducing the Privacy (Cross-border Information) Amendment Bill. The only difference this time is that I have actually introduced a Bill, whereas in 2003 it was an aspiration. It is set down for a first reading and has the agreement of support parties for referral to a select committee. The Bill addresses two deficits in the Privacy Act, which does not currently allow foreign nationals resident overseas to make information privacy requests, and does nothing to prevent data received from overseas being transferred outside New Zealand to a jurisdiction without adequate privacy protection.

The 2003 Forum had many eminent speakers as does today’s forum. All of the speakers today have made sizable contributions to the various debates on privacy issues, so I anticipate that the discussion will be both thought-provoking and lively. I am including my sister Kathryn in this description because she is highly regarded in the privacy field, but also to ensure that she doesn’t get the chance to imply that I am her mother, which I am told is what she does when I am not present.

My interest in privacy legislation dates back to the passage of the Privacy Act 1993, when as a member of the Justice & Law Reform Select Committee, I gained an important insight into not only the range of academic views on the subject, but also the range of public opinion that continues to exist today. The history of New Zealand’s legislation lies in part in the desire to be consistent with the OECD Guidelines, but we should not forget - the broader concept of privacy dates back to the Universal Declaration of Human Rights. And as a human right, it has never been more important than it is today with technology making personal information more accessible. It was no accident that a Bill that began its passage through Parliament as the Privacy of Information Bill became the Privacy Act.

The theme of the Forum this year is “Privacy is your business” which has two meanings.

First of all, privacy matters to individuals. We are now at the point where the collection, use, storage, and disclosure of personal information can occur unnoticed, across borders, and at phenomenal speeds. Privacy is in that sense, very much, your business.

Second, privacy matters to business. Major advances in technology have changed the way in which personal data is collected, stored, and used. The challenge for business is to ensure the benefits obtained through the use of new technology do not compromise individuals’ expectations about the security of and use of their personal information. It isn’t a case of one or the other. Business efficiency and information management processes that respect individuals’ privacy expectations go hand-in-hand.

A business that cannot assure its customers that their privacy will be respected will lose customers to competitors. Here, the degree of trust customers have in the businesses they deal with is paramount.

Let me use the example of the sign that appeared on the airline counters after the current law was first passed. It indicated that the airline would not give out information about passengers due to the Privacy Act 1993. My view was that the notice should have said: ‘Because we value our passengers’ right to privacy, we do not give out information about our passengers to anyone without their permission.’ Advising customers that they had always followed this practice, even before the law change, would have been more honest as well.

I would like to talk more about this issue of trust, and its importance in maintaining an ongoing relationship between a business and its current (and potential) customers.

Before the information technology boom, collection and disclosure of personal information was far more limited. Most personal information was stored manually and it wasn’t easy to copy or disseminate written information. A lot more personal information had to be obtained from individuals themselves and that’s where trust came into play. Things have changed. The ability to print, photocopy, photograph, videotape, record, collect and analyse biometric information, and so on, means there is no longer a serious barrier to the collection or distribution of personal information. Nor does much of it have to be obtained from the individual concerned.

Increasing use of technology has reduced the personal association between the business collecting the personal information and the individual whose privacy is at stake. Individuals may be perceived, in a millisecond, as “information” in an email, on a disk, or on a webpage. Participants to a transaction may be on the other side of the world from each other. This relative weakening of social relationships weakens the interpersonal regulation of the transfer of personal information.

In an environment where masses of personal data can be disclosed to large numbers of people at the click of a mouse, trust has become more important than ever.

Individuals need to trust that the businesses they deal with will respect their personal information and protect their privacy. But this trust needs to be earned and re-earned. A business that breaches a customer’s privacy may not get a second chance. There have been a number of recent examples of privacy breaches that are likely to lead directly to a loss of trust. There was the ticketing company which sent an e-mail to everyone on its mailing list without blocking the display of individual email addresses. And there was the university whose computer “glitch” enabled students to access other student’s academic records. The same fault could affect any business that enables customers to access accounts online with disastrous effects on client confidence.

We can’t go back to the days where personal information was disclosed only within trusting interpersonal relationships. Few would want to sacrifice the amazing developments in communications technologies to do so. What businesses need to continue to do is adapt.

One way in which businesses can do so is to develop proxies for trusting relationships “at a distance”. As the Privacy Commissioner has said before, good privacy is good business. And businesses that are not trusted are not good long- term prospects.

Development of transparent privacy policies that comply with the Privacy Act and best practise will help businesses gain the level of trust needed to attract and retain customers. Secure websites and data storage, complaints procedures, monitoring, staff training, corporate responsibility, and accurate, up to date and honest information for consumers will enhance that trust. Businesses can help themselves by developing top-down privacy-conscious cultures.

The government has a role in enhancing trust too. The Privacy Commissioner's role in promoting privacy awareness is pivotal. With increasingly complex new technologies, New Zealanders need a legitimate source of information about risks to their personal privacy and how to respond to those risks. I applaud the Commissioner’s proactive approach in this area and note in particular her focus on educating the young. We can learn from our technologically-savvy young people and I look forward to seeing the video of the winning entrant to the secondary schools video competition for Privacy Awareness Week.

These forums are also an important part of Privacy Awareness Week, because they give us the chance to dissect important issues that are not only a challenge in New Zealand but which challenge other jurisdictions as well.

I have noted that this afternoon’s session will include discussion on information disclosures between agencies. This is a vital area of concern for the government. It is not yet entirely clear what people’s understandings and expectations of inter-agency information sharing are. We all seem to know when information should have been shared, but that tragically is usually immediately after something has gone terribly wrong and it would appear with the benefit of hindsight that information held by one agency should have been shared with another.

I welcome the discussion this afternoon and encourage you all to think seriously about what is an incredibly important issue.

I conclude with a comment about trusting relationships “at a distance”.

I said earlier that trusting interpersonal relationships are no longer the primary enabler of personal information transfer; technology is. Modern privacy law either ensures the individual retains some degree of control over the transfer or approximates a trusting interpersonal relationship – an honest broker as it were.

As technologies continue to evolve and individuals become more burdened by more complex privacy waivers, drivers to eliminate individuals from the information transfer equation will increase. This will mean the primary challenge for law reformers will be to design options such as privacy policies, privacy responsibility plans, privacy standards and technology design standards that can intervene to approximate trusting interpersonal relationships.

I hope you all enjoy an interesting and productive day at today’s Privacy Issues Forum and on that note I declare the forum open.