Standards and Conformance Bill

Hon Dr NICK SMITH (National—Nelson) Link to this

During the second reading of the bill I raised some quite serious concerns about the mess we have within the New Zealand building industry. In particular, I drew attention to the fiasco we have, whereby the standards committee is saying there is one set of rules and the Department of Building and Housing is saying there is another. I also drew the attention of the House to the view of certified builders that this level of confusion is unprecedented. We have had the whole debacle of leaky homes for over 4 years now, and it is still not clear for builders and for designers as to what the standards for building houses are.

My point in respect of this bill is that Standards New Zealand was created in the aftermath of the Napier earthquake quite specifically to deal with the issue of building standards. It is an organisation that has actually done a very good job over a very long time. I think some of the changes that the last Labour Government made in 1988, at the height of Rogernomics, were actually counter-productive to Standards New Zealand.

PANSY WONG (National) Link to this

I am actually surprised, because the Minister in the chair, the Hon Lianne Dalziel, is well known for being upfront in taking calls. She is about the only Minister on the Labour front bench who is prepared to answer questions, and I think that the two questions posed by my colleague the Hon Nick Smith are very good ones. I am concerned about the fact that in June two members of the Standards Committee were sacked, simply because they voted against lowering the standard for building materials. My concern extends, then, to what would happen to the Auditor-General, who actually raised the issue that the Labour Party used taxpayers’ money illegally in the election campaign. I am coming back to the bill, but there is a concern, if appointed members of a committee get sacked, simply because they want to maintain a higher standard, about who then is left to hold the Government to account.

I also want to pose some more questions relating to Part 1. This part increases the functions of the Standards Council to include the development of standards that promote social responsibility. The term “social responsibility” is very subjective, and I have a horrible vision of our officials from the Ministry of Economic Development holding hands with international delegates and conducting strategic conversations in order to develop a social responsibility standard.

I have suddenly found, in the last financial review of the Ministry of Economic Development, that there is a buzzword and a communication strategy that apparently each Government department is conducting—that is, not just a conversation but a strategic conversation. I was very interested in this, and I asked the officials what “strategic conversation” means. It is a term that is actually contained in the objectives of a Government department’s mission statement. Apparently, the Ministry of Social Development states in regard to “strategic conversation”: “A less technically sophisticated evaluation that can add more to the strategic conversation is of more value than a technically sophisticated evaluation whose results may distract from ensuring the most strategic use of resources.”

I ask my colleagues whether any of them understands that statement. I thought that another Government department might be able to enlighten me as to this term “strategic conversation”. The Ministry of Economic Development states: “Our attention has turned to improving the quality of strategic thinking and conversation. As part of this we have put more focus on synthesising research to distil the implications for our strategy.” I ask my good colleagues on my side of the Chamber whether any of them is any the wiser about the term strategic conversation.

We are going to elevate strategic conversation to an international level in order to develop standards that will promote social responsibility. I would like the Minister to take a call and say how much more compliance implication that would impose on business, or on anybody trying to adhere to, or develop, eventually, a social responsibility standard. The Minister is the one who claimed sometime in June that she was conducting a dynamic review on the compliance burden, particularly horizontal, vertical, strategic—who knows? She is doing this particularly for small-business people, and I want to know what the implication of these new objectives will be for the Standards Council. What sort of a standard will be developed to promote this so-called social responsibility issue?

KATE WILKINSON (National) Link to this

One may be forgiven for giving this bill a somewhat cursory glance and thinking that, yes, it is combining the functions of two bodies, that sounds OK. It is combining the Standards Council and the Testing Laboratory Registration Council and is intended to align the functions of both with international standards. That sounds great, it should therefore save some costs. It should be a good bill. However, there is a big “but”.

I divert for a minute to mention something that has not been mentioned in the commentary on the bill. It seems to be international practice these days that only one body in any country has the function of registering certification bodies, and that is fine. In New Zealand it is this great thing called theJoint Accreditation System of Australia and New Zealand. Whilst it is possibly not technically within the scope of this bill, I do raise the issue of whether New Zealand is losing its sovereignty to this joint body. How answerable is the joint body to New Zealand courts? I would like the Minister in the chair, Lianne Dalziel, to address that issue, because I think it is one that is hugely fundamental to our constitutional law. As an international regulator, how many local controls would it need to comply with? Decisions about using world guidelines for standards will not be made by New Zealand, at all but by this joint body, on which we have two representatives.

The other question I would like the Minister to answer is how Parliament, if it so wanted, could actually modify the rules of this joint agency. Does it in fact have the power to do so? I think we are at very real risk of ceding our sovereignty to this joint trans-Tasman agency, and I take that as a very, very serious constitutional issue.

Leaving aside that wider issue—because it might be too intellectual for the other side—and coming back to the bill, I point out that the popular rhetoric seems to be about reducing compliance costs and making it easier for businesses to do business. So it would seem obvious that some analysis of those consequential compliance costs might have been completed before launching into this bill. What are the fiscal implications of the bill? We are told that the implications of this bill are “just too difficult to assess”. I would have to say that for all the talk and rhetoric about social responsibility, this bill has every chance of being yet another irresponsible bill with yet more unintended consequences. There has been no disclosure.

In fact, there is no idea of what the compliance costs resulting from this bill will actually be. The compliance cost statement in relation to the bill even identifies that compliance costs will be incurred because of these two accreditation bodies being reduced to one. But as there may be some confusion in the market because of these changes, “It is not possible to quantify the size of the compliance costs.” and we are expected just to accept that. Well, I do not think so.

I said before that this could have been a good bill. It is important that other countries have confidence in our system, for the accreditation of those certification bodies. We place a heavy reliance on our trade exports, and wishy-washy, unreliable, and inconsistent standards are certainly to be avoided. But this potentially good bill has been spoilt by the Government sneaking in a couple of new objectives of the Standards Council.

Just to go back in time, I tell members that under the existing Standards Act, the primary functions of the council—which are quite sensible—are to develop standards, to promote, encourage, and facilitate the use of standards in New Zealand, and to improve the quality of goods or services, having regard to economy in their production or supply. We cannot argue with that. They are also to promote standardisation in industry, trade, or commerce—we cannot argue with that—and to encourage and facilitate industrial development, trade, or commerce, which we cannot argue with, either, or to promote public or occupational safety, health, or welfare. That all makes some sense, because at the end of the day we must acknowledge the importance of objective standards, and standardisation of standards, with our trans-Tasman neighbour, Australia. Nobody wants to compromise those standards, but this bill just had to go that sneaky bit further.

STEVE CHADWICK (Labour—Rotorua) Link to this

I move, That the question be now put.

CHRIS TREMAIN (National—Napier) Link to this

I rise to speak to the Standards and Conformance Bill, and to bring to the Minister’s attention, for starters—I am sure she is well aware of the Ministry of Economic Development’s website—the Government’s objectives for conformance and standards. I will not ask her to recite them off pat, because that would be unfair, of course, but I will remind her of what those objectives are. I will read through them. First and foremost is facilitating domestic and international trade. Second is minimising risks to health, safety, and the environment. The third is facilitating innovation and economic development as part of the economic transformation equation that our Prime Minister is banging the table about at the moment, while we are still going backwards on economic growth. The fourth is reducing compliance costs. That is what it says there; it is all about reducing compliance costs.

So I imagine that is why the Minister is planning a trip in February of 2007 to the ISO Working Group on Social Responsibility, which will take place in February 2007 in Sydney, Australia. I ask the Minister whether she will be attending that conference. I do not think she is sure about that.

Hon CHRIS CARTER (Minister of Conservation) Link to this

I move, That the question be now put.

SANDRA GOUDIE (National—Coromandel) Link to this

I appreciate the opportunity to have some input into this debate. I am particularly concerned when I look at this bill; I am really delighted that my colleagues, and National, are opposing it. I think that it is quite scary when we see Labour making such amendments in legislation. When we look at Part 1, “clause 7: “Functions of council”, we see that subclause (4) states: “Section 10(2)(h) of the principal act is amended by inserting, after the word “standards”, the words “and other specifications”. To me, that is broad in the extreme. What does “and other specifications” really say about what we can expect in the future?

I am mindful of a recent press release about cars. If one also takes into account environmental and social responsibility, where will the emphasis be? If we look at the latest press release about small cars being death traps, we see that it says that smaller vehicles are built as economically as possible, and the biggest economy is attached to safety features. So yes, small vehicles have a saving in terms of fuel consumption, but safety features are sacrificed as a consequence. So will we support small vehicles because they seem to be more environmentally friendly, or will we oppose small vehicles because they have a much greater personal risk to people’s health and safety? The article goes on to say that there are a lot of problems in providing adequate performance protection. If specifications or standards are being set, which one will take precedence—the environment or people’s safety? Who will weigh up those sorts of issues when it comes to setting standards or, indeed, specifications? Here, “specifications” are a pretty broad brush and can be applied to just about anything.

When I was listening to my colleague Mr Chris Tremain earlier, I was very impressed with his presentation, and with his reacquainting us with the intention of standards—that is, to facilitate domestic and international trade. I would say that the Government has failed miserably in that regard, when one thinks about honey imports and the standards it applies there. The Government is putting our whole agricultural and horticultural sector at risk because those standards are not robust. The Government acknowledges that they are not, yet it has taken that on board and still made the decision to allow honey to be imported into New Zealand that is not heated to its optimum in order to ensure we do not have diseases coming into this country and putting the rest of our horticultural and agricultural sectors at risk.

This bill was supposed to enhance public confidence in the setting of standards, but in no way does it do that. What else does this bill say? Clause 7(5) states: “Section 10(2)(i) of the principal Act is amended by adding the words ‘or that the Minister may direct it to perform in accordance with section 112 of the Crown Entities Act 2004’.” What does section 112 state? It states: “If an Act, or a Crown entity company’s constitution, gives the responsible Minister power to add to the functions of a Crown entity, the Minister may direct the entity to perform any additional function that is so added and that is consistent with the entity’s objectives.” This bill now gives the Minister the power to direct it to perform any other functions that the Minister deems acceptable, and, again, that could be broad in the extreme. I have absolutely no faith in this Government, particularly with its record around fiscal responsibility and, indeed, around compliance costs.

I think two of the most telling submissions were from Telarc and from Health and Disability Auditing New Zealand Ltd. Both made very clear submissions, and, in fact, did the work for this Government of identifying what the compliance costs would be. What did this Government do? It completely ignored the content of those submissions around compliance costs. It completely dismissed those concerns that were raised. Health and Disability Auditing New Zealand Ltd made it quite clear by setting out graphs and identifying all the figures. It was going to cost that company $155,000, compared to $18,000. I think that is absolutely abominable. I can believe that this Government would be so ignorant of the effect of the introduction of this bill on other entities. Telarc itself also goes on to outline some of the costs in its submission.

TIM BARNETT (Labour—Christchurch Central) Link to this

I move, That the question be now put.

The CHAIRPERSON (Hon Clem Simich) Link to this

This part includes debate on the schedule.

Hon Dr NICK SMITH (National—Nelson) Link to this

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.

PANSY WONG (National) Link to this

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?

SANDRA GOUDIE (National—Coromandel) Link to this

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—

NICKY WAGNER (National) Link to this

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.