Hon GERRY BROWNLEE (Leader of the House) Link to this
I seek leave to move a motion, notice of which was lodged this morning, relating to the adoption of the changes to the Standing Orders recommended by the Standing Orders Committee for the registration of members’ pecuniary interests.
Mr DEPUTY SPEAKER Link to this
Leave is sought for that purpose. Is there any objection? There is no objection.
Hon GERRY BROWNLEE Link to this
I move, That Chapters 3 and 8 and Appendix B of the Standing Orders be read as if amended in the manner set out in Appendix 1 of the report of the Standing Orders Committee on the Review of Standing Orders relating to pecuniary interests (I.18A), with effect from 1 January 2011. The Standing Orders Committee has reviewed the Standing Orders relating to the pecuniary interests of members of Parliament and has recommended a number of changes to these provisions. The motion adopts the committee’s recommendations by way of a sessional order, with effect for the round of annual returns due in February next year.
The referral of this review followed a unanimous recommendation of the Privileges Committee in September 2008. The Standing Orders Committee heard evidence from Dame Margaret Bazley, Registrar of Pecuniary Interests of Members of Parliament, who made a number of suggestions for improving and clarifying the requirements for the declaration of pecuniary interests. After presenting her submission, Dame Margaret was appointed to advise the committee on the review. The committee also heard from Lyn Provost, Controller and Auditor-General.
The register is a public record of specified financial and other interests that are personal to each member. It provides information of any interest or other material benefit that a member holds or may receive that might reasonably be thought by others to influence his or her actions as a member of Parliament. The purpose of the register is to strengthen public trust and confidence in the parliamentary process by improving transparency, openness, and accountability. The Privileges Committee’s report emphasised such principles, and the Standing Orders Committee’s recommendations incorporate them more fully in the House’s rules.
Some new requirements have been recommended—for example, members will now be required to declare an interest in trusts of which they are trustees without having a beneficial interest. Members must also declare a beneficial interest in a trust regardless of whether it is a fixed or discretionary interest. Recommendations also clarify requirements for the declaration of real property and paid activities. The committee’s recommendations mean that some additional areas of interest may be declared that are not strictly of pecuniary or financial benefit to members. For this reason, the committee has proposed that the name of the register be amended to “Register of Pecuniary and Other Specified Interests”.
A significant new development is the introduction of a new procedure for members to request that the registrar conduct an inquiry into a member’s compliance with the obligations to make returns. On receiving a request, the registrar will then consider whether to conduct such an inquiry. This means that the Speaker will no longer be involved in the consideration of such matters. After conducting an inquiry, the registrar will have the ability to report to the House that a question of privilege is involved, but that outcome would result from only the most serious situations. In many cases, matters may be resolved through the correction of returns. That is a course not currently available to the Speaker when considering matters of privilege.
The registrar’s new inquiry role replaces that previously accorded to the Auditor-General. It is worth noting that the Auditor-General never exercised that function as there were doubts about whether there was sufficient statutory power to do so. However, the Auditor-General will support the registrar when required.
In recommending this new procedure, the Standing Orders Committee was concerned to prevent its use for the making of frivolous or vexatious requests for inquiries into members’ interests. A member wishing to make a request must have reasonable grounds to do so. A member who makes a request without those reasonable grounds will risk being held in contempt of the House.
The sessional order will have effect for the 2011 returns. In the light of experience from the returns process the Standing Orders Committee will consider how these recommendations should be adopted as permanent amendments to the Standing Orders.
In addition to those notes, I point out that the process of members recording their pecuniary interests has been in place for just a few years. I think it is fair to say that some members, in fact a large number of members, have been overly cautious about what they put in there to the point that we now get registers of “interest” as opposed to necessarily “pecuniary interests”. So in many ways the changes codify what has become a practice for members anyway. It is fair to say that most members have erred on the side of caution when making their returns to the extent that some members appear to have interests far in excess of the actual benefit that may come from them, simply because they felt that some association with an organisation, real property, or any range of other financial instruments might somehow be required to be recorded under the provisions. This arrangement effectively confirms that, so that there can be no doubt in the public’s eyes about who has what interest and where.
The registrar’s right to inquire is good, because in most of these cases MPs will have made just simple omissions without any desire to hide stuff. I suggest that if any large pecuniary interest was being concealed, or if there was even a hint of that, New Zealand is a small enough country for people to know about it and for that matter to make its way into the system, and for there to be considerable concern expressed about that. But there will be cases where people do not declare things simply because they do not know about them. A case could be, perhaps, of a defunct insurance company that had small residuals left over. People may not even remember owning a particular policy, but at some later point they are contacted by an investigating organisation to see whether they are the person named on that policy and then a small payment is made out to them. That policy may not have been declared in the register but it was not deliberately concealed. That is the sort of thing that can be very easily sorted out by the registrar. But if it is a bigger matter, then the Auditor-General stands by to assist in that process, and ultimately everything comes back to the House for the Privileges Committee to deal with. I do not want to make any further comments.
I believe that it is a positive move for the House to adopt this sessional order.
Hon TREVOR MALLARD (Labour—Hutt South) Link to this
I rise to support the Leader of the House on this particular change to the sessional order, which will effectively be a change to the Standing Orders on matters relating to the pecuniary and other interests of members. It is fair to say that over time we have made some progress in this area. I think there is an ongoing debate but generally members are favouring transparency more and more in order to avoid doubt. The exercise that we are undertaking here will take some reasonable steps in that regard, although it will still not be as clear as some of us would prefer. But it is certainly a step in the right direction.
As well as the points made by the previous speaker, the Hon Gerry Brownlee, I would like to emphasise the point on timing. One of the problems with the declarations at the moment is that if people perform an activity and are not paid in the same year, it could be up to 18 months after the activity is performed, well beyond a general election, well beyond the period of conflict, before it becomes apparent, and this change helps with that. The area where there will be some debate and unhappiness with members is the arrangement with trusts—at both ends of it. It is fair to say that agreement is not unanimous on the question of people who are trustees of trusts in which they do not have beneficial interest. In some cases, they would be people who are lawyers who, as part of their previous business, became trustees. This will require a decision on the part of those members of Parliament, who might, for example, be trustees for family trusts for more distant parts of their family where there is no question of being beneficiaries. People will have to make a choice as to whether they are open and transparent about their role in those family trusts or previous professional trusts, or whether they resign as a trustee, as a number of us have done in the past with directorships and other arrangements. I think that is fair.
The other area around trusts will be known to some on this side of the House as the “Bill English clause”. The decision is to take a wider view of beneficial interest, so we will take into account not only those who have a fixed beneficial interest but those who have discretionary interests. In the case of the English trust arrangements, we saw changes in those arrangements that took the Minister of Finance from being a fixed beneficiary to being a discretionary beneficiary, when, in fact, the actual position did not change at all. It is important, and, as well as thanking the Privileges Committee of the previous Parliament for referring it, I think we should probably thank Mr English for the work he has done to help us clarify our rules in that particular area.
There is a clear warning to be given to members on the question of vexatious complaints. There is an expectation that members will not complain vexatiously on this question, and that is important to make sure that the system has integrity and we do not put the Registrar of Pecuniary Interests of Members of Parliament in a position where she gets caught up in what is essentially a political argument. It is probably inevitable if there is a real complaint that it is political, but it should not be an unnecessary political argument or too frequent. The punishment for members who make vexatious complaints is that they are themselves treated as in contempt and, therefore, a breach of Parliament, and that should serve as a warning to people to take this process seriously.
I thank all members who served on the Privileges Committee. It is fair to say that there was almost no politics in this, that different views came from different sides of the House, and that members added their various experiences in order to get something that is, I think, about as good as would be acceptable to the House at this time.
Dr KENNEDY GRAHAM (Green) Link to this
I rise to address this report from the Standing Orders Committee on the pecuniary interests of members. The report reflects a considerable body of work, I think, on a very important subject. I have followed through this issue in the Standing Orders Committee and have been actively engaged in it in recent months. Like the preceding speaker, Trevor Mallard, I thank colleagues for what has been a fairly cooperative exercise within the committee.
I am satisfied that the committee has returned a useful report. We shall be supporting adoption of the report and the changes to the Standing Orders that the report recommends. It is worth recalling that the review emerged from a recognition by the 48th Parliament that a particular affair in 2008 had caused public concern, and had, perhaps, eroded confidence in this nation’s legislature. The previous Speaker had requested the Privileges Committee to examine the rules surrounding the financial interests of members, and to make recommendations to ensure that the House was “not brought into disrepute” and impeded in its functions. Although I agree with Mr Mallard that the Standing Orders Committee succeeded—and rightly so—in keeping the review depoliticised, I think it is important to recall that it was highly sensitive political issues that provided the genesis for this whole exercise—namely, the Owen Glenn affair in 2008 that involved the leader of New Zealand First, the Rt Hon Winston Peters.
I recall the report of the Privileges Committee, which stated: “We recommend by majority that the Rt Hon Winston Peters”—I repeat, the Rt Hon—“be censured by the House for knowingly”—I repeat, knowingly—“providing false or misleading information on a return of pecuniary interests. We recommend by majority that the Rt Hon Winston Peters be ordered to file, within seven days of the House so ordering, amended returns for the years ended 31 January 2006, 2007, and 2008 covering any gifts, debts, or payments in kind that he has not previously registered.” So it is a reminder of the degree of sensitivity that prevails around this thing—this same gentleman is now struggling below the watery surfaces of public opinion to re-enter this House—to ensure that the House is no longer brought into disrepute. Let us continue in hope.
For its part, the Privileges Committee believes that the Standing Orders Committee of the 49th Parliament has reviewed the rules for the declaration of pecuniary interests; this is what we have been doing, and this is the fruit of our endeavours. We considered, of course, the purpose of the Register of Pecuniary Interests of Members of Parliament and found it to be sound. We went through a gamut of issues, which have been touched on by Minister Brownlee and Mr Mallard, such as beneficial interests in trusts, the issue of real property, the issue of interest rates, legal fees paid on behalf of members if they are involved in litigation pertaining to their parliamentary activities, airline upgrades, and other things. We in the Green Party are happy with the outcomes of all those issues.
But in my opinion the most important development coming out of the report is the agreement we have reached concerning the scope of what we mean by “pecuniary interests”, and Minister Brownlee touched on that. In short, there is a need to broaden the scope beyond the strict meaning of the word “pecuniary”; I think that was fairly clear. We discussed the possibility of omitting the word “pecuniary” entirely from the name of the register and just having it as “register of interests”, but it was very clear that that would go way too far for the purposes of the House. We would end up being obliged to declare whether we were influenced in any way by the Church of Scientology, the Climate Science Coalition, the doctrine of creationism, or maybe the Flat Earth Society. It would have been ridiculous. So I think it was the correct balance to make it explicit that members are required to declare some interests that may not be pecuniary or financial to them, but that are limited to certain specified interests. I think we got to the right conclusion.
I do not want to go into any more detail on the provisions of the report, but I will make three broad points before I conclude. The first is that the Privileges Committee expressed a number of principles that support the approach of transparency. I think the Standing Orders Committee endorsed that, and we in the Green Party certainly embrace it. The first principle is that the onus is on members to make an honest attempt to recognise and declare all pecuniary interests—that is fine. The third principle—I am skipping the second principle for the moment—is that all distinct interests must be declared, regardless of whether they are channelled through a trust or third party, and that is fine. The fourth principle is that the approach in declaring interests should be, if in doubt, to declare them—and that is critical and fine, too.
The second principle, I think, is more complex. The second principle says that the House’s decision to administer its own regime for declaring interests, places a strong moral imperative on members to comply with the requirements in the spirit of the House’s own rules. I think, with respect, that that is one huge understatement. Administering one’s own regime when it comes to pecuniary or financial interests is always going to be problematic. I have personally always been somewhat apprehensive over any organisation—whether it is the New Zealand Law Society, today’s FIFA, or last century’s Ku Klux Klan—that decided to administer its own regime of self-behaviour. Although I think that all members of this House are acting with integrity and good intent when they undertake to administer their own regime, and to place upon themselves principles and standards of the highest level, I think that in the normal course of human events we nonetheless fall short. So I, personally, am always pretty apprehensive about self-administration of one’s own financial regime. When it comes to MP expenses, we have seen in the last few months a move away from self-administration towards the administration of the independent Remuneration Authority, and I wonder whether in due course we may want to reflect on this within that context, as well. That is the first point.
The second broad point is to remind the House that we have had a register of pecuniary interests for the executive, I think, for the last decade and a half, or thereabouts, and we have had one for the legislature for the last 4 years, or so. In each case, it is for the protection of individuals, both in the executive and in the legislature. But we lack comparable protection for the judiciary, and recently the saga of the resignation of former Justice Bill Wilson has prompted a member’s bill, on my own part, to record a register of judges’ pecuniary interests. That looks as if it may be well-received by both the Government and the Labour Opposition, and I look forward to collaborating with them in pursuing it later.
The final point is the relationship between public sector and private sector funds. I believe it is right and proper that public funds be open and transparent in terms of accountability and scrutiny. The public has a right to be assured that public funds are properly spent, and that public servants—in this case, elected MPs—are not in any way influenced through a conflict of interest. I think this report goes some way to meeting that goal.
But the same standards, in my view, need to be applied to private sector funding. If we have learnt anything from the global financial crisis of the past 2 years, it is that there should be no difference between the standards we proclaim for the handling of public funds and those there are for private sector funding. I myself do not discriminate between the taxpayer and the consumer, and I would be interested to learn whether ACT, the Association of Consumers and Taxpayers, shares this view. I ask why the individual New Zealander should insist on the strictest standards of transparency and accountability for public funds, but should tolerate a veil of opacity and secrecy for private corporate funds. We are all affected equally by both; we are all in this together.
The pure obscenity of the public bail-out of private corporations that have failed through corporate and individual greed, which masqueraded between the mythological walls of the free market, commercial risk, performance-based bonuses, and executive leakage, will stand as an abomination of the past two decades. It is time to insist on the same levels of accountability, the same standards of transparency, and the same threshold of behaviour between the public and the private sectors.
RAHUI KATENE (Māori Party—Te Tai Tonga) Link to this
I rise to take a very brief call specific to the clause that relates to members of Parliament with interests in Māori land and Māori land trusts. During the course of the review of the Standing Orders, there was debate on the concept of Māori ownership and on whether such land should be declared on the Register of Pecuniary Interests of Members of Parliament. This longstanding issue is unique, because of the complexity associated with a declaration of interest in jointly held Māori land.
If we look through the register of pecuniary interests, we might come across the names of many Māori MPs associated with various Māori land corporations and land trusts. If we were to look at Mr Horomia, for example, we would find that he has a beneficial interest in a wide range of trusts—for example, “Panikau H2, Mangatuna 3, 4, 5, 7, 8, Mangaheia 1B37, Rakiura Māori Land Trusts, Tokomaru K4A and K4B1— … Other Māori land incorporations and trusts on the East Coast, Wairarapa and South Island—”. I ask how we would extrapolate from such a wide list the beneficial interest that is specific to Mr Horomia as opposed to perhaps hundreds of other beneficiaries. For some of our MPs there might be an additional problem in completing declarations, as they may not even know that they have an interest in a Māori land trust. Even when the information is known, it can be onerous to identify blocks of land held by such trusts.
In responding to the review, Dame Margaret Bazley concluded that although she could understand the difficulties unique to Māori MPs with interests in multiple-owned land, she did not consider that it relieved them of their obligation to declare such an interest. Therefore, her recommendation was that Māori land would not be exempt from the declaration, but by the same means it was not necessary or reasonable to expect members to identify each individual piece of Māori land by its Māori Land Court block number.
The Māori Party is therefore happy to support a somewhat compromised position. We agree that an interest in jointly held Māori land should be declared under this clause, but we are also pleased to note that it is sufficient to give only the general location of the land, as for other real property, rather than the specifics of an individual block.