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SCP HOUSE: Questions Of The Day – 13 June

Today's questions of the day concerned: Borrowing And Saving For Super – Super Alternatives – Gagging DHBs – Minimum Wage – Bay of Plenty Health – Far North Power Disconnections – Ruapehu Lahar Protection – Electricity Prices – University Funding – UE Subjects – Borrowing And Saving For Super – Knowledge Economy.

Questions Of The Day - Wednesday, 13 June 2001

The following are paraphrases of today's questions for oral answer. They are not complete or official, the official record of Parliamentary proceedings is Hansard, which is not finalised till some days after the event.


Question 1.

Hon BILL ENGLISH (National) to the Minister of Finance Michael Cullen:

Q: Why did the debt outlook to 2005 change from one of declining nominal gross and net debt in the December Economic and Fiscal Update to one of a rising profile for both in the 2001 Budget?

A: Both gross and net nominal debt actually fall in 2002 compared to DEFU forecasts. In 2004-5 they are higher. Therefore the profile is uneven rather than rising. This reflects borrowing for capital expenditure. As I explained some time ago, there is no reason to have a constraint that nominal debt should not rise. The intended contributions to the super fund are unchanged, and therefore they cannot be contributing to the changing debt profile into the future.

Q: Can he confirm that $6.1 billion is to be put into his super fund at the same time as $7.6 billion is to be borrowed? And that therefore if it wasn’t being put into the super fund that debt would only increase by $1.5 billion?

A: Your math is wrong. But I note that opposition spokespeople have been advocating spending on lots of things, that would definitely increase debt.

Q: Why is debt rising?

A: Because we are taking on the debt of crown entities, and because we are spending money on important infrastructural investments.

Q: Does he accept he will be borrowing to put into the super scheme?

A: No.

Question 2.

MARK PECK (Labour) to the Minister of Finance Michael Cullen:

Q: What reports has he received on alternatives to the Government's superannuation proposal?

A: Both the leader of the Opposition and the Opposition Finance Spokesman said during the first reading debate that they would produce an alternative once the bill came out of the select committee. They have not produced this alternative yet.

Q: Bill English (National): Since last year’s budget said he wouldn’t have to borrow, and this one says he does, why isn’t he looking for alternatives?

A: The budget does not show that the Government has to borrow for the fund. The budget shows the government has to borrow for a number of reasons. One might even say the government has to borrow to pay the members salary, not that this could be said to be a high priority.

Q: Winston Peters (NZ First) Does he have any advice on what will happen if we continue to have high interest rates? And if we export capital under the super fund scheme?

A: No. But I think the member will be aware that maintenance of a low inflation environment is a critical part of maintaining sustained growth.

Question 3.

Hon ROGER SOWRY (National) to the Minister of Health Annette King:

Q: Why did she tell district health board chairs that it was more appropriate for board chairs or members, rather than chief executives, to discuss policy issues in public?

A: I commented in a conference call with board chairs and CEOs that chairs comment on policy, and that CEOs comment on operational matters. This is normal. I note that one board chair, Bob Henare, who was on that conference call, has rejected the member’s claims.

Q: What is her response to Ian Powell of the Association of Salaried Medical Specialists?

A: I understand Mr Powell got his information from Roger Sowry’s press comments, many of which were completely wrong. I’d prefer to listen to Mr Powell on occasion than Mr Sowry. In 1999 under the National Government the HFA required both hospital CEOs and Chairs not to comment during contract negotations.

Q: Is the real reason she wants to gag CEOs that the DHB chairs are Labour Party cronies?

A: Apart from four, all were appointed by the previous National Government.

Q: What should CEOs do about the conflict in her instructions identified by Mr Powell?

A: I do not think CEOs see any conflict in their commenting on operational matters. We have ended the secret society in health by opening up DHB meetings to the public.

Q: (Green) Is it inappropriate for her to interfere in the DHBs?

A: I did not interfere in the relationship between chairs of DHBs and the CEOs.

Q: (NZ First) If a CEO were to refer to hospital underfunding, would that be a policy or operational matter?

A: I would expect CEOs to provide advice to their boards on these matters openly and in public.

Question 4.

KEVIN CAMPBELL (Alliance) to the Minister of Labour Margaret Wilson:

Q: What further action is the Government taking to improve minimum wage protection for young workers?

A: (Laila Harre on behalf) Today we introduced legislation to repeal a provision that allows employers to pay workers almost nothing while they are in training. This is an Alliance policy. This reflects one of the priorities of this government, improving the lot of young workers. The government’s review of the law relating to the protection of workers when their functions are contracted out, or the businesses are sold, is not complete. The approach the government has taken in relation to the minimum wage is to ensure that those who are not in position to negotiate, have adequate minimum standards to protect them. We are not talking about a gold standard here.

Question 5.

(Annette King – leave sought to table the memo involved in this question – refused.)

Hon TONY RYALL (National) to the Minister of Health Annette King:

Q: What is her response to comments made by the chief executive of Bay of Plenty District Health Board that he finds "the environment very frustrating. We have no shortage of skilled and motivated staff with great ideas for better health outcomes but our inability to add value back into the system frustrates many of us."?

A: I have read the memo of 24th of May. It is to his staff. It is very constructive. I am pleased to see that management is working constructively with staff to improve services.

Q: Is the BOP DHB CEO’s press release on funding cuts the kind of honesty she doesn’t like?

A: No. I would encourage DHBs to be honest and open with their staff about these things.

Q: Are these comments operational or not?

A: I have no difficulty in the CEO’s internal memo to his staff.

Q: Does he make any suggestions on how to save money?

A: He does not want the board to reduce services or quality, and he outlines a number of options to achieve this.

Q: Winston Peters (NZ First): Why has she not provided the $9 million needed? And what is Margaret Wilson doing about it?

A: What is he doing about it? DHBs are in constant discussion with the government about such matters.

Q: Given the Minister’s claim that funding cut issues would be discussed in public, why were the public and news media excluded when these matters came up at a meeting of the BOP DHB recently?

A: I would suggest he ask the DHB. I have given DHBs no rules about what they have in public or in private.

Question 6.

JEANETTE FITZSIMONS (Green) to the Minister of Energy Pete Hodgson:

Q: How does the disconnection of power from up to 100 homes a week in the Far North contribute to achieving the Government's electricity policy objective of ensuring that "electricity is delivered in an efficient, fair, reliable and environmentally sustainable manner to all classes of consumer."?

A: It doesn’t contribute to the objective. It detracts from it, self evidently. Many of the disconnections are due to people shifting, I am told. Others are because some retailers have tightened their credit control rules. When this happened in Dunedin I recall it created considerable chaos. A key part of the way forward lies with prepaid metering.

Q: If prepaid metering is part if the way forward, why isn’t it happening?

A: It is happening in Christchurch. Government policy will require prepaid metering to be provided. But unfortunately the legislation needed to accomplish this is being held up by the irresponsible National opposition.

Q: Pansy Wong (National): Why did the Minister think his officials advised the Commerce Select Committee that effective methods to deal with these matters are already being developed?

A: Because they are. There is a 600 page booklet on this. I suggest the member read it.

Question 7.

Hon Dr NICK SMITH (National) to the Minister of Conservation Sandra Lee:

Q: What cultural and environmental objections led to her decision not to proceed with minor earthworks at the outlet of the Mount Ruapehu crater lake that would prevent a dangerous lahar 54% larger than that which caused the 1953 Tangiwai disaster?

A: (Mark Burton on behalf) The decision that has been made is to develop an alarm system. Other possibilities are not ruled out. I notice the bridges at Tangiwai now are built to a higher specification than they were in 1953. Digging a ditch might not even work.

(Roger Sowry – the minister has not addressed cultural and environmental objections.

Speaker – I thought an answer was given.)

Q: Can the Minister confirm that the one million tonne lahar is likely sometime in the next three years and that it would destroy the bridges and toilets at Tangiwai? And that it would disrupt road, rail and transmission lines? And how would an alarm system stop these things?

A: I can confirm that the DOC report, and an independent review of it, and that all the organisations involved in this have all concluded, with one exception, that the solution preferred by the minister is the appropriate one. The mountains were given to the crown by local Maori. In addition the law requires the Minister to take into account Maori views on these things. It would be totally unacceptable if Maori concerns were not taken into account.

Q: Can he confirm that the cost of this ditch would be just $200,000, and that this would be a small price to pay for public safety?

A: No. I cannot confirm that public safety would be provided by the bulldozer option. I can confirm that the agencies responsible for these infrastructural assets support this decision.

Q: Nick Smith (National): Can he explain why it is culturally okay to use bulldozers to build the road to nowhere in the Ureweras, but not okay to use bulldozers in Ruapehu to prevent a deadly lahar?

A: If the member wants to pursue his obsession with bulldozers I suggest he put down another question to the minister.

(Nick Smith - leave to table a report showing that Transit NZ does not support the Minister’s decision – granted

Mark Burton – leave to table two reports – granted.)

Q: Ron Mark (NZ First): What is the cultural difference between an eruption making a ditch, and a bulldozer making a ditch?

A: One is a natural event, and one involves interference with a natural process.

Question 8.

PETER BROWN (NZ First) to the Minister of Energy Pete Hodgson:

Q: What action is he taking to reassure electricity consumers in the face of reports of likely substantial electricity price increases?

A: Earlier this week I said that Transpower will be increasing the amount of power that can flow south from Taranaki.

Q: Is he prepared to intervene to stop high wholesale power rates being passed on to consumers?

A: I cannot make it rain. The last time politicians interfered with power prices, in California, it led to blackouts. If this happened in NZ in winter it could cause a large numbers of deaths.

Q: Pansy Wong (National): If he will not exercise leadership, does that mean he is happy with the competitive market?

A: When politicians interfered in California, the lights went out. I will not do it. People would die in my hometown of Dunedin.

Question 9.

Dr the Hon LOCKWOOD SMITH (National) to the Associate Minister of Education (Tertiary Education) Steve Maharey:

Q: Further to his answer in the House yesterday that he did not agree with Waikato University Vice-Chancellor Bryan Gould's reported statement that Ministers had said to tertiary institutions last year "Trust us, this is a one-off, we won't be back with the same deal next year.", can he explain exactly which part or parts of Professor Gould's statement are incorrect?

A: (Trevor Mallard on behalf) The 2002 offer is not the same as the 2001 offer. The offer in 2001 was for less.

Q: Is he accusing Professor Gould of not telling the truth?

A: My colleague made some clear comments last year. He said the government is committed to stabilising and bringing down fees. He said that the offer for 2001 was an interim approach. I stand by that policy. We are getting fees down. That member put them up.

Q: What other reports on undertakings has the Minister seen?

A: I have seen a report in which Dr Lockwood Smith pledged to resign if fees were not removed. They were not removed they nearly tripled by the time he left office.

Q: Muriel Newman (ACT): Is he blackmailing universities?

A: We haven’t used those words. There is a package and discussions. I am satisfied that we can reach a satisfactory conclusion. We offered more than $100 million. And yet we have the member and others squealing like a stuck pig.

Q: Nandor Tanczos (Green): Is he concerned about large numbers of university staff leaving to go to places where the government is investing in tertiary education?

A: A $100 million increase in funding is a major investment. Yes we have lost staff, but we have gained them as well.

Q: Will universities go into deficit?

A: I don’t know. That depends on what assumptions universities make about staffing.

Question 10.

NANAIA MAHUTA (Labour) to the Minister of Education Trevor Mallard:

Q: Is computing an approved subject for university entrance; if not, why not?

A: When year 13 students finish school this year then computing will be offered as a UE subject for the first time. This is long overdue.

Q: Are there any other new subjects?

A: Yes. Media studies, drama, Cook Island Maori and Samoan have been added too.

Q: When will all secondary teachers be happy with the NCEA?

A: Never. I think there may be some balance at present. I am being attacked from both sides.

Q: Will the NCEA be flexible?

A: Yes.

Question 11.

RODNEY HIDE (ACT) to the Minister of Finance Michael Cullen:

Q: How is increasing Government net debt by $1,031 million in the 2001/2002 financial year going to help either pay future superannuation or reach the Government's stated goal of "being back in the top half of the developed world in terms of per capita GDP"?

A: Changes in debt are largely a result of finance arrangements. It is the operational balance that enables transfers to be made into the super fund. The operational balance is forecast to be rather healthy.

Q: Has he seen reports that show households are poorer now than they were a year ago?

A: Yes. That has been driven largely by falls in house prices. Share prices have also fallen recently the member might have noticed.

Q: Has he seen any ways to spend lots of money?

A: Yes. ACT’s truth in sentencing bill would cost a fortune.

Question 12.

DAVID CUNLIFFE (Labour) to the Treasurer Michael Cullen:

Q: What reports has he received on reaction to the knowledge economy and economic development components of the 2001 Budget?

A: The reaction has been positive, particularly from the business sector.

Q: What is behind the cosy consensus with business that Bill English has been complaining about?

A: Lots of things (listed).

Q: Bill English (National): Can he confirm I was referring to a cosy consensus about growth forecasts?

A: Everybody has low growth forecasts for the current year, and that is due to the international economy, not anything to do with us.

Q: What else is driving the cosy consensus complaints?

A: Lots of things. This government has been receiving lots of compliments of late from business people.


Question to Peter Dunne, deputy chair of the committee considering MMP.

Q: Has the committee received any assurance from the government that should recommendations to MMP be made, that they will be included in a Government Bill, and presented to this house?

A: Under standing orders the government will have to respond within 90 days of receiving our report. It is expected that our recommendations, whatever they are, will receive a favourable hearing. Inevitably the government of the day is going to have to make some decisions however as it is unlikely that the committee will reach a consensus on all matters.


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