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Questions & Answers for Oral Answer - 16 June 2004

( Uncorrected transcript—subject to correction and further editing. For corrected transcripts, please visit: )

Wednesday, 16 June 2004
Questions for Oral Answer
Questions to Ministers

1 Beauty Products—Registration and Labelling
2 Immigration Service—Confidence
3 Nuclear-free New Zealand—Ship Visits Legislation
4 Nuclear-free New Zealand—Ship Visits
5 Taxation—Marginal rates for Middle-income Families
6 Research, Science and Technology—Budget 2004
7 Algerian Refugee—Confinement Costs
8 Holidays Act—Amendments
9 Special Benefit—Childless Beneficiaries
10 Taxation—Marginal Tax Rate
11 Dobson Hydro Dam—Ecology
12 Energy—Gas

Questions for Oral Answer

Questions to Ministers

Beauty Products—Registration and Labelling

1. MARC ALEXANDER (United Future) to the Minister of Health: Does she intend to provide for the registration and labelling of all beauty products for the presence of any of the 20,000 chemicals and other substances that are used in such products, as called for by Sue Kedgley following Reading University’s research into parabens, and what would such a regime cost?

Hon JIM ANDERTON (Associate Minister of Health), on behalf of the Minister of Health: The Government has no plans to put in such a regime. Chemicals in cosmetics have already been approved through the Environmental Risk Management Authority. New Zealand already has legislation to ensure the safety of ingredients contained in cosmetics. It is legislation dear to the heart of the Green Party—namely, the Hazardous Substances and New Organisms Act.

Marc Alexander: Does the Minister think that such an enormous cost could be justified, if there is one, on the basis of a survey that based its results on a sample size of 20 and did not include an analysis of non-cancerous tissue for a comparison, or is that the kind of thing that will pass for scientific proof if the Cabinet table is ever adorned by a few potted Greens?

Hon JIM ANDERTON: As Associate Minister of Health, and speaking on behalf of the Minister of Health, my advice to those who want to have a good complexion is that they do not need either unregulated herbal remedy potions or so-called beauty products. They just should not take drugs, do regular exercise, and eat their greens.

Steve Chadwick: What is the estimated comparative risk associated with regular lipstick use, as opposed to using dietary supplements such as bitter orange?

Hon JIM ANDERTON: I am advised that clinical experts are not aware of any reported ill effects, other than aesthetic, from using lipstick, whereas side effects reported from the use of bitter orange include high blood pressure and increased risk of health arrhythmias, heart attacks, and strokes. I find it somewhat bizarre, therefore, that the Green Party seems to be asking for tighter regulation on lipstick, but it is somehow against regulation of herbal remedies and at the same time is in favour of decriminalising cannabis.

Rt Hon Winston Peters: Is the Minister concerned that if the registration and labelling of the chemical components of beauty products does not go ahead, then some of the more conceited members of this House may be at greater risk of chemical contamination or unsightliness?

Mr SPEAKER: The Minister may comment, but only in general terms.

Hon JIM ANDERTON: I would hate to comment on any unsightliness of any member of this House, but I cannot say that I am entirely aware of what the member has asked.

Hon Matt Robson: Has the Minister received any reports of the potential benefits arising from the establishment of a joint therapeutic agency between New Zealand and Australia?

Hon JIM ANDERTON: Yes, only last week while visiting Nelson the management of Alaron Products—a firm that manufactures a high-quality range of dietary supplements from natural raw materials—urged me as a Minister in the Labour-Progressive Government to proceed with the establishment of a joint trans-Tasman agency to regulate therapeutic products as soon as was possible. Alaron Products see a number of potential benefits flowing from such a regulatory agency, including a reduction in compliance costs, increased capacity to meet a new wave of innovative products, and ensuring customers have early access to high-quality new products entering the market.

Sue Kedgley: Is the Minister aware that I was calling for a simple electronic system of registration along exactly the same lines that the Green Party is proposing for dietary supplements, and why would he seek to ridicule a proposal to introduce cosmetic regulations and mandatory labelling requirements that other countries like Australia, the USA, and the European Union already have?

Hon JIM ANDERTON: I think it is because a recent study carried out in Australia indicates that a number of adverse events are associated with herbal medicines. The recorded use of nutritional substances and homeopathic medicines in Australia is substantial, as it is here of course. The types of events that are negative in terms of their use are not trivial, and this most recent study indicates precisely that.

Larry Baldock: Does the Minister think that health issues of this type, which are often raised by Sue Kedgley and her ilk, perform a useful public service, or does the Minister of Health see them as dangerous scaremongering in the pursuit of an increasingly narrow political agenda?

Mr SPEAKER: That is asking for a matter of opinion. The Minister will be careful.

Hon JIM ANDERTON: Parliament is a robust arena, and members individually and collectively as parties have the right to raise issues that they deem to be important. I think it is equally important that those who advise Governments from a specific and specialist point of view have their viewpoints and that the information they give to the Government is advised to members and to the general public. Members of the public then have to make up their own minds, and I am sure they will.

Larry Baldock: In the role of Minister of Health is the Minister of the opinion that parabens cause more or less of a concern for public health than dihydrogen monoxide, a potentially deadly substance used in nuclear reactors that the member for the Greens also tried to have banned until discovering that its more common name was water?

Jeanette Fitzsimons: I raise a point of order, Mr Speaker. You really cannot allow questions that make statement like that that have no basis whatsoever in fact.

Mr SPEAKER: I think that the question was getting wide of the responsibility of the particular Minister and I will not allow it.

Marc Alexander: When Auckland University Senior Lecturer in Toxicology, Dr Malcolm Tingle, said that more research is needed and that it would be “a difficult nut to crack”, does the Minister think that he was referring to the scientific findings that he believes are almost certainly blown out of proportion, or to the fathoming of the policy processes of the Green Party?

Mr SPEAKER: The first part of the question can be answered.

Hon JIM ANDERTON: I think that all members of this House and the public of New Zealand at large would always welcome research that defines and identifies specific scientific evaluation. I would always welcome that sort of research, and the Government puts an awful lot of money into it.

Sue Kedgley: I would like first of all to table the Reading study, which showed that parabens can accumulate intact in the breast tissue of the body and mimic oestrogen.

Document, by leave, laid on the Table of the House.

Sue Kedgley: I would like to table the mandatory cosmetic labelling regulations of the American Food and Drug Administration.

Document, by leave, laid on the Table of the House.

Sue Kedgley: I would like to table something that outlines the mandatory cosmetic regulations and labelling regulations of Australia.

Document, by leave, laid on the Table of the House.

Immigration Service—Confidence

2. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Immigration: Rt Hon WINSTON PETERS to the Minister of Immigration: How many staff work for the New Zealand Immigration Service, and is he satisfied they are doing a competent job?

Hon PAUL SWAIN (Minister of Immigration): As at 31 May 2004 the total number of staff employed at the New Zealand Immigration Service was 870 including temporary employees, or 855 full-time equivalents. Those staff are involved in a range of duties, including assessing visa and permit applications, refugee status determinations, providing information on immigration issues and policy, and border investigations work. As to the second part of the member’s question, generally yes.

Rt Hon Winston Peters: Given that answer, has the Minister specifically considered contracting TVNZ to find illegal immigrants still residing in this country, given that it took TVNZ only 2 hours yesterday to find Saied Ghanbari, a person who was part of yesterday’s question time, and a man this Minister describes as “New Zealand’s most wanted illegal immigrant, who has been in hiding for 18 months”?

Hon PAUL SWAIN: Yes, my initial thoughts were to contract the services of Television One to the investigation and border branch of the New Zealand Immigration Service. But the reality is that although this person is illegally in New Zealand, he is clearly being hidden and protected, either by family or communities, or both. We are asking him to come forward so that he leaves voluntarily. If he will not do that, we will send him packing on a plane.

Georgina Beyer: What are the issues the Minister is considering in relation to a review of the Immigration Act?

Hon PAUL SWAIN: The Department of Labour is scoping areas of possible amendment to the Immigration Act. Major areas initially identified for attention include the appropriateness and effectiveness of current deportation and removal processes, including the number of appeal rights and how long they all take; provisions to enable greater information matching and sharing that could assist immigration investigations; and the security risk certificate provisions, once the Ahmed Zaoui case has been resolved.

Gerry Brownlee: What excuses has the Minister accepted from the immigration department for its being unable to locate that illegal immigrant over the last 18 months, although that is its specific job, and although Television One was able to do it within a couple of hours?

Hon PAUL SWAIN: We have had very full and frank discussions with officials about this matter. I think it is fair to say that the Immigration Service has spoken to this person this morning. The reality is, though, that if this person continues to be hidden by either family or the community, and does not bring himself forward, there are difficulties. This problem has been around for ages. But the reality is that once he is located he will be sent packing.

Keith Locke: If the Immigration Service is doing such a competent job, why is it enrolling police to do roadside checks for overstayers, which will only lead to racial targeting, and will undermine the cooperation between migrant communities and the police that is needed to solve real crimes?

Hon PAUL SWAIN: The police are doing no such thing.

Rt Hon Winston Peters: How can it be that the New Zealand Immigration Service, with a current budget of $135 million and a forward budget of $157 million, could not pick up its most wanted illegal immigrant, when extensive information regarding this very man and his whereabouts has been with the Inland Revenue Department—which he was consulting to do his bookkeeping—with the New Zealand Police, and at the Immigration Service’s disposal for more than 18 months; why is he tolerating this absurd incompetence, has he found the 14 Tongan rugby players yet, and why does he not just resign?

Hon PAUL SWAIN: In relation to the Tongan rugby players, we have found the fullback, but the wingers are being a bit elusive! As far as the first issue is concerned, it is pretty obvious that the person concerned would prefer the opportunity to speak in confidence to a television programme, seeking the opportunity to give his side of the story, than to speak to immigration officials, because he knows that when he speaks to immigration officials in person he will be sent home.

Rt Hon Winston Peters: If this is the way his department searches for its most wanted illegal immigrant, how does it search for the other 1,900-plus who are illegally here?

Hon PAUL SWAIN: Well, by and large the service does a good job. For example, last month 47 people were located and sent home. That member well knows that the reality is that a lot of effort goes in, but if people are being protected and hidden it is very, very difficult to find them.

Rt Hon Winston Peters: Is the Minister telling me that a whole township the size of, for example, Ashburton, is somehow being hidden and protected in New Zealand, and that his department is nevertheless doing a competent job, or is he telling me that he has no idea what he is talking about?

Hon PAUL SWAIN: No, I am not saying that a town the size of Ashburton is being hidden and protected. As the member knows, people do spread out across the country. This problem has been around for a long time—even when that member was Treasurer.

Nuclear-free New Zealand—Ship Visits Legislation

3. LUAMANUVAO WINNIE LABAN (Labour—Mana) to the Minister of Foreign Affairs and Trade: Has he received any reports relating to the legislation prohibiting nuclear-powered ships visiting New Zealand?

Hon PHIL GOFF (Minister of Foreign Affairs and Trade): Yes, I have this morning seen a report from a political party stating that it now will not make any decision about repealing the nuclear-free legislation before the election, and that it will consult the voters. That is the public position of the National Party, but I have no idea at all of what Dr Brash might have promised in secret in Washington on his recent visit there.

Luamanuvao Winnie Laban: What factors are relevant to the New Zealand Government’s position on this issue?

Hon PHIL GOFF: Although it is unclear what the National Party may do, this Government is absolutely unequivocal about this issue. It believes that New Zealand should remain nuclear-free, and notes that over a long period of time the New Zealand public, by a ratio of about 2:1, has consistently supported that position. What is more, this Government believes that any decision on our nuclear-free status ought to be made in this country, according to our judgment and values, and not what some other country or countries may be telling us to do.

Rt Hon Winston Peters: Given that Dr Brash has now changed his position to one of having a referendum, is it logistically possible for any Government in this country to hold a referendum by lunchtime?

Mr SPEAKER: The Minister has no responsibility for that.

Nuclear-free New Zealand—Ship Visits

4. JEANETTE FITZSIMONS (Co-Leader—Green) to the Minister of Foreign Affairs and Trade: Has he received any information that would cause him to review the Government’s policy of excluding nuclear-propelled ships from New Zealand waters?

Hon PHIL GOFF (Minister of Foreign Affairs and Trade): No. The policies pursued by successive Governments since 1987 that have kept New Zealand nuclear-free have consistently been supported by an overwhelming majority of New Zealanders. I believe that New Zealand has benefited from its clean, green image in a lot of different ways, and I believe that it is respected for making its own decisions as an independent and a sovereign country, rather than simply falling into line with what others may tell it to do, as the ACT and National parties would obviously like us to do.

Jeanette Fitzsimons: Is the Minister aware that Britain has banned its own nuclear-powered submarines from entering the Port of London and all other British commercial ports because of the safety risk posed by their nuclear reactors, and what would he say to those who want to expose—[Interruption]

Mr SPEAKER: I said I was going to warn members only once this week. I say to Mr Shirley that he is very, very lucky indeed. I will have the question stated again. All members have a democratic right, as elected members, to ask their questions of Ministers in silence, and I will uphold that. I ask the member to please start again.

Jeanette Fitzsimons: Is the Minister aware that Britain has banned its own nuclear-powered submarines from entering the Port of London and all other British commercial ports because of the safety risk posed by their nuclear reactors, and what would he say to those who want to expose the citizens of Auckland and Wellington to such a risk?

Hon PHIL GOFF: I am aware that it is the policy of the United Kingdom Government to keep nuclear-powered ships out of commercial ports, including the Port of London. I am further aware that the Australian Nuclear Safety Bureau does not allow nuclear ships into the Port of Sydney, and I am also informed that the United States Navy has a policy of keeping nuclear-propelled ships out of the port in New York. Clearly, if there were no risk, none of those policies would exist. There is a risk, and that risk has to be factored in. That is why we stay nuclear-free. There is no reason to have nuclear-propelled ships in our ports.

Hon Ken Shirley: Is this Government’s continued ban on nuclear propulsion based on identified environmental risk; if not, what is the reason for the continued ban?

Hon PHIL GOFF: The reasons that successive Governments have kept New Zealand nuclear-free are several. One of the factors is that there is a safety factor. One cannot rule out the question of an accident, and, what is more important, one cannot rule out the prospect of a nuclear-powered ship being a prime target for a terrorist attack. The United States Navy, with all its strength, was not able to stop a terrorist attack on the USS Kohl. If there were a nuclear-powered ship in a harbour such as in Auckland and such an attack took place, obviously the consequences would be catastrophic.

Gerry Brownlee: If, as he says, Australian ports are able to ban nuclear ships, British ports are able to ban nuclear ships, and indeed New York harbour itself bans nuclear ships, what is the problem with the relationship that New Zealand currently has with the US with regard to our current legislation?

Hon PHIL GOFF: There is absolutely no problem with regard to the legislation, except the problem the National Party has in trying to make up its mind as to whether it will repeal it. Will it be gone by lunchtime, or will it be left in place? What did Dr Brash say to the Americans when he was asked that question?

Gerry Brownlee: I raise a point of order, Mr Speaker. The Minister was asked a very, very simple question—

Mr SPEAKER: The member will please be seated. There was a very simple answer: he said no.

Gerry Brownlee: I have not told you what my point of order is.

Mr SPEAKER: I know what the point is. There is not going to be one.

Gerry Brownlee: I raise a point of order, Mr Speaker.

Mr SPEAKER: It had better be a point of order.

Gerry Brownlee: I ask you to consider whether Mr Goff gave an answer that is in any way consistent with his ministerial responsibility, given that he spent the entire answer in giving what he considers to be a National Party position—and, may I say, a wrong and misguided position from him.

Mr SPEAKER: The Minister did answer the question. That is not a point of order, and I warn that you should listen to the answer.

John Carter: I raise a point of order, Mr Speaker. May I ask you this question: if the answer that the Minister gave was no and you accepted that as the answer, why was he allowed to continue on with other utterances and references that were not part of the question?

Mr SPEAKER: The Minister was elaborating. I thought he got to the point where I had heard enough, and he stopped.

Peter Brown: Is the Minister aware that the first nuclear-powered ship was an American merchant ship, NS Savannah, and that it was dispensed with after a relatively short life because of safety concerns; and will the Minister confirm that safety concerns are far greater now since September 11?

Hon PHIL GOFF: I can confirm that the Savannah was totally unable to get any commercial insurance cover. The Opposition parties believe in the market, and the market believed that the risk was such that it would not insure that ship. That is probably why there are no merchant ships today that are nuclear-powered. The member is quite right that since September 11 the risk of terrorist attacks has brought a new dimension to the safety factors regarding nuclear-propelled vessels.

Jeanette Fitzsimons: Is the Minister aware that the city of Portsmouth in the UK has stockpiled iodine tablets to coincide with nuclear-powered submarine visits to the Portsmouth naval base, which are to be handed out to its citizens in the event of a nuclear accident; and what is his reaction to the prospect of Auckland schools being given piles of iodine tablets if we were to ever allow nuclear-powered ships to visit New Zealand?

Hon PHIL GOFF: Indeed, I have a newspaper article from the United Kingdom dated 8 October 2003 that indicates that 160,000 anti-cancer pills were stockpiled for the local population, in case of an emergency on a nuclear submarine in the Portsmouth dockyard. That was probably taken as a sensible precaution. It indicates once again that while the risk may be low, if there was to be an accident or an attack, the consequences are huge. That is another good reason why we do not have nuclear ships in our harbours, and why two-thirds of New Zealanders agree with the Government’s stance on that issue.

Jeanette Fitzsimons: Has the Minister seen this pamphlet, produced by the Southampton City Council and the United Kingdom Ministry of Defence and delivered to all residents within 2 kilometres of the Southampton naval base, which instructs them that in the event of an accident with a nuclear-powered vessel they should stay inside, not collect their children from school, and take iodine tablets; and is such a nuclear accident emergency plan part of his vision of a clean, green New Zealand?

Hon PHIL GOFF: The answers to those two questions are yes and no. I have a copy of that booklet. It is produced by the Southampton City Council. Interestingly, it is paid for by the Ministry of Defence. While National and ACT MPs may say that there is no risk, clearly the British Ministry of Defence acknowledges that risk, and therefore takes precautions. Risk cannot be eliminated. That is the reason why we will not have ships here, and why we stand by our policy, as do the Greens in support of that policy.

Jeanette Fitzsimons: I seek leave to table a Xerox copy of the booklet Radiation Emergency in the Port of Southampton: What to do if you live nearby.

Mr SPEAKER: Leave is sought to table that booklet. Is there any objection?

Document, by leave, laid on the Table of the House.

Taxation—Marginal rates for Middle-income Families

5. JOHN KEY (National—Helensville) to the Minister of Finance: Does he agree with the Prime Minister’s statement to the House yesterday, “We do not have any evidence to suggest that people will be dissuaded from working if they are in those upper-middle incomes that hit the higher effective marginal tax rate.”, and does he believe the impact of such high effective marginal tax rates on middle-income working families is fair and reasonable?

Hon Dr MICHAEL CULLEN (Minister of Finance): Of course, and yes.

John Key: Has the Minister seen research undertaken in the United States by the National Bureau of Economic Research, which studied this issue from 1984 to 1996 and found the impact on labour supply was to dramatically reduce the participation in the workforce of the lower-earning partner in families where both partners worked; if so, was this the intended design of the policy, and what impact does he think this will have on employers finding part-time employees?

Hon Dr MICHAEL CULLEN: No, and no.

Clayton Cosgrove: Do higher marginal tax rates exist under the current system, and are they endemic to any system that provides targeted support?

Hon Dr MICHAEL CULLEN: Yes, and yes. The existing maximum effective marginal tax rates are exactly the same as we inherited from the National Government, and are not altered by the package.

Rodney Hide: Does the Minister think it fair that a hard-working family will keep less than 10c of an extra dollar they earn; if so, why does he think that is fair?

Hon Dr MICHAEL CULLEN: I think it is fair that the system tries to recognise the cost of raising a family, and does not confuse differences in income with differences in effort.

Judy Turner: Does he agree that a potential effect of targeting assistance towards middle-income families is not to dissuade people from working altogether, as this decision occurs at much lower income levels, but to give parents more choice about whether they want to work overtime or spend time with their children, and is he aware of any party that would oppose that?

Mr SPEAKER: The first part of the question is fine. The second part is not the Minister’s responsibility.

Hon Dr MICHAEL CULLEN: Yes. I have received many statements over my time in politics complaining that many women in particular are forced out into paid employment, rather than staying home to bring up their children. The package makes that choice easier, and not one couched around economic necessity.

John Key: Does the Minister think it is fair that a family with three children, earning $38,000, receives pretty much the same after-tax income as their neighbours earning $70,000; if so, does he still support policies that would see the family earning $38,000 eligible for a community services card while their neighbours are not, and does he support policies that would see children from a family earning $38,000 eligible for sizeable tertiary student allowances while their neighbours earning $70,000 are not, even though the after-tax income of both families is virtually identical?

Mr SPEAKER: There are three questions. The Minister may have comment on two of them.

Hon Dr MICHAEL CULLEN: The incomes are not identical. The Government’s policy is to phase out the community services card, which we inherited from National. The primary health organisations that National has promised to abolish are a key part of that.

Gordon Copeland: Is the Minister aware that income splitting for single-income, two-parent families would effectively solve the perceived disincentive effect that is causing John Key some concern?

Hon Dr MICHAEL CULLEN: No, I am not sure that that would solve the problem, because there would still be a marginal tax rate effect on the combined income. It would be extraordinarily difficult to have a targeted system of support for families where the targeting was also split.

Hon Richard Prebble: Why does the Government say that it needs evidence to realise that, say, a schoolteacher with two children would face a huge disincentive not to take a promotion to head of department, when under the Minister’s Budget, that schoolteacher would lose 88c in every extra dollar if he or she has two children, and why does the Minister expect any schoolteacher in that situation to take on extra responsibilities when all this Government will give is 12c in every extra dollar earned?

Hon Dr MICHAEL CULLEN: Income is not the only thing that makes people seek promotion. I note the member’s new deputy leader has taken a salary cut in order to become deputy leader.

John Key: Does the Minister acknowledge that in the pre-Budget lock-up, he indicated to analysts his concerns that there may be problems in the design of the package for middle-income New Zealanders; and, if so, that they might be revisited in the middle of next year; if so, why did he promote a Budget that has a fundamental design flaw, which he is fully aware of?

Hon Dr MICHAEL CULLEN: I repeat again for the member the so-called design flaw is one that his Government happily lived with for 9 years and did nothing about at all. I further point out to him that if he wants to do something about it, the answer is not yet again his favourite nostrum of tax cuts that would benefit the wealthier more; it is to reduce the abatement rates from family support.

Research, Science and Technology—Budget 2004

6. Dr ASHRAF CHOUDHARY (Labour) to the Minister of Research, Science and Technology: What is the total new expenditure on research, science, and technology in this year’s Budget, and how does this compare to previous years?

Hon PETE HODGSON (Minister of Research, Science and Technology): The new expenditure this year is over $50 million, which is the largest dollar increase in science ever. Since becoming the Government, Labour has increased funding for science by more than 40 percent.

Dr Ashraf Choudhary: Has private sector expenditure kept pace with this rate of Government expenditure?

Hon PETE HODGSON: The answer is “probably”. To date, we have only the increase for the 2 years between 2000 and 2002, but that increase was a remarkable 32 percent. The Government and business are both putting their money forward and investing strongly in the nation’s future.

Dr Paul Hutchison: Why, despite increased funding, has the country’s largest Crown research institute gone from profit to loss under Labour, and the Health Research Council’s acceptance for high quality applications gone from 40 percent in 1999 to 15 percent currently; and are these not examples of why Labour cannot be trusted to spend taxpayers’ money well?

Hon PETE HODGSON: In respect of question No. 1, because it is investing in the future. In respect of question No. 2, which was about the Health Research Council, because the quality of applications has soared—notwithstanding a 60 percent increase in health research funding in the term of this Government. In respect of the third question, self-evidently not.

Algerian Refugee—Confinement Costs

7. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Immigration: What is the total updated taxpayer cost to date for all legal costs, prison costs, court costs, and any other costs associated with Ahmed Zaoui since his arrival in December 2002?

Hon PAUL SWAIN (Minister of Immigration): I have not been able to update the figures in the time available. The latest estimated cost that was provided to the House last month was $725,679.89. I will undertake to update this figure as soon as possible, and provide the member with the information as soon as it is available. I will also update this information on a monthly basis.

Rt Hon Winston Peters: If the Minister is able to do that on a monthly basis henceforth, why has he not been able to do it today, and why is he hiding behind the defence of inadequate time when he has had—[Interruption]

Mr SPEAKER: Please be seated. Mr Prebble knows he should not be doing that. I will be generous to him today, but he is the only person in this House to whom I will be generous. Please, Mr Peters has the right to ask his question in silence.

Rt Hon Winston Peters: If the Minister says he will update this expenditure on a monthly basis, why is he hiding behind the defence that he had inadequate time today, given that this question has been asked regularly, and that his department knows full well what we are after in respect of an updated expenditure cost; and, seeing as I have had to waste my time on that, can I ask the Minister the simple question whether the total outlay on this matter so far would not have helped 40 poor New Zealand families into homes?

Hon PAUL SWAIN: Firstly, an attempt was made to update the figures, but in the time available it was not possible. There is no interest on my part in concealing the figures. The member will have access to the accurate figures as soon as I am able to get them, and I will make a commitment that we will then have an ongoing monthly update so that the member does not have to spend time asking questions in the House. As far as the second figure is concerned, I cannot confirm the actual amount and the number of homes that the member referred to, but it is clear that this issue needs to be reviewed, and that is part of the review process that will be under way once this situation has been resolved.

Holidays Act—Amendments

8. Hon ROGER SOWRY (National) to the Minister of Labour: Will any amendments to the Holidays Act 2003 be introduced and passed before Labour weekend; if not, why not?

Hon PAUL SWAIN (Minister of Labour): Some issues have been raised with me about the implementation of the Holidays Act. Any clarification to the Act that may be required will need to be completed before Labour weekend.

Hon Roger Sowry: Has the Minister seen any reports of companies that have encountered a huge increase in absenteeism on public holidays; if so, why does he still now require further evidence?

Hon PAUL SWAIN: I have certainly seen media reports of that. I have asked for further information to ensure that any amendments that may be required—and I am certain there will be some—get to the heart of the problem.

Hon Mark Gosche: What is the Minister doing to see whether any changes are needed to the Holidays Act?

Hon PAUL SWAIN: I will be convening a working group comprising Business New Zealand, the Council of Trade Unions, and employers from major industry sectors to look at any unintended consequences arising from the implementation of the Act. They will advise me on what clarification is required.

Peter Brown: From the Minister’s answer, can I take it that he is aware that some relatively highly-paid people are capitalising on the Holidays Act simply by exploiting the definitions “ordinary weekly pay” and “relevant daily pay”; if he is aware of that, will this working group address that issue also?

Hon PAUL SWAIN: Yes, there are a couple of issues that have been brought to my attention. The first one is the issue of relevant daily pay and people potentially claiming time and a half on time and a half. The other issue is people who are rostered on for a public holiday potentially receiving time and a half and then calling in sick. This was not intended as part of the Act, and one of the issues I am sure the working group will advise me on is the clarification that is needed here.

Stephen Franks: Why did the Minister’s new law expressly prohibit employers from asking for a certificate to protect themselves against fraudulent sickies, and how does he have the gall to insult employers by asking for more proof of exactly the frauds they predicted would happen, when they are not allowed to ask for proof that the sickies were fraudulent in the first place?

Hon PAUL SWAIN: It certainly was not my intention to insult anyone. What I was seeking was further information. The issue that the member raises about proof of sickness is one of the issues that I am sure the advisory group will advise on.

Hon Roger Sowry: How can the Minister stand with a straight face and say that this is part of an unintended consequence, when the select committee was told by officials that payment of time and a half on top of time and a half would be a consequence of passing the legislation, and when the Labour Government voted for the legislation and for sickies to be able to be had with no requirement of proof of sickness?

Hon PAUL SWAIN: The member will be aware that this is the first change to the Holidays Act in, potentially, 50 years, and it is important that the principle of time and a half for public holidays be resolved. However, it is fair to say that some clarification is needed, and that is why we got the working group together.

Hon Roger Sowry: Why does the Minister now say that he will listen to businesses in New Zealand, who told him that this legislation was a mess when it was before the select committee, and how does he reconcile his willingness to listen to them on this issue with his unwillingness to listen to them on the other employment changes he is pushing through at the moment?

Hon PAUL SWAIN: The second aspect of the question is simply not true. There is a lot of effort going on, not just through the meetings I am having, but also, as the member knows, through the select committee, where business people are raising issues about the Employment Relations Bill. As far as the first issue is concerned, I have had a discussion with the Labour members on the select committee, and they do not recall the potential impact of the time and a half issue and people deliberately taking the time off on sick pay. That was an unintended consequence, and one of the things that may need to be addressed.

Hon Roger Sowry: If the Minister is now so keen to talk to the Labour members of the select committee, will he make himself available to the whole select committee and turn up to explain to all its members any changes he is proposing?

Hon PAUL SWAIN: I am due to be at the select committee on Thursday, and I am certain that this matter will not escape that member.

Special Benefit—Childless Beneficiaries

9. SUE BRADFORD (Green) to the Minister for Social Development and Employment: How will the abolition of the special benefit affect the income of beneficiaries without children in the future?

Hon RICK BARKER (Associate Minister for Social Development and Employment), on behalf of the Minister for Social Development and Employment: The Working for Families package will invest over $1 billion per annum in low and middle income families and households. From 1 April 2006, hardship assistance for new applicants will be replaced by the temporary additional support programme. So hardship assistance will still be available for beneficiaries and low-income workers facing particular special costs. This includes people without children. The temporary additional support is designed to be simpler and fairer than the current benefit system.

Sue Bradford: Does the Government accept that the loss of the special benefit is, in effect, a benefit cut for future beneficiaries, especially given projected savings of up to $91 million a year, as forecast in the estimates?

Hon RICK BARKER: No, I do not. I do accept that some people will have needs that will be in excess of the 30 percent margin, but for those who require extra assistance for health reasons, there is no cap on it. I think the system will be very fair.

H V Ross Robertson: Why is the special benefit programme being replaced with the new temporary additional support programme, as part of the Working for Families package?

Hon RICK BARKER: Temporary additional support is designed to be simpler and fairer than the complexity of the current special benefit system. The new programme will be based on clear rules and criteria, ensuring that access is fair and equitable. As well as being fairer for clients, the new programme will be simpler and quicker for staff to administer, allowing more case manager time to be dedicated to case management activities, such as employment or training, that help clients improve their situation.

Katherine Rich: Does he stand by his pledge that no beneficiary will be worse off financially as a result of changes announced in the Budget; if so, why?

Hon RICK BARKER: Yes I do, because there will be appropriate grandparenting clauses in the programme to ensure exactly that outcome.

Judy Turner: Can the Minister confirm that the cost of special benefits has increased from $34 million in 2000 to $82 million this year, and does he agree that the move towards a rules-based approach for temporary additional support will remove the high degree of discretion that case managers previously had over whether to approve a special benefit?

Hon RICK BARKER: The member has hit the nail exactly on the head. Having a rules-based system will ensure the programme is fairer. It will also ensure that instead of having discretion, which may vary from place to place and person to person, the system will be much more accurate and we will not suffer the problems we had through the 1990s with the special benefit.

Sue Bradford: Does the Minster agree with his own colleague Mark Burton, who criticised National’s social welfare reform legislation in the House in 1995, saying that the removal of discretion from special benefits is “just a de facto extension of benefit cuts”, and why has the Government seen fit to change its policy now it is in power?

Hon RICK BARKER: I do not disagree with many things that Mark Burton says, and in particular I do not disagree with that comment. What we do have is a rules-based system. If the member who asked the question wants to think about it, many of the beneficiary advocates have criticised the discretionary system and have argued for a rules-based system. This is exactly in line with what many of them want.

Sue Bradford: What advice will the Government be giving to beneficiaries, who in future will not be able to meet anything like their living costs under the new temporary additional support programme, or is he planning to raise the base benefit levels so they can survive after all?

Hon RICK BARKER: Beneficiaries in the future will have many more options. For example, currently a person receiving a single benefit, with no children, will face quite significant abatement rates if he or she goes on to work. What this Government is doing is reducing those abatement rates and making work pay. Many of these beneficiaries want to work but the system militates against that. This will be a much fairer system.

Taxation—Marginal Tax Rate

10. Dr MURIEL NEWMAN (Deputy Leader—ACT) to the Minister of Finance: Following the Prime Minister’s answer yesterday “that the Budget shifts the inherent issue of effective marginal tax rates further up the income scale.”, what is the highest effective marginal tax rate for a working family following the full implementation of the Government’s Budget, and how many working families will face an effective marginal tax rate of over 80 percent?

Hon Dr MICHAEL CULLEN (Minister of Finance): The highest effective marginal tax rate, following full implementation of the Government’s Budget, is the same as it is now.

Hon Roger Sowry: 101.2.

Hon Dr MICHAEL CULLEN: I thank the member. He is correct. At this stage, and within that time frame, officials cannot provide an answer to the second part of the question. There are simply too many variables to take into account.

Dr Muriel Newman: What is his advice to those many thousands of families affected by the high marginal tax rate on how they can improve their financial position, when they get to keep only 20c or less of each extra dollar that they earn?

Hon Dr MICHAEL CULLEN: My advice is that they will be far better off under this package than they were previously. The member keeps ignoring the fact that those families will have a higher income than they have now.

John Key: Does the Minister acknowledge that high effective marginal tax rates were a significant impediment for beneficiaries moving from welfare to work, and if he does, why does he think it will be different for middle income New Zealanders moving up the income scale?

Hon Dr MICHAEL CULLEN: I am not arguing that point. The difference in terms of the benefit issue is that people receive no encouragement to move off benefits at all in many cases, and therefore, remain on benefits. I thought that the National Party policy was to encourage people off benefits.

Rt Hon Winston Peters: Has the Minister received any reports that suggest that the origins behind the primary question relate to the fact that a certain party has chosen a new man and a “Newman”, but the same old policies that have failed in the past are still being supported by that party?

Mr SPEAKER: That is a nice try, but not quite within the Standing Orders.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I am not clairvoyant; however, I fully believe that the Minister of Finance may have well received such a report and he should be given a chance to tell us whether he has.

Mr SPEAKER: There has to be a report within his portfolio responsibilities.

Rt Hon Winston Peters: That’s right.

Mr SPEAKER: He can say yes or no to that.

Hon Dr MICHAEL CULLEN: It is not worth answering just yes or no, is it? No.

Dr Muriel Newman: In light of his Government’s determination that anyone earning over $60,000 a year is rich enough to pay higher taxes, why, under the Budget, does Labour intend to give handouts to families that earn up to $109,313?

Hon Dr MICHAEL CULLEN: I am not quite sure where the member gets that number from. It would depend on the number of children. Perhaps the member could indicate how many children she is referring to.

Dr Muriel Newman: Six or more children

Hon Dr MICHAEL CULLEN: The member ignores the fact that the family support tax credits will keep increasing with the number of children a family has. Theoretically, therefore, it could be even higher if a family has, say 20 or 22 children. I have not done the sums in that regard. I have to say that if we are dealing with somebody with 20 or 22 children, I suspect that their needs are somewhat greater than a single person on $60,000 a year.

Dobson Hydro Dam—Ecology

11. Hon Dr NICK SMITH (National—Nelson) to the Minister of Conservation: Does he agree with the statement on National Radio last Wednesday by his ministerial colleague Hon Damien O’Connor, in respect of the Conservation land required for the Dobson hydro power scheme, “Now I’m sure that a suitable trade can be arrived at.”; if so, what steps is the Government taking to enable a suitable trade of land?

Hon CHRIS CARTER (Minister of Conservation): No, I am not sure that a suitable trade can be arrived at. Finding a suitable trade for an area of forest protected by a National Government that is one of the best remaining examples of a particular forest type and that has rich bird life values seems exceptionally unlikely, nor is such a trade legally possible for a gazetted ecological area.

Hon Dr Nick Smith: Does the statement made by Government Minister Damien O’Connor: “Yes, the Dobson scheme makes good sense. I support in principle hydro development, and it is a good way to supply electricity to New Zealand, and particularly when it is close to the source of demand. I support the scheme.” represent Government policy; if it does not, can we believe anything that Damien O’Connor says as a Minister representing the Government?

Hon Dr Michael Cullen: I raise a point of order, Mr Speaker. The last part of the question is out of order. This Minister has no responsibility in that respect.

Mr SPEAKER: Yes, the last part is out of order, but the rest of the question is in order.

Hon CHRIS CARTER: The member for West Coast - Tasman is a fine advocate for his local area. He and I often discuss areas of mutual interest. We sometimes have a different emphasis on things. I will continue to discuss the issue with him.

Dave Hereora: What are the wildlife values of the area proposed for flooding?

Hon CHRIS CARTER: In the early 1980s the former Wildlife Service identified these valley floor forests as having the richest known native bird life, in terms of species, diversity, and abundance, in the whole of North Westland. That was one of the key reasons why the area was protected by a National Government. Indeed, Dr Smith himself recognised the reserve’s native wildlife values when he extended the area in 1997.

Hon Dr Nick Smith: Supplementary—

Mr SPEAKER: I will come to the member. Could he just calm down.

Hon Dr Nick Smith: I raise a point of order, Mr Speaker.

Mr SPEAKER: The member will please be seated for a moment. The member constantly interjects. I have counted about 40 today. He will get his question. Other members are entitled by party to ask questions.

Deborah Coddington: Does the Minister think it is fair that people living in the top of the South Island face power cuts and cold showers, while he will not allow a West Coast 65-megawatt power station to proceed, just so that he can woo so-called Green votes in Auckland?

Hon CHRIS CARTER: There are a number of power generation options in the northern South Island, from a coal-fired power station to alternative hydro schemes, so I do not agree that the only power option is the Dobson dam, which would generate about 60 megawatts of power.

Gordon Copeland: Why does the Minister claim that he cannot legally allow a small part of the Card Creek ecological area to be flooded, when section 18(7) of the Conservation Act states: “… the Minister may, by notice in the Gazette, vary or revoke the purpose, or all or any of the purposes, for which any land or interest held under subsection (1)”—which includes ecological areas—“of this section is held; and it shall thereafter be held accordingly.”?

Hon CHRIS CARTER: Legal advice from the department would seem to be contrary to the member’s interpretation. I would be happy to give that member a briefing with the top legal expert of the Department of Conservation.

Jeanette Fitzsimons: How can taking two areas of existing forest ecosystem, and destroying one of them and changing the ownership papers of the other, possibly be regarded as a trade, and is Dr Smith’s proposal a net loss of biodiversity no matter how one looks at it?

Hon CHRIS CARTER: The member has a good point. To change the Conservation Act, which I would be required to do to destroy the status of a gazetted ecological area, for 60 megawatts of power seems an extraordinary request.

Hon Dr Nick Smith: Does the Minister consider it acceptable ministerial behaviour to refuse to go on National Radio to discuss this issue, to suggest that his colleague Damien O’Connor do the interview, then to come to the House and say that on two key points his ministerial colleague was wrong?

Hon CHRIS CARTER: I think members of this House would agree that I have never been reluctant to go on national television or radio.

Hon Dr Nick Smith: I seek leave of the House to table the transcript from Radio New Zealand in which Mr Carter declined to be interviewed—

Mr SPEAKER: Leave is sought to table that transcript. Is there any objection? There is objection.


12. RUSSELL FAIRBROTHER (Labour—Napier) to the Associate Minister of Energy: What initiatives has the Government announced to meet future demand for gas in New Zealand?

Hon HARRY DUYNHOVEN (Associate Minister of Energy): On Monday the Government announced a package of incentives for the petroleum industry to increase exploration activity. The package comprises a reduction in the royalty regime for oil and gas discoveries made over the next 5 years, a review of specific tax laws affecting exploration activity, additional funding to Crown Minerals for technical data acquisition to increase knowledge of the more prospective parts of New Zealand’s petroleum basins, and increased resources for targeted promotion of New Zealand to international explorers and investors.

Russell Fairbrother: How much will this package cost?

Hon HARRY DUYNHOVEN: Although parts of the package have determinate costs, such as a $15 million boost to fund seismic exploration, the exact cost of the initiatives will be dependent on the level of gas exploration and the discoveries that are made. Revenue will be forgone only if gas fields are found. These incentives apply to production from new discoveries within the period 30 June 2004 up to 31 December 2009.

Hon Roger Sowry: How can the Minister be so happy to trumpet the virtues of this policy when Shell says the changes will not be enough to convince it to resume prospecting in New Zealand, which it suspended this year, and is this not just another example of spin over substance, from the Government?

Hon HARRY DUYNHOVEN: I am afraid that the member should count to 10 once or twice before he asks questions.

Mr SPEAKER: Please come to the answer.

Hon Roger Sowry: Is Shell coming back or not?

Hon HARRY DUYNHOVEN: First I want to read an extract—

Hon Roger Sowry: Is Shell coming back or not?

Hon HARRY DUYNHOVEN: If the member would be quiet for 30 seconds I will give him his answer.

Hon Roger Sowry: Is Shell coming back or not?

Mr SPEAKER: The member has asked a question three or four times. That is against Speakers’ rulings.

Hon Roger Sowry: Point of order—

Mr SPEAKER: Please be seated, I am on my feet—or the member will leave the Chamber and he will not be able to raise any point of order. I ask the Minister to please be seated also. I want to say quite bluntly that making a series of similar interjections has been ruled out by Speakers from about 1903. I allowed the member three goes, but that is it. The member asked the question. An answer will be given. I do not mind the odd interjection during an answer; I never have.

Hon HARRY DUYNHOVEN: I would like to read for the member an extract from a letter from Shell’s corporate communications manager, which I have received today. It states: “I wanted to write to assure you that this report’’—the one the member refers to—“is inaccurate and has taken some Shell comments to a Radio New Zealand journalist out of context. It was made clear to the reporter that Shell’s decision had nothing to do with the Government’s tax or regulatory regime as it was then or is now. Shell’s decision was motivated purely by the need of the Royal Dutch / Shell Group to allocate capital for exploration projects where the group feels it has the best chance of finding large reserves of new gas and oil. I have written to the chief executive of TVNZ asking how his staff arrived at the headline ‘Shell thumbs nose at Government’. ”

Gerry Brownlee: I raise a point of order, Mr Speaker. We would require the Minister to table that letter.

Mr SPEAKER: It is not an official document, but the Minister may like to answer the request.

Hon HARRY DUYNHOVEN: I seek leave to table the letter from Shell’s corporate relations manager, Mr Simon King.

Gerry Brownlee: It’s official.

Mr SPEAKER: The member has made two mistakes in the Standing Orders in one sentence. First of all, it is not an official document. Secondly, he cannot require somebody to table it if he does not want to. But the member has asked for leave.

Document, by leave, laid on the Table of the House.

End of Questions for Oral Answer

( Uncorrected transcript—subject to correction and further editing. For corrected transcripts, please visit: )

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