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Questions And Answers - Tuesday, 16 May 2006

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

Tuesday, 16 May 2006
Questions for Oral Answer
Questions to Ministers

1. Taxation—Comparative Reports
2. Economic Growth—Policy
3. National Certificate of Educational Achievement—Variations for School Certificate
4. Tax Cuts—Treasury Advice
5. Buy Kiwi Made—Reports
6. Cabinet Documents—State Services Commissioner Inquiry
7. Te Puni Kôkiri—Monitoring Function
Question No. 8 to Minister
8. New Zealand Focus Store—Sales Data, Hong Kong
9. Weathertight Homes Resolution Service—Proposed Measures
10. Civil Defence and Emergency Management Plan—Confidence
11. Labour Force—Increased Participation
12. Taito Phillip Field—Conflicts of Interest Report

Questions for Oral Answer

Questions to Ministers

Taxation—Comparative Reports

1. SHANE JONES (Labour) to the Minister of Finance: Has he received, in the last few days, any independent comparative reports on New Zealand’s levels of taxation?

Hon Dr MICHAEL CULLEN (Minister of Finance): No, I have not received what I would consider to be any independent reports in the last few days. I did receive an OECD report a few weeks ago that, based on robust comparative analysis, found that New Zealand had the third lowest tax wedge for the average worker in the OECD.

Shane Jones: How can he say he has not received any independent reports in the last few days, when the Centre for Independent Studies released a report on Monday?

Hon Dr MICHAEL CULLEN: That report can hardly be called independent, when its author is a former press secretary and researcher for the National Party. Indeed, I have his card in my hands—Philip Rennie, media research assistant to the Leader of the Opposition, who at the time was Mr English.

John Key: Can the Minister confirm that according to the Budget Economic and Fiscal Update, the operating surplus over the next 3 years will be approximately $13.4 billion, that that represents the surplus required to pay for the day-to-day running of the country—actually, it does—and that he could have plenty of room for tax cuts if he wished to fund his capital purchases out of some borrowing going forward?

Hon Dr MICHAEL CULLEN: No, I certainly cannot confirm that. What I can confirm, first of all, is that the Government is running quite significant cash deficits over the coming 4 years, requiring a significant increase in borrowing. I can also confirm that Mr Rennie’s main comparison is with the United States. The United States is running, at the moment, a fiscal deficit that is more than three times the size of New Zealand’s GDP.

Shane Jones: Has he seen any other additional reports on the taxation system from similar sources?

Hon Dr MICHAEL CULLEN: Yes, I have just seen a report from another former National Party press secretary that presages a forthcoming policy that will make even National’s 2005 tax policy look one-dimensional. This report was headed: “Thanks, Don. Now off you go.”

Economic Growth—Policy

2. Dr DON BRASH (Leader of the Opposition) to the Prime Minister: Does she stand by her statement that “getting higher levels of sustainable growth is dependent on industry, government, and other actors all playing their part.”; if so, how is her Government planning to achieve that goal?

Rt Hon HELEN CLARK (Prime Minister): Yes. The Government is continually interacting with industry and other actors to that end.

Dr Don Brash: Why did she say that her Government “has not the slightest intention of bringing New Zealand’s tax rates into line with Australia’s”; and how does she expect, on that basis, to retain our brightest and most skilled people, when a Deloitte’s tax expert estimates that following the Australian Budget last week, everybody earning less than $182,000 per year would pay less tax in Australia than they will in New Zealand, with an ever-widening gap between after-tax incomes in Australia and New Zealand as a result?

Rt Hon HELEN CLARK: The reason for not wanting the same tax rates for New Zealand is that tax rates are significantly higher in Australia than they are here.

Dr Don Brash: Is it fair that New Zealanders pay 50 percent more in tax now than they did in 2000, with the Government’s tax revenue rising at twice the rate of inflation over that period; if so, why?

Rt Hon HELEN CLARK: The good news about the increased tax take is that a third of it has come from growth in company profits under a Labour Government, and another third has come from so many more Kiwis being in work. There are over 300,000 more New Zealanders in work under a Labour Government. That does tend to put up the tax take.

Jeanette Fitzsimons: Is Fonterra’s goal of 5 percent per annum increase in dairying in New Zealand part of her ambition for higher levels of sustainable growth; if so, does she regard 5 percent per annum growth in methane emissions, 5 percent per annum growth in the use of water for irrigation, and 5 percent per annum growth in nitrate pollution of waterways as being sustainable?

Rt Hon HELEN CLARK: I would be very happy to see Fonterra growing at 5 percent a year. That, of course, could be achieved in a number of ways, including through Fonterra’s rather successful offshore investments, by which it is growing its business quite significantly.

Dr Don Brash: Does she stand by Dr Cullen’s statement last week that Australia would “… sooner or later, run out of gas and coal”, and can we now take it that waiting for Australia to run out of gas and coal is her Government’s bold strategy for clawing back the gap between after-tax incomes in Australia and New Zealand?

Rt Hon HELEN CLARK: What the member can take from that statement is that this Government will be investing in sustainable economic growth and in the people of New Zealand.

Sue Bradford: Does she see trade unions and environmental organisations as being included in her phrase “other actors”; if so, what role does she see them playing; if not, why not?

Rt Hon HELEN CLARK: Definitely. I believe that both have a contribution to make towards more sustainable economic growth, and indeed the international evidence suggests that high levels of unionisation actually go with higher levels of productivity.

Dr Don Brash: Why should we accept her assurance that New Zealand is on the right path to economic transformation when the IMD competitiveness scoreboard released last week showed that New Zealand has plunged 15 places, from 15th to 30th, in terms of economic performance?

Rt Hon HELEN CLARK: I suggest the member have a close look at that scoreboard, because the New Zealand Government was ranked 6th in the world in its contribution to competitiveness.

Dr Don Brash: What is the Prime Minister’s response to the former New Zealander now living in Sydney who featured on Television One news last night, who said that he had no intention of returning to New Zealand in response to the New Zealand Government’s campaign to bring Kiwis home, and that his reason for not returning was primarily financial?

Rt Hon HELEN CLARK: My response is to say that through the 1990s the Employment Contracts Act saw wages fail to go up at anything like the level of wages in Australia. My further response is to say that if Dr Brash thinks it is so hot over there, he should go and live there.

National Certificate of Educational Achievement—Variations for School Certificate

3. Hon BRIAN DONNELLY (NZ First) to the Minister of Education: Were the grade variations for School Certificate in its last five years both between subjects and within subjects over consecutive years similar to the grade variations observed thus far within NCEA?

Hon STEVE MAHAREY (Minister of Education): The answer is yes. Grade variations between subjects were similar between the last 5 years of School Certificate and the results we have seen under the National Certificate of Educational Achievement (NCEA). For example, between 2004 and 2005 the median difference in success rates for biology, economics, English, geography, mathematics, and science for level 1 NCEA was 3 percentage points. In 1999-2000 for the same subjects in School Certificate, the variability of results was also 3 percentage points. Information on grade variation within School Certificate subjects is not available. School Certificate was a simple pass/fail exam system, and any variation within subjects was therefore hidden. With NCEA we are able to ascertain which particular standards show variability and work on ensuring that they fall within acceptable levels.

Hon Brian Donnelly: Can the Minister confirm that the failure rate for School Certificate horticulture was 63.4 percent in 1997 and 43.1 percent in 1999—over 20 percentage points of difference—and can the Minister confirm which party was leading the Government during this period?

Hon STEVE MAHAREY: Yes, I can confirm that those figures are as the member outlined, and I can confirm that the National Party was the Government at that time.

Hon Bill English: Can the Minister tell the House why he thinks it is acceptable that the variability in up to 30 percent of the standards sat in 2005 was outside the New Zealand Qualifications Authority’s own benchmark of fairness to students?

Hon STEVE MAHAREY: The member just does not get it, does he? We are talking about the variability on essentially one question within a subject. When all of those standards are put together, the pass rate is acceptable and the standards are acceptable across that subject. One day the member will get it.

Hon Brian Donnelly: Can the Minister confirm that in 1998 58.9 percent of students failed School Certificate horticulture, whereas only 6.3 percent failed Latin, and might this indicate that there were large variances between subjects under the old system, and can he also confirm that these variances occurred under a National Government?

Hon STEVE MAHAREY: Yes, I can confirm that these gross variations were the case and I can confirm that the National Party was the Government at the time. I can further confirm that that is one of the reasons the National Party championed the change to the NCEA.

Hon Brian Donnelly: Is it true that the only certain way to ensure there is no variance in grades across year groups is by using norm-referenced statistical scaling, and which Government abandoned norm-referenced assessment in favour of standards-based assessment?

Hon STEVE MAHAREY: Yes, that is the case, and this is why we are continuing to build the robust foundations of NCEA. I can confirm that standards-based assessment was introduced by the National Government and that at the time of its introduction my predecessor, who was then Opposition spokesperson on education, endorsed that change and Wyatt Creech, who was the education Minister, welcomed that endorsement and said: “Isn’t it good we have some bipartisanship on something that we ought to share a view on.”

Hon Brian Donnelly: I seek leave of the House to table a paper that shows the fail rates—that is, D and E grades—for School Certificate subjects from 1997 to 2001.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Tax Cuts—Treasury Advice

4. JOHN KEY (National—Helensville) to the Minister of Finance: Did he, when deciding there would be no tax cuts in this year’s Budget, consider Treasury’s advice that the Government should think about tax reductions as well as new spending when developing Budget initiatives; if not, why not?

Hon Dr MICHAEL CULLEN (Minister of Finance): Yes.

John Key: When he said last week that Treasury is “out of step with a lot of thinking”, was that because Treasury disagrees with him on tax, the size of Government, the number of bureaucrats, the waste in Government expenditure, KiwiSaver, and the payroll tax, or are there any other things he would like to add to his long and growing list of things he is in disagreement and open hostility with Treasury about?

Hon Dr MICHAEL CULLEN: I have a very good relationship with Treasury. However, unlike the member opposite, I have no intention of being Treasury’s poodle.

Hon Mark Gosche: Has he received any recent reports on the affordability of tax cuts?

Hon Dr MICHAEL CULLEN: Along with a number of reports, both oral and written, that make it clear that neither the fiscal nor the macroeconomic position would make substantial tax cuts a sensible move in this year’s Budget, I have seen a report casting doubt on the affordability of tax cuts. It is headed “Nats rethink tax-cuts policy”, and represents either a sudden outbreak of fiscal responsibility or another split between Dr Brash and Mr Key.

John Key: What confidence can the public have that this year’s Budget is not full of just spin and third-grade economic logic, when he consistently ignores the advice of Treasury, the very people he employs to give him those costings and that advice?

Hon Dr MICHAEL CULLEN: I do not ignore the advice of Treasury, at all; indeed, in many, many respects I happen to agree with Treasury. But I am not going to be Treasury’s poodle, or perhaps, in these days, I should say Treasury’s blue heeler, given the desire of those across on that side to become Australia’s mates.

Gordon Copeland: Can the Minister confirm that, as part of the Government’s confidence and supply agreement with United Future, a discussion document will be developed to assess the impact of income splitting on reducing the tax burden for New Zealand families with dependent children; if so, would he consider including in future Budgets constructive initiatives arising from that document?

Hon Dr MICHAEL CULLEN: Yes, indeed, I can confirm such a document is being prepared; so is a document in relation to business taxation measures, in time for implementation in April 2008. That discussion document will be one for serious, intelligent discourse. I do not expect the National Party to participate in it.

John Key: Does he still have confidence in the Secretary to the Treasury, John Whitehead, given that he publicly disagrees with him all the time, or is Mr Whitehead likely to find out, as the Telecommunications Commissioner, Douglas Webb, did, via the Sunday Star-Times last Sunday, that he too is surplus to requirements?

Hon Dr MICHAEL CULLEN: I have great confidence in the Secretary to the Treasury. He and I agree on a very, very large number of things. But he is the chief executive of Treasury; I am the elected person, the Minister of Finance. Clearly, Mr Key has no ambition to make any decisions himself—just to be the mouthpiece for Treasury.

John Key: Is it not the case that it is no longer relevant what Treasury thinks about the merits of economic policy, because after the disaster of the “chewing gum Budget” last year the Prime Minister has taken control, has inserted Heather Simpson to direct the policy work, has told him to stop calling his Budgets boring even though they are, and has made it clear via the Listener that he is now vying with Dover Samuels to be our next Ambassador to Niue?

Hon Dr MICHAEL CULLEN: The Prime Minister is not the person in this House trying to render redundant any MP aged over 60; that role belongs to Mr Key, who is trying to kick out the poor man opposite, whose only desire in life is to graduate from being a joe to a joey.

John Key: When he reads the Budget on Thursday, will he allow Treasury publicly to join the rest of the New Zealand workforce in asking, in relation to tax cuts: “Where the bloody hell are they?”

Hon Dr MICHAEL CULLEN: One thing Treasury would tell that member is that an operating balance is not the measure of what can be spent on tax cuts. Treasury would regard Mr Key as thoroughly ignorant and dangerous in that respect, and would not support his attempt to delude the public; half of what he mentioned earlier today is booked for transfer to the New Zealand Superannuation Fund alone—and that is the man who convinced Dr Brash to change his mind on the New Zealand Superannuation Fund.

John Key: I seek leave to table the Budget Economic and Fiscal Update, which shows quite clearly that the operating surplus over the next 3 years will be around $13.4 billion, and that from that sum capital expenditure could be paid, which would allow the Government to have tax cuts—if Dr Cullen were not so stuck in the past.

Hon Dr MICHAEL CULLEN: I raise a point of order, Madam Speaker. May I suggest that when people seek to table a document they simply state what it is, and not draw conclusions. The document has, of course, already been tabled—it has to be tabled.

Madam SPEAKER: It is a timely reminder that when people are tabling documents they should do it succinctly. The purpose is just to identify what document they are tabling. Is there any objection to the tabling of that document? There is objection.

Buy Kiwi Made—Reports

5. SUE BRADFORD (Green) to the Minister for Economic Development: What reports has he received of reaction to the announcement of the $11.5 million Budget allocation for the Buy Kiwi Made initiative?

Hon TREVOR MALLARD (Minister for Economic Development): The announcement of funding for the Buy Kiwi Made initiative has been well received. I have seen statements welcoming the initiative from local manufacturers, business groups, and the New Zealand Council of Trade Unions. I was particularly heartened by the comment from Davey Hughes, a business person in Levin, who welcomed the announcement and urged other businesses to get in behind it. Just because he is the cousin of a leading Labour Party member does not mean that he cannot be a leading business person as well.

Sue Bradford: What other support is the Government giving to the manufacturing sector of New Zealand?

Hon TREVOR MALLARD: I would point out, of course, that the Buy Kiwi Made initiative is much broader than the manufacturing sector. But the Government is working in partnership with industry leaders, manufacturers, and unions to develop an industry-wide strategy for manufacturing. The emphasis has been on what industry can do to make sure that it has world-class manufacturers.

Barbara Stewart: Can he confirm that the Buy Kiwi Made initiative is included in the confidence and supply agreement with New Zealand First?


Sue Bradford: Does the Minister agree that it is a sensible economic development policy for New Zealand to ensure that it is not import-dependent, especially in a world of pandemics, terrorism, biosecurity threats, and peak oil?

Hon TREVOR MALLARD: Encouraging New Zealanders to support quality local businesses is something all rational New Zealanders support. I note that the only opposition to that has come from ACT and the National Party—which confirms my view.

Cabinet Documents—State Services Commissioner Inquiry

6. GERRY BROWNLEE (Deputy Leader—National) to the Prime Minister: Has she, her Ministers or staff received any information or advice from the State Services Commissioner since he began his inquiry into the leaking of a confidential Budget-related Cabinet paper to Telecom New Zealand Ltd; if so, what was that advice or information?

Rt Hon HELEN CLARK (Prime Minister): As I have said publicly, the State Services Commissioner has phoned me twice, to advise on process.

Gerry Brownlee: Has the State Services Commissioner advised the Prime Minister, or any member of her Government, of the name of the person who leaked the confidential Budget-related Cabinet paper to Telecom New Zealand Ltd; if so, what specific action has been taken against that person?

Rt Hon HELEN CLARK: To the best of my knowledge he certainly has not advised me, and I do not believe that any other Minister has been advised.

Gerry Brownlee: Why, when Dr Prebble’s terms of reference expressly state that he is to report to the Prime Minister and the Minister of State Services, are the Prime Minister and her Ministers stating they know nothing because they have not asked any questions; and is it really acceptable for a Government that used to wax lyrical about being transparent, open, and accountable to take that position?

Rt Hon HELEN CLARK: It is simply because the State Services Commissioner has not reported, and the Government has no desire to interfere in the process he is undergoing.

Gerry Brownlee: When the State Services Commissioner was publicly stating, late last week, that he knew who the leaker was, and that he would make the announcement sometime this week, why did the Prime Minister not think it would be a good idea for either her or her Minister of State Services to pick up the phone and ask him who it was?

Rt Hon HELEN CLARK: Dr Prebble rang me to tell me of the process. I have deemed it inappropriate to get early advice.

Gerry Brownlee: Will the Prime Minister’s Government be cooperating fully with the Securities Commission’s inquiry into the effects of the release of the telecommunications stocktake paper on the markets; if so, will she and her Ministers provide written and oral evidence if requested?

Rt Hon HELEN CLARK: I am not aware of any such request, but if the Government can help the Securities Commission, of course it will.

Gerry Brownlee: Did any person involved in the leak of the Cabinet paper work in a ministerial office?

Rt Hon HELEN CLARK: The member, like myself, will have to wait for the State Services Commissioner’s report. I do not know.

Te Puni Kôkiri—Monitoring Function

7. Dr PITA SHARPLES (Co-Leader—Mâori Party) to the Minister of Mâori Affairs: Ka taea e ia te ripoata ngâ hua kua puta i ngâ tirohanga mô ngâ tari kâwanatanga i waihangatia hei mahi mâ Te Puni Kôkiri, meinâ kâre, he aha ai?

[Is he able to report on the results of the monitoring of other Government departments for which Te Puni Kôkiri is responsible; if not, why not?]

Hon PAREKURA HOROMIA (Minister of Mâori Affairs): Te Puni Kôkiri does not have responsibility for any other Government departments. Te Puni Kôkiri provides an annual report to Parliament on its activities.

Dr Pita Sharples: Kei te whakaae ia ki ngâ kôrero i kiia i puta i a Leith Comer i te râ kua pahure ake nei, arâ, “he moumou tâima noa iho te titiro i ngâ tari kâwana”, â, kei te whakaae anô ia ki ngâ kôrero o taua tumuaki i te 16 o Maehe o tçnei tau, arâ, “kei te hiahia a ia te neke mai i te tûnga pirihimana mô ngâ tari kâwana”; â, nâ ngâ tohutohu a te Kâwana ka kôrero pçnei te tumuaki, â, kei te tautoko te Minita i aua tohutohu?

[An interpretation in English was given to the House.]

[Would he agree with yesterday’s reported comments attributed to Leith Comer that the auditing and monitoring of other agencies was “a waste of time”, and the earlier comments made on 16 March this year by that same chief executive that “he wants to move away from being the policeman of the State sector”, or is the chief executive saying this because it is a directive specified by the Government with the Minister’s support?]

Hon PAREKURA HOROMIA: I support most of the statements made by my chief executive. Members should be very clear that the statement “a waste of time” was made by the radio presenter, not by the chief executive, Leith Comer.

Hon Tau Henare: What response does the Minister have to the Mâori Affairs Committee statement that section 5 of the Ministry of Maori Development Act does not give Te Puni Kôkiri an option as to whether it should undertake a monitoring role but directs it to do so?

Hon PAREKURA HOROMIA: Monitoring is just one function of Te Puni Kôkiri. The responsibilities under the Act of the Ministry of Mâori Development are quite clear. The key things under the Act that Te Puni Kôkiri is responsible for include promoting increases in the levels of achievement attained by Mâori in respect of education, training and employment, health, and economic resource development. Te Puni Kôkiri will give effect to the strategic outcomes it has stated. That is only one part.

Hone Harawira: He aha te take i whakaae ai te Minita ki te tono a te Kâwanatanga kia whakaitingia ngâ mahi tirotiro a Te Puni Kôkiri, â, e âwangawanga ana a ia ki ngâ mahi a te Kâwanatanga kia tohutohu taurekareka ki Te Puni Kôkiri, kia kaua e tôtika ôna mahi i raro i te ture?

[An interpretation in English was given to the House.]

[Why did the Minister agree with the direction determined by his Government that Te Puni Kôkiri should downsize its monitoring role; and is he concerned at this belittling, illegal action of the Government in forcing Te Puni Kôkiri to ignore its legal responsibilities?]

Hon PAREKURA HOROMIA: I am not too sure which world some people have been living in for the past 6 years. It is time for Mâori to move forward. There are some people who want them to be stuck in the past. Mâori are moving from dependency to development, and this Government has done a hang of a lot about that. Since 1992 Te Puni Kôkiri has progressively developed its policy-monitoring and operational functions. It has undertaken statistical monitoring, agency reviews, effectiveness audits, and day-to-day monitoring. We are living in a world now where Mâori have the lowest unemployment rate in history, and that was created by this Government—not like in the 1990s, when the National Government did nothing.

Dr Pita Sharples: I raise a point of order, Madam Speaker. The Minister did not answer the question. The question asked why he agreed to downsize Te Puni Kôkiri’s monitoring role.

Madam SPEAKER: The Minister did address the question, as far as I could hear over the barracking. As the member is aware, Ministers are not required to directly answer questions to the satisfaction of those who ask them.

Hon PAREKURA HOROMIA: There was no such directive.

Shane Jones: He aha ngâ ôati a Te Puni Kôkiri? What is the range of responsibilities of Te Puni Kôkiri? [Interruption]

Madam SPEAKER: Members know that interjections are permitted but that barracking is not. It was very difficult for me to hear.

Hon PAREKURA HOROMIA: Pursuant to section 5 of the Ministry of Maori Development Act 1991, the responsibilities of the Ministry of Mâori Development include promoting increases in the level of achievement attained by Mâori in respect of education, training and employment, health, and economic resource development, and monitoring and liaising with each department and agency that provides, or has a responsibility to provide, services to or for Mâori, for the purpose of ensuring the adequacy of those services within each department.

Hone Harawira: Ka taea anô e Te Puni Kôkiri te whakatutuki ngâ mahi i waihangatia e te ture kia tirohia ngâ tari kâwana kua tohua hei tuku âwhina ki te Mâori, mô te Mâori rânei, i runga i ngâ âwangawanga a te Mâori, kâhore ngâ rôia o Te Puni Kôkiri e mâtau ana ki Te Reo Mâori, i whakaaturia tçnei âhuatanga i tçtahi hui o te Taraipiunara o Waitangi?

[An interpretation in English was given to the House.]

[Has Te Puni Kôkiri the capacity to undertake its statutory responsibilities to audit and monitor “each department and agency that provides or has a responsibility to provide services to or for Mâori”, particularly in the light of concerns from Mâori at the inability of Te Puni Kôkiri’s legal team to understand te reo Mâori, as demonstrated at a recent hearing of the Waitangi Tribunal?]

Hon PAREKURA HOROMIA: There are a lot of people who do understand the Mâori language, and there are some who cannot. Certainly, we will reinvest our resources in three key, core areas to help out with that problem. Some people are not as conversant with Mâori as my colleague from Te Tai Tokerau is; he is very conversant with it. We will develop and use resources, which is rawa, build knowledge and skills, which is mâtauranga, and strengthen leadership and decision making, which is whakamana. In those things Mâori are not very different from other people in this land and the needs they have.

Dr Pita Sharples: Nâ, i runga i te âhua kâhore a Te Puni Kôkiri i mahi tonu ana i ngâ tikanga i waihangatia e te ture; he aha kei te noho tonu ai hei tari kâwanatanga?

[An interpretation in English was given to the House.]

[If the Ministry of Mâori Affairs is no longer carrying out its statutory responsibilities, why should it exist as a Government department?

Hon PAREKURA HOROMIA: E whakaaro ake anô au i rongo i a koe e Pita mô tçrâ kôrero, kâre e tika e taea ake anô i konei te kôrero moumou tâima pçrâ tonu mô râtou ngâ kanohi Mâori, mô te Tari Mâori e tû ake anô â mua râ ngâ tari kâwanatanga katoa.

[An interpretation in English was given to the House.]

[I have considered what I heard Pita say earlier, and it is not right to say here that it is a waste of time for Mâori, for the Ministry of Mâori Affairs, and for all Government departments to remain in future.]

Hon Maurice Williamson: I raise a point of order, Madam Speaker. If a Minister can get up and answer a question by saying this is not the right forum and the question should be answered somewhere else, and if you think that addresses the question, then we could spend the whole day with Ministers saying they will address questions somewhere else. This is Parliament.

Madam SPEAKER: The Minister did address the question. The point that the member has raised is a debatable point. The Minister did respond. It is for others to determine the quality of the answer.

Question No. 8 to Minister

Madam SPEAKER: I call Katherine Rich—[Interruption] The member is entitled to be heard in silence by members of her own party.

New Zealand Focus Store—Sales Data, Hong Kong

8. KATHERINE RICH (National) to the Minister for Economic Development: Does he stand by the statement made on his behalf by the Hon David Cunliffe that “total sales data are not yet available” for the New Zealand Focus store in Hong Kong six months after opening?

Hon TREVOR MALLARD (Minister for Economic Development): Yes, and, to explain, that is because most of the sales data belongs to Air New Zealand, education providers, Fisher and Paykel, and New Zealand Natural.

Katherine Rich: Will he confirm that the retailers who run that store are required by New Zealand Trade and Enterprise in their contract to provide it with sales reports that break down sales by day, by week, and by month; and how can he stand in the House and argue that he will withhold that information on the grounds that it may be commercially sensitive, when I have asked for total sales, not sales by product or individual supplier?

Hon TREVOR MALLARD: Because most of the products sold from that shop are not things that are sold across a counter—things like the supply of New Zealand Natural products, the supply of air fares to New Zealand, the services of education providers, the Fisher and Paykel contracts right up into China—[Interruption] I say to Nick Smith that at least I can count, unlike him.

Katherine Rich: Why is he standing in the House and giving the impression that something that was launched and promoted as a retail store is now something other than a retail store; and why will he not provide answers to the House on what revenue is generated by that retail store in Hong Kong—is it because the sales are so poor?

Hon TREVOR MALLARD: Anyone who thinks setting up a retail store on its own was the objective of the New Zealand Focus centre has to be stupid. This focus store is bringing people down from China to look at New Zealand products for direct sale to that country. It is a shop front for New Zealand, to the extent that I understand at least three other Chinese provinces have said they want to have one of these shops, because it is so successful in providing access to New Zealand products. The idea that the New Zealand Government has become involved in street retailing in Hong Kong is just ludicrous.

Lynne Pillay: What reports has he seen in support of the New Zealand Focus centre in Hong Kong?

Hon TREVOR MALLARD: The latest report I have seen is from Malcolm Harris, the Chief Operating Officer for Fisher and Paykel, who last week said: “We applaud the Government initiative. It’s about time, and we hope that they open more.” We know National is out of touch with New Zealand businesses, we know it has had its funding cut off—given that Don will be dropped—but it should listen to some of the people who know the way business works, as far as exporting from New Zealand is concerned. National might not care about Fisher and Paykel, but on this side of the House we do.

Madam SPEAKER: I just remind members to please use the proper titles when they are referring to each other.

Katherine Rich: Given that the New Zealand Focus store has cost New Zealand taxpayers $1.4 million to set up, and costs $1.3 million to operate over a year, why will he not tell taxpayers what sales are being generated from it in Hong Kong, and will he just admit that he will not do so because the sales are so pathetic?

Hon TREVOR MALLARD: The objective of the store was to have not sales from people who go to the store, but a net economic benefit to New Zealand of $25 million over 3 years. I have received no advice that that net economic benefit will not be met.

Mark Blumsky: Why did the glowing statement that the Minister just made about Fisher and Paykel not include the fact that the company still cannot demonstrate its gas hobs because, in the 6 months since the opening, the gas has not been connected to those hobs; is it because he is too embarrassed to share that fact with Fisher and Paykel?

Hon TREVOR MALLARD: I think one of the things that proves is it is not quite as easy to do business in Hong Kong as it is in New Zealand. But the other point I would make to that member is that it is about time he came clean with this House and told it that, for the last 3 months, he has been acting on behalf of one of the failed bidders into this New Zealand Focus centre. Why does he not just tell the truth and admit he has been attempting to undermine this since one of his mates who tried to get the contract was not good enough to get it?

Mark Blumsky: Does the Minister have confidence in his assessment process used to select the store operator, Northeast Wines and Spirits, given that it scored the lowest out of all the bids in the category of retail experience when it was contracted to run the retail operation, that it scored the lowest out of all the bids in sales team support, and that it scored the lowest out of all the bids in import product experience—all categories considered important by retailers if one does not want to open up a retail lemon?

Hon TREVOR MALLARD: I have confidence that the private sector people who were involved in awarding the tender in this did it properly—

Mark Blumsky: I raise a point of order, Madam Speaker.

Hon TREVOR MALLARD: The member cannot interrupt at this point.

Madam SPEAKER: Yes, the member can interrupt the Minister in answering the question.

Mark Blumsky: I just say that under Standing Order 116 I take incredible offence at the comments made by the Minister regarding his previous answer to the question asked. There is nothing further from the truth.

Madam SPEAKER: Under the Standing Orders the member is meant to raise the matter immediately, and he has not. He waited until we moved on to the next supplementary question, which he himself asked. But, in the circumstances, is the member saying he has taken offence at those comments?

Mark Blumsky: Yes, Madam Speaker.

Madam SPEAKER: In that case, I ask the Minister to withdraw and apologise. But I just remind members that if they take offence, please raise the matter immediately.

Hon TREVOR MALLARD: I will leave the House rather than withdraw and apologise for telling the truth about that member, who has spent tens of thousands of dollars worth of New Zealand Trade and Enterprise time answering Official Information Act requests—

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

Hon TREVOR MALLARD: I am on a point of order—

Madam SPEAKER: But the Minister is not addressing it. [Interruption] I ask both members to please sit down. The Minister was asked to withdraw and apologise. Therefore, in response, he either withdraws and apologises or himself raises a point of order. If the member wishes to leave the House, then that is obviously his choice.

Hon TREVOR MALLARD: I raise a point of order, Madam Speaker. I want to make it clear that over the last few months—

Gerry Brownlee: That is not a point of order. We will not respect a point of order going down that track.

Madam SPEAKER: I ask the Minister to address the point of order.

Hon TREVOR MALLARD: I reject the allegations made by that member in his point of order. That member has repeatedly, as I said earlier—and I cannot withdraw from telling the truth in this House.

Madam SPEAKER: The Minister has responded. I take it from his comments that he will not withdraw and apologise. Therefore, I ask him to leave, please. [Interruption] The member is out.

Hon Trevor Mallard withdrew from the Chamber.

Gerry Brownlee: I raise a point of order, Madam Speaker. I ask you to reflect on your decision, given the last time a member spoke after being asked to leave the Chamber and the warnings you gave the House at that time. The comment made by Mr Mallard when he left was completely unnecessary and was most certainly directed at the Chair. I would think that in the normal course of things he would be named for such an attack.

Madam SPEAKER: Under the circumstances—of course, members are normally out until the end of question time—the member will be out until the end of the day.

Mark Blumsky: I seek leave to table the scorecard used by New Zealand Trade and Enterprise to evaluate the competing bids, showing Northeast Wines and Spirits to be the lowest in that process. I also note that the other bids were totally blanked out and, therefore, very much unknown to myself.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Weathertight Homes Resolution Service—Proposed Measures

9. DAVE HEREORA (Labour) to the Minister for Building Issues: What are the measures proposed to improve the Weathertight Homes Resolution Service?

Hon CLAYTON COSGROVE (Minister for Building Issues): Following a thorough review, the Weathertight Homes Resolution Service will be overhauled to stop gaming of the system, to hold building industry professionals to account, and to get leaky homes fixed faster. In particular, the measures will provide more comprehensive assessment of damage, improved information and case management for claimants, a broadened definition of damage to include probable as well as actual damage, faster and more effective dispute resolution, a class action approach to multi-unit claims, and a pilot financial assistance scheme targeted to help those in the very worst circumstances.

Dave Hereora: What reports has the Minister seen in reaction to the proposed measures?

Hon CLAYTON COSGROVE: I have seen a number of reports, including reports from David Russell of the Consumers Institute, who said: “I think it’s a big step in the right direction.”; from Leaky Homes Action Group Chairman, John Gray, who said: “The review outcomes are very positive for leaky-home owners.”; and from the Registered Master Builders Federation, which called the Government’s measures: “A common-sense approach to dealing with how the programme needs to be run.” I have also seen reports that owners were given false information by one individual who, in respect of his views on this issue, was yesterday named “loser of the week” by the Dominion Post. That person was the National Party spokesperson on building issues, the Hon Dr Nick Smith.

Hon Dr Nick Smith: Does the Minister agree with the statement made by the Prime Minister that the leaky homes problem was “a media beat-up”, now that his own ministry states that 15,000 homes are affected and that it will cost over $1 billion to fix the problem; and can the Minister also explain how a loan scheme involving only $7 million over 2 years—or less than 1 percent of the problem—will leave homeowners in anything other than the mess they have had from this Government over the last 4 years?

Hon CLAYTON COSGROVE: In relation to the Prime Minister’s comments—which are right—the media tends to beat up issues a lot of the time, except that it seems to have got certain things about the Opposition right. I can say that the leaky homes issue was the result of shonky work done by some developers, designers, builders, “subbies”, inspectors, and others. But they did have help. The deregulation of the building industry, the deliberate destruction of the apprenticeship system, the introduction of private certification, and the allowing of untreated timber framing to be used are all significant factors in this issue. Who legislated for this mess? It was the previous National Government, and we are cleaning it up.

Peter Brown: Given the last part of that answer, what advice would the Minister give to a person who has bought a home only to find some time later that it has been patched up to disguise a significant weathertightness problem?

Hon CLAYTON COSGROVE: I would invite those people to call on the Weathertight Homes Resolution Service, because under that service they will get dedicated case management and beefed-up assessment reports. They will be guided through the system and the existing investigative powers that adjudicators have now will push claims through. I say to the member that many of the people who do not like this move will, I suspect, be in the legal fraternity, because they will not get nearly as much money in the future as they have already received from the victims because the victims will be supported through the assessment process.

Gordon Copeland: How often has it been the case that an amount settled under the Weathertight Homes Resolution Service, and a payment made to a house owner, has not actually been used to rectify the leak; and in how many of those cases was the house sold subsequently to another individual who then brought another case to the same service in respect of the same leaky home situation?

Hon CLAYTON COSGROVE: I do not have the exact number, but I can say to the member that that situation will be remedied, too. We will work with local authorities to ensure that that information is put on the land information memorandum. So, for instance, if a homeowner goes through the Weathertight Homes Resolution Service, gains a claim, and decides—as is the homeowner’s right—not to fix up a leaky home, then the owner will be required to place that information on the land information memorandum so that future purchasers will have full visibility. If future purchasers want to buy the home, they will go in with their eyes open.

Civil Defence and Emergency Management Plan—Confidence

10. Hon Dr NICK SMITH (National—Nelson) to the Minister of Civil Defence: Why should New Zealanders have confidence in the National Civil Defence and Emergency Management Plan when Canterbury civil defence says it has “big ambiguities, big inconsistencies, big holes”, when Greater Wellington civil defence described the plan as fatally flawed, and when Mai Chen’s legal opinion called it “dysfunctional”?

Hon RICK BARKER (Minister of Internal Affairs): Because for the first time we have a national plan, and an accompanying guide that has 400 agencies across New Zealand engaged in a coordinated structure for local, regional, and national support responding to and recovering from a disaster. There can be no doubt that the national plan makes proper provision for management of impacts of disasters at a national level, from whatever cause. This is done in both clause 9 and other parts of the plan. While the plan and the guide are robust, I have no doubt that they can be improved over time. The fundamental arrangements for responding to disasters are robust.

Hon Dr Nick Smith: What will it take for this Minister to realise that civil defence is not properly prepared for an emergency, when we had a botched Auckland civil defence exercise in April, the fiasco over communications in respect of the tsunami warning a fortnight ago, and this week, criticism by Canterbury and Wellington that their plans are fatally flawed and dysfunctional, or do we have to have bodies in a real civil emergency before he realises that his civil defence services are not prepared?

Hon RICK BARKER: In respect of the opinions of the Wellington civil defence group, those opinions are 9 to 12 months out of date; they were opinions launched at the time the plan was put up for discussion. I had a discussion with the group this morning and its members accepted that the plan is substantially improved and they are comfortable with it. In respect of the exercise in Auckland, I would expect that any exercise would identify some inconsistencies. It is very difficult to get things perfect the first time. What I am looking for in civil defence are constant improvements over time, and we have achieved that.

Steve Chadwick: Has the Minister seen any reports that support the national plan?

Hon RICK BARKER: Yes, I have seen a report that states that the national plan, as it stands, is an adequate description of the current understanding and arrangements in place for managing national emergencies, but there are some areas for improvement that a review will address. However, it also states that the plan is definitely an improvement on the situation prior to the adoption of the Civil Defence Emergency Management Act 2002. The report goes on to state that a great deal has been achieved since the new Act was adopted, and looks ahead to what can be achieved during the next 2 years that will contribute to a more robust national plan with a formal review in 2 years’ time. That report was from Local Government New Zealand president, Basil Morrison.

Hon Dr Nick Smith: Why does the lead story in Dominion Post this morning state: “A spokesman for Civil Defence Minister Rick Barker said the minister would not comment on the report.”, and why does he bother collecting a $216,000 salary, a ministerial car, and a house if he is not prepared to front up and answer questions about our preparedness for a civil emergency when there are lives at stake?

Hon RICK BARKER: Because I am here today answering questions, as I should do, and I want to say that this Government has put substantial amounts of money into civil defence. We are going to increase the amount of money for civil defence by about 60 percent, with substantial increases in staff. We have overhauled, for the first time in 20 years, the plans for schools, in What’s the Plan Stan?, and the week after next we will launch a national campaign of information about civil defence. An enormous amount has been done, and that member should respect the effort and work of local civil defence and emergency groups in contributing to the safety of New Zealanders.

Hon Dr Michael Cullen: Are these increases in civil defence staff precisely the kinds of increases in bureaucrats that the National Party spends most days in this House attacking?

Hon RICK BARKER: I can confirm that the National Party has opposed increases in civil servants and Government staff, but I can also say that it is identifying this increase in staff as a restructuring of civil defence when it is quite different from the restructuring we had under a National Government, which was chop, slash, and hack into the civil service of this country.

Hon Dr Nick Smith: Does he stand by his press release of April this year in response to concern from National about the state of preparedness of civil defence when he said: “Never before has Civil Defence in New Zealand had this kind of support from New Zealand’s 86 local councils.”, when 19 councils in Wellington and Canterbury describe his plan as dysfunctional, fatally flawed, and illegal; and is it not the truth that despite the doubling of the budget, we have never seen civil defence in such a confused and dysfunctional state?

Hon RICK BARKER: I reject the criticism by that member entirely, and I stand by my earlier press release. Yes, we have done a great deal, and I think if one goes to any civil defence group in New Zealand—and I have been to a number—one will see that they say without equivocation that things are much better than they have been in the past. We have better plans, we are better resourced, and we will better in the future. Yes, there are some disagreements in some areas, and I will do my level best to ensure that those disagreements are resolved in the near future.

Hon Dr Nick Smith: Why has the Minister told the House this afternoon that the concerns of Canterbury and Wellington civil defence were those of 19 months ago and have now been addressed, when Canterbury on National Radio yesterday morning and Wellington on National Radio this morning made it abundantly clear that they think we are taking undue risks with our lack of preparedness of civil defence. Why did he mislead the House?

Hon RICK BARKER: I take exception to that member saying I misled the House.

Madam SPEAKER: Is the member asking the member to withdraw and apologise for the comment?

Hon RICK BARKER: Yes, I am.

Gerry Brownlee: I raise a point of order, Madam Speaker. This is question time, and this man is a Minister. He was simply asked why he indicated earlier today, in the same set of questions, that the positions taken by Canterbury and Wellington were 19 months old; and why, when confronted by my colleague Dr Nick Smith in order to acquaint him with the fact that the comments were made yesterday and again this morning, has he taken offence? How on earth can he take offence in that regard? This is question time, for goodness’ sake!

Hon Dr Michael Cullen: I raise a point of order, Madam Speaker. I do not very often agree with the Opposition, but in this case it is echoing, I think, an important point, which the Opposition itself often gets confused, and that is the difference between misleading, and deliberately misleading. The member opposite is allowed to claim that a Minister has misled the House. If we were to raise points of order about misleading questions, I would be on my feet after just about every supplementary question in this House.

Madam SPEAKER: Yes.

Hon RICK BARKER: I stand by the comments I made before that the criticism from Wellington was, as I understand it from the best advice, at least 9 months ago, about the draft plan. The subsequent plan that was released makes them feel much more comfortable with the position. In respect of the criticism from Canterbury, it is about language. For example, the Civil Defence Emergency Management Act uses the word “emergency”; the plan lists “civil defence emergency”, and they have said that the plan is fatally flawed. Crown Law opinion disagrees with them emphatically, and I am happy to rely on Crown Law opinion.

Hon Dr Nick Smith: Why is he saying there will be no changes in the plan for at least 2 years, until it is reviewed, when there is widespread concern from councils, which say the plan is fatally flawed and dysfunctional; and what on earth are New Zealanders meant to do in the event of a civil emergency in the next 2 years before the plan is fixed?

Hon RICK BARKER: I repeat: the statement about the plan being fatally flawed was by the Wellington council at the time the draft plan was put out. The plan has been updated. The concerns they raised have been addressed, and they now find the plan quite satisfactory. In respect of another point of view, I go back to it and say that the national plan as it stands is an adequate description of the current understanding of the arrangements that are in place for managing national emergencies. That is the view of the local government group, and I support that. That is exactly the case.

Hon Dr Nick Smith: I seek leave of the House to table the transcript of Radio New Zealand this morning from the Wellington civil defence coordinator, who, in contrast to the Minister’s comments, made it absolutely plain that the plan was totally unsatisfactory.

Leave granted.

Labour Force—Increased Participation

11. GEORGINA BEYER (Labour) to the Minister for Social Development and Employment: What reports has he received on increased participation in the labour force?

Hon DAVID BENSON-POPE (Minister for Social Development and Employment): I have seen the household labour force survey for the March 2006 quarter, which shows that the Government’s aim of increasing labour market participation is clearly on track. In the March quarter we had the highest-ever recorded rate of labour force participation, at 68.5 percent, and the highest-ever recorded level of employment, with 2.1 million New Zealanders now in work—that is up 23,000 this quarter, and up 313,000 since 1999. That is around 135 additional New Zealanders in work each day, every day, since 1999. Thirdly, we have the lowest level of underemployment—that is, people who want to work more hours and are unable to.

Georgina Beyer: What specific changes have occurred with regard to labour market participation?

Hon DAVID BENSON-POPE: Particular highlights of the household labour force survey are that female employment increased at above-average rates, and is at a record high; there was a significant shift from part-time to full-time employment; Mâori employment is at a record high; and for those aged between 20 and 24 years employment levels rose by 10.3 percent in the last year, and the participation rate of that cohort rose sharply to 78.9 percent.

Georgina Beyer: What initiatives has he seen that might put increased participation at risk?

Hon DAVID BENSON-POPE: I have seen a member’s bill in the name of Wayne Mapp that proposes to make the decision to enter employment or change jobs more risky and less secure. In particular, for those groups making a decision about whether to enter the labour force for the first time, such as youth, or about to return to the labour force—for example, women—and for groups such as Mâori, who are disproportionately represented in the numbers of long-term unemployed, the prospect of being dismissed within 90 days for no reason whatsoever must be a deterrent to labour force participation.

Peter Brown: Is it not true that young people aged 15 to 19 are overly represented in the unemployment figures, and what effect does he believe abolishing the minimum youth wage will have on their employment?

Hon DAVID BENSON-POPE: I do not have any information about the speculative results of such a change.

Peter Brown: I raise a point of order, Madam Speaker. I admit there were two parts to the question, but I think that at least one part should have been answered: “Is it not true that young people are highly represented in the unemployment figures?”.

Hon DAVID BENSON-POPE: The member will be only too aware of the efforts that Work and Income New Zealand, and the Ministry of Social Development generally, are making to further increase the participation rates of young people in the workforce.

Taito Phillip Field—Conflicts of Interest Report

12. Dr the Hon LOCKWOOD SMITH (National—Rodney) to the Prime Minister: Has Noel Ingram QC received a response from Taito Phillip Field to the draft inquiry report into alleged conflict of interest?

Rt Hon HELEN CLARK (Prime Minister): That is a matter for Mr Ingram QC. He is not directed by me.

Dr the Hon Lockwood Smith: What has the head of her department, Mr Maarten Wevers, told her about the draft inquiry report and its preliminary findings in the last 3 weeks, given that she told Parliament last week that Mr Wevers had inquired about it from time to time?

Rt Hon HELEN CLARK: Nothing.

Dr the Hon Lockwood Smith: Does the Prime Minister expect this House to believe that she has not been briefed at all by her head of department on the potential consequences of the criticisms in the draft Ingram report?


Dr the Hon Lockwood Smith: Does she mean, then, that just as with the billion-dollar Telecom leak, she has told her officials she does not want to know the truth?

Rt Hon HELEN CLARK: I believe in giving those who are charged with making inquiries the independence to make them.

Dr the Hon Lockwood Smith: Why does she believe her initial estimate of the time needed for the inquiry, 9 working days, was so wrong, when now almost 8 months have elapsed?

Rt Hon HELEN CLARK: Inquiries must always take the time required to get to the root of the matter.

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

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