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Questions And Answers - Tuesday, 23 May 2006

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

Tuesday, 23 MAY 2006
Questions for Oral Answer
Questions to Ministers

1. Telecom New Zealand—Communications, Minister's Statement on Dividends
2. Question No. 2 to Minister Working for Families Package—Number of Families
3. Tax Cuts—Finance, Minister’s Comments
4. Question No. 4 to Minister Māori Affairs—Reallocation of Money
5. Waikato River—Government Negotiations with Tainui
6. Exporters—Government Assistance
7. Taxation, Overseas Investment—Guinness Peat Group Exemption
8. Cabinet Documents—State Services Commissioner Inquiry
9. Quality Regulation Review—Small Business Advisory Group
10. Roading Projects, New Funding—Traffic Volumes
11. Helplines—Performance
12. Quality Regulation Review—Key Features and Response

Questions for Oral Answer

Questions to Ministers

Telecom New Zealand—Communications, Minister's Statement on Dividends

1. Dr DON BRASH (Leader of the Opposition) to the Prime Minister: Does she believe the Hon David Cunliffe was correct to have made the statements he made last week regarding Telecom’s dividend policy; if so, why?

Rt Hon HELEN CLARK (Prime Minister): I consider that the Minister was commenting generally, as many of us have. I await the Securities Commission’s findings.

Dr Don Brash: Does the Prime Minister accept that the Hon David Cunliffe’s comments wiped $200 million of value off the Telecom shares held by Kiwi mums and dads, and that it should have been obvious to him that his comments would have such an effect; if not, why not?

Rt Hon HELEN CLARK: I await the Securities Commission’s findings, but I do note that Telecom today is trading higher than it was before the comments were made.

Dr Don Brash: Is it not correct that the Hon David Cunliffe has access to material that could—and, indeed, should—be considered inside information, and that his statement directly resulted in a very large loss for thousands of ordinary Kiwi shareholders in Telecom; if so, how can she possibly believe it is acceptable, in any way, for him to comment on Telecom’s dividend policy?

Rt Hon HELEN CLARK: I am surprised the Leader of the Opposition does not accept the word of the chair of Telecom, who said he had not given the Minister any indications of the company’s dividend plans.

Dr Don Brash: Was the Prime Minister aware prior to making her comments defending the Hon David Cunliffe that last year he flagrantly breached an obligation of confidentiality and inappropriately passed to the Commerce Commission confidential information supplied to him by Vodafone and Telecom, which the Commerce Commission intended to release, until it was restrained from doing so by the High Court?

Rt Hon HELEN CLARK: I have no such advice.

Dr Don Brash: What steps, if any, has the Prime Minister taken to address the very serious comments made by Justice Ronald Young in relation to the Hon David Cunliffe’s actions last year, namely: “Vodafone’s concern is that the Minister, in giving the confidential information to the Commerce Commission, breached what they say is their right to confidentiality with regard to the information. I agree with Vodafone’s submission.”?

Rt Hon HELEN CLARK: I have been advised that at all times the Minister acted on advice.

Dr Don Brash: Does the Prime Minister agree the Hon David Cunliffe’s record so far as Minister of Communications suggests he has an appalling and unacceptable grasp of his responsibility as a Minister in a commercially sensitive sector; if not, why not?

Rt Hon HELEN CLARK: No, and indeed I have observed to date that Mr Cunliffe’s performance in this House has been a good deal more successful than the member’s.

Dr Don Brash: I seek leave to table a High Court judgment dated 12 October 2005 that castigates the Hon David Cunliffe for releasing information supplied to him confidentially by Vodafone.

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

Question No. 2 to Minister

JOHN KEY (National—Helensville): I raise a point of order, Madam Speaker. I raise it in relation to question No. 2, and ask whether the question is indeed in order. The question asks how many New Zealand families will receive targeted tax relief through the Working for Families package. The Government cannot possibly know the answer to that question. We know it does not know, because it embarked on a $21 million advertising campaign. It is not possible for the Government to work out the take-up rate for that package, but we know that the take-up rate has been disappointing. Any answer the Minister attempts to give to that question will simply be pie in the sky, and should be ignored by everyone.

Madam SPEAKER: That is not a valid point of order; it is a matter of debate.

Working for Families Package—Number of Families

2. GEORGINA BEYER (Labour) to the Minister for Social Development and Employment: How many New Zealand families will receive targeted tax relief through the Working for Families package?

Hon DAVID BENSON-POPE (Minister for Social Development and Employment): I am pleased to inform the House that new Treasury estimates show that 359,000 families with dependant children will be eligible for family assistance when the Working for Families package is fully rolled out. That is three out of every four New Zealand families with dependant children.

Georgina Beyer: What difference has the Working for Families tax relief made, in comparison with Australia’s tax situation?

Hon DAVID BENSON-POPE: The OECD confirms that for an average person, the overall tax take—taking into account all Government contributions, transfers, and tax credits—as a proportion of gross earnings, is already lower in New Zealand than in Australia. For a family with children, the Working for Families package has made a significant difference. For a single-earner family with two children on average earnings, Working for Families has taken New Zealand from having the eight lowest OECD tax rate to having the fifth lowest, which puts us one place ahead of Australia. The 1 April extension of Working for Families will further reduce the overall tax rate. If the rankings of other countries remain unchanged, New Zealand will be ranked lowest in the OECD.

Georgina Beyer: What reports has the Minister seen on alternatives to Working for Families?

Hon DAVID BENSON-POPE: I have seen reports that National would borrow billions of dollars and cut health and education spending, to deliver misguided, badly targeted tax cuts. What I haven’t—[Interruption]

Madam SPEAKER: Would the member sit down, please. It is impossible to hear the Minister’s answer. I remind members that interjection are permitted; barracking is not.

Hon DAVID BENSON-POPE: I have seen reports that National would borrow billions of dollars and cut health and education spending, to deliver misguided tax cuts. What I have not seen is a serious alternative approach to tax relief that tells New Zealand families whether they would lose the tax relief they currently get under Working for Families, to pay for tax cuts for high-income earners.

Hon Dr Nick Smith: I raise a point of order, Madam Speaker. I know that you are very strict with members on this side of the House in terms of whether questions are directed to the correct Minister. We know that Labour is desperate to re-jig its Working for Families package as a tax initiative rather than a welfare initiative. But I would like you to clarify that the Minister’s entire answer both to this question and the previous question should rightly be in the hands of the Minister of Revenue—the “Minister of Tax”. I simply ask you to enforce the Standing Order that relates to ministerial responsibility.

Madam SPEAKER: I thank the member. I, of course, was unable to hear much of the last answer. Would the Minister please repeat it.

Hon DAVID BENSON-POPE: I have seen reports that National would borrow billions of dollars and cut health and education spending, to deliver misguided and badly targeted tax cuts. What I have not seen is a serious alternative approach to targeted tax relief that tells New Zealand families whether they would lose the tax relief they currently get under Working for Families, to pay for tax cuts for higher-income earners. I invite the National Party to come clean on what its real policy for working families is.

Madam SPEAKER: I thank the member. The answer, from what I could hear, seemed to be in order.

Georgina Beyer: What reports has the Minister seen on the effect of Working for Families tax relief on working New Zealanders?

Hon DAVID BENSON-POPE: I have seen a report in the Marlborough Express of 31 March about a one-income family, a couple with three children, who returned from Australia to bring up their children. Ms Gee said: “For us [Working for Families is] fantastic, because we’ve been really struggling on one income. … For the children, it means they will be able to do sports and dancing, things that they love but are quite expensive. We can also use it to buy all the extra warm clothes we need here!”.

Tax Cuts—Finance, Minister’s Comments

3. Dr DON BRASH (Leader of the Opposition) to the Prime Minister: Does she agree with the Hon Dr Michael Cullen’s comments that tax cuts may be affordable “in a year or two’s time, depending on forecasts of revenue.”; if so, what action will she take as Prime Minister to ensure New Zealanders can benefit from tax cuts?

Rt Hon HELEN CLARK (Prime Minister): I agree that the affordability of any initiative in future Budgets depends on forecasts of revenue. As Prime Minister I am proud to lead a Government that has already provided for $6.1 billion of tax relief to families over the next few years.

Dr Don Brash: If tax cuts are unaffordable when we are running an $8.5 billion surplus, with a further $14 billion worth of surpluses conservatively projected for the next 3 years, just how big a Budget surplus does she think New Zealand would need to run before tax cuts, according to her yardstick, would be affordable?

Rt Hon HELEN CLARK: Family tax relief is indeed affordable, and it is much appreciated. I have a letter from a woman who writes: “Today I received confirmation we’re entitled to family assistance of $85 a week. Now we can go to the doctor when we need to, get a haircut when needed, and don’t have to go without meat and the groceries. Thank you for Working for Families.”

Peter Brown: Can we take it from that answer that the Prime Minister agrees with a constituent who rang me the other day and declared himself to be a National Party voter at the last election—[Interruption]

Madam SPEAKER: Members know the rules when members are asking questions. They are on their last warning. Would the member please start again.

Peter Brown: Does the Prime—by noting those answers, does the Prime Minister agree with the constituent who telephoned me the other day—

Gerry Brownlee: I raise a point of order, Madam Speaker. While we are enforcing the Standing Orders, Mr Brown should ask his question by starting with a question word.

Madam SPEAKER: Yes, would the member please ask a question—

Hon Dr Michael Cullen: The question started with the word “does”. That is quite a normal start to a question.

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

Madam SPEAKER: Do you wish to continue this?

Gerry Brownlee: Well, Madam Speaker, you will have to adjudicate. The member said: “Does—noting the Prime Minister’s comments …”, so that is hardly starting with a question.

Madam SPEAKER: If we could allow him to finish it, it might get there.

Peter Brown: I do not mind if that is the attitude of the National Party when it comes to asking questions, but I would just point out that it is childish, petty, and it does this House no good whatsoever.

Madam SPEAKER: I thank the member. That is not a point of order; it is an observation.

Peter Brown: Does the Prime Minister agree with the constituent who telephoned me the other day and declared himself a National Party voter, saying he voted for Bob Clarkson, that Working for Families is no more and no less than targeted tax relief for a very worthwhile sector of our community?

Rt Hon HELEN CLARK: Absolutely, I agree with that constituent. That point of view is substantiated by many messages I have received, including this one that states: “In our household the extra $132 that is received each week has eased the financial pressure substantially. Now when I go to the supermarket I shop knowing there is room in the budget to buy a reasonable amount of groceries for the week.” The National Party might not care about families; this side of the House does.

Dr Don Brash: Does the Prime Minister understand that every dollar of tax her Government needlessly takes from hard-working New Zealanders results in weaker and weaker incentives to work harder, gain skills, and get ahead—precisely the behaviour that New Zealand needs if we are to effect her economic transformation?

Rt Hon HELEN CLARK: No. What I accept is that the substantial investments being made in health, education, policing, and infrastructure are taking this country ahead. I also accept that there is a place for Dr Brash: it is in a retirement home in Australia.

Dr Don Brash: Has she seen Dr Cullen’s public statement that tax cuts would be affordable only if the Government were running an operating surplus of “around 3 percent of GDP”, and can she explain why, when she herself is on record as saying that her Government would aim to run surpluses of “just 1 percent of GDP”, there have been no tax cuts, given that surpluses have been running above that level for at least 3 years?

Rt Hon HELEN CLARK: Yes, I have seen the statement and I shall always defer to the prudence and wisdom of my colleague.

Hon Dr Michael Cullen: In light of the previous question, is the Prime Minister aware that under the National Government of the 1990s the target operating surplus was 3 percent of GDP, despite the fact that there was no superannuation fund to make transfers into?

Rt Hon HELEN CLARK: I am certainly aware of that, and I am also aware of the utterly reckless attitude the National Party takes towards fiscal policy.

Dr Don Brash: Why has her Government backtracked on proposed changes to income tax thresholds that less than a year ago Dr Cullen said would “make the tax system fairer over time”?

Rt Hon HELEN CLARK: The simple answer is that it has not. Dr Brash should read the Budget.

Dr Don Brash: I seek leave to table the speech made by Helen Clark in which she says that her Government would aim to run Budget surpluses of 1 percent of GDP. It is a speech to the New Lynn Rotary Club.

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

Question No. 4 to Minister

TE URUROA FLAVELL (Māori Party—Waiariki): I te tuatahi, e pātai noa ake ana ki a koe Madam Speaker kia waiho tēnei pātai mō āpōpō i te mea, kāore te Minita i konei.

[I seek leave, Madam Speaker, to have this question left for tomorrow because the Minister is not present.]

Madam SPEAKER: The member has asked that the question be left until tomorrow because the Minister is not in the Chamber. I presume that leave is sought. I shall put it. Is there any objection? There is objection. Please ask the question.

Māori Affairs—Reallocation of Money

4. TE URUROA FLAVELL (Māori Party—Waiariki) to the Minister of Māori Affairs: I tukuna ki whea o ngā kaupapa ā-mahi o nāianei te rua tekau mā toru miriona, iwa rau mano taara o te Pūtea, ā, he aha i kore ai i whakapauhia kētia ki ngā kaupapa ā-mahi i whakaritehia i te tuatahi?

[From which existing programmes was the $23.9 million reallocated in the Budget and why was this money not expended on the programmes for which it was originally allocated?]

Hon Dr MICHAEL CULLEN (Leader of the House) on behalf of the Minister of Māori Affairs: If I take the second part of the question first, the money is being expended in the current year on the programmes for which it was originally allocated. The reallocation is forward-looking from 1 July, and the money is reallocated from these current programmes: building capacity in Māori communities, capacity assessment, direct resourcing of local level solutions, local level solutions/ development, whānau development enterprise, whānau development sport and culture, and whānau development action research programmes.

Te Ururoa Flavell: Ka pēhea tōna whakamārama ki te whānau, ki te hapū me te iwi, kei te pūmau tōna kāwanatanga te tuku rawa kia tipu, kia puāwai te mana Māori i runga i te āhua kāore i riro i a ia he pūtea hōu mō taua kaupapa?

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

[How will he explain to whānau, hapū, and iwi that his Government is committed to invest in Māori potential, when he was unable to obtain any new funding whatsoever to do so?]

Hon Dr MICHAEL CULLEN: Funding in the Māori area is significantly larger than it was 6 years ago. The reallocated funding, moving forward from 1 July, will particularly assist in terms of developing and retaining people’s own assets for collective and individual benefit; strengthening leadership and decision making; and building knowledge and growing skills and talents.

Dave Hereora: How has the baseline for Vote Māori Affairs grown since 1999?

Hon Dr MICHAEL CULLEN: The baseline for Vote Māori Affairs in 2006-07 represents $112 million more funding in a year, for investment in Māori development, than in the 1999-2000 year baseline. That has had many positive effects, not least the fact that Māori unemployment has dropped from a record high of 18.9 percent, to 8.6 percent. This is still higher than the Government wants to see it.

Hon Tau Henare: What role did the Minister of Māori Affairs play in advocating the cutting of funding for local level solutions for Māori in this year’s Budget, and was this funding cut because his ministry could not even answer questions from the select committee about the programme, and had no idea what it was spending its money on?

Hon Dr MICHAEL CULLEN: It would be fair to say there have been some difficulties with that programme. That is partly why money has been reallocated, from 1 July, into new programmes.

Dr Pita Sharples: I runga i te tumeketanga ka topea ngā pūtea manaaki tauira mō ngā tauira iwa mano me te pūtea karahipi mō ngā tauira Māori, Poronīhia hoki, he aha ngā tohutohu i tukuna atu e ia ki tōna Tari, ki te Minita Mātauranga, te Tari Mātauranga rānei?

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

[Regarding the shock axing of the manaaki tauira grants for 9,000 students and the Māori and Polynesian scholarships, what advice did he or his Ministry provide to the Minister or Ministry of Education?]

Hon Dr MICHAEL CULLEN: The money that was involved in that programme, of course, was education money, not Te Puni Kōkiri funding. Interest-free student loans and increases in student allowances will by far more than compensate for the loss of that funding. That funding has been reprioritised into the Te Kotahitanga programme.

Dr Pita Sharples: Kei te mārama ia ki te karere a Te Mana Ākonga e kī rā, kāre ngā mahi poro i te pūtea manaaki tauira i te mahi tautoko kia haere whakamua te Māori, ā, kei te whakapono rānei a ia, he moumou tāima noa iho te hui i te taha o ngā tauira Māori mēnā kāre, he aha ngā hui i whakatūngia?

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

[Is he aware of the release from Te Mana Ākonga stating that cuts to manaaki tauira do nothing to support Māori advancement, or does he believe that consultation with Māori students is a waste of time; if not, what consultation has taken place?]

Hon Dr MICHAEL CULLEN: I am not aware of what level of consultation occurred. I am aware that the administration cost of the manaaki tauira programme was very high compared with the amount of money that actually found its way to students. In fact, by being reallocated the money will be far more effective in that it will get to the people who actually need it, rather than being spent on officials.

Ron Mark: Has the Minister received any reports of a possible coalition between the Māori Party and National in a National-led Government, and how would such an arrangement affect the axing of manaaki tauira grants and scholarships; and how does he predict it would affect the baseline funding for Te Puni Kōkiri, given that one of those partners would want to dissolve Te Puni Kōkiri—

Madam SPEAKER: The member knows that the Minister cannot be responsible for any of those political arrangements. If the member would like to characterise his question without that, he is free to do so.

Ron Mark: Has he read any reports of possible future governance arrangements in this country that involve parties that want to dissolve Te Puni Kōkiri and extinguish Māori representation in this House, and how would that affect funding for Te Puni Kōkiri in the future?

Madam SPEAKER: No, that question is not related to the original question, I am sorry.

Ron Mark: I raise a point of order, Madam Speaker. The proponents of three supplementary questions that have been asked extended the original question to bring into discussion the baseline funding for Te Puni Kōkiri, the axing of the manaaki tauira grants and scholarships, and what the Minister would say to Māori iwi and whānau. Those supplementary questions brought those issues into this current question, and I believe that it is perfectly appropriate for the Minister to further comment on those points, his having already been asked to comment on them.

Madam SPEAKER: I think that if the member narrowed his question—it is certainly true that the educational aspect of it has been brought in—it would be more in order. But the question was an extraordinarily broad one. I will take another supplementary question.

Ron Mark: What other risks does the Minister see to scholarship funding for Māori students, particularly the manaaki tauira grants, and baseline funding for Te Puni Kōkiri, in the foreseeable future?

Ron Mark: What other risks does the Minister see to scholarship funding for Māori students, particularly manaaki tauira grants. and baseline funding for Te Puni Kōkiri, in the foreseeable future?

Hon Dr MICHAEL CULLEN: There have certainly been suggestions that Te Puni Kōkiri should fundamentally be abolished—and I see Mr Henare nodding his head in agreement with that—that any separate funding at all for Māori should be abolished, and that the Māori seats should be abolished. In return for this generosity towards Māori, Mrs Turia has stated that National is better for Māori than Labour is.

Te Ururoa Flavell: Kei te whakaae te Minita, nā te wehewehe, te kore pā hoki o tōna tari me te iwi Māori e rawa kore ana, kāore i tukuna atu te rua tekau mā toru miriona, iwa rau mano taara mō ngā kaupapa ā-mahi; ā, mēnā kāore, he aha ai?

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

[Would the Minister agree that the reallocation of $23.9 million is the result of his ministry losing touch with ordinary Māori in need; if not why not?]

Hon Dr MICHAEL CULLEN: No, I do not agree with that, at all. Indeed, the results speak for themselves in terms of increased educational participation, reduced unemployment, increased employment, and improvements in longevity of life. This Government has delivered in those respects. Those are the actual facts on the ground.

Waikato River—Government Negotiations with Tainui

5. GERRY BROWNLEE (Deputy Leader—National) to the Minister in charge of Treaty of Waitangi Negotiations: What stage have Crown negotiations over Tainui claims to the Waikato River reached?

Hon MARK BURTON (Minister in charge of Treaty of Waitangi Negotiations): Since signing terms of negotiation in December 2005, the Crown and Waikato Tainui have been engaged in formal negotiations towards the next milestone in the negotiations process—an agreement in principle.

Gerry Brownlee: Has the Crown discussed transferring or formalising ownership or title to the Waikato River in favour of Tainui in negotiations so far?

Hon MARK BURTON: As I have said to the member previously, after similar questions, it has always been the practice of Ministers in charge of Treaty of Waitangi Negotiations not to discuss the content of a current negotiation prior to the release of an agreement in principle, which then allows for the wide community discussion of any such issues.

Gerry Brownlee: Will the Minister release the framework for these discussions and explain why Tainui have been told they cannot talk to us, and whether that is their decision, or the Minister’s?

Hon MARK BURTON: I have no power to direct Tainui negotiators as to how and to whom they talk. For instance, in response to a question from Radio New Zealand, one of the co-negotiators for Tainui expressed an absolute guarantee that the rights and access of all New Zealand citizens would be protected in the negotiation. It is a degree of detail I simply could not give in terms of the undertakings I have given.

Gerry Brownlee: Do we take it from that that the Government is prepared to give away some of the rights of access and usage New Zealanders currently enjoy on the Waikato River in settlement of this matter?

Hon MARK BURTON: I quote from Tukoroirangi Morgan on Radio New Zealand this morning: “Public access, private, and third party rights are”—[Interruption] if the member wants to listen to the answer I will answer his question—“are completely and fully protected. It’s always our view to ensure that the rights of individuals”—

Gerry Brownlee: I raise a point of order, Madam Speaker. It would save an awful lot of time if the Minister addressed the question by giving us his opinion, his view, and the Government’s position rather than quoting Tukoroirangi Morgan.

Madam SPEAKER: The Minister had actually addressed that part in answer to a previous question, but if he wishes to reiterate that and then go on, that would be helpful, I think, to the member.

Hon MARK BURTON: The Crown, in all previous negotiations, has always absolutely protected public access. Tuku Morgan, as a co-negotiator for Tainui, while talking this morning explicitly about its claim, gave an absolute guarantee they sought no such breach of public access. I think the answer, without my breaching my obligations of confidentiality, are clear.

Gerry Brownlee: If there is no problem with future access and usage of the river by New Zealanders, why is there so much secrecy around these negotiations, and why can he not release the framework under which the negotiations are being conducted?

Hon MARK BURTON: As the member knows, all such negotiations covering a wide range of detail are held confidentially, always. [Interruption] I refer the member to his former colleague Sir Douglas Graham. He could perhaps seek tutorial from other previous Ministers for treaty negotiations. The more than 20 negotiations are all being conducted according to the same protocols and traditions. At the point of an agreement in principle, all the information will be widely available for any interested party to comment.

Gerry Brownlee: Have negotiations so far included the probability of Tainui being in a position to veto resource consents for water and river usage and other activities in the catchment of the Waikato River?

Hon MARK BURTON: I say to the member again that I will not comment on the content of the negotiations. However—

Dr Wayne Mapp: Give us the framework.

Hon MARK BURTON: —I say to Dr Mapp, I could refer the member to the comments of Tukoroirangi Morgan, who said: “the rights of individuals, whether Māori or non-Māori, are never compromised in any shape or form, and we have always made it absolutely clear to the Crown that we have no intention of infringing, compromising, or obstructing any access to the Waikato River. It is a taonga, a treasure, for all New Zealanders to enjoy.” That was said on Radio New Zealand this morning.

Gerry Brownlee: I raise a point of order, Madam Speaker. I would ask you to consider the answers the Minister has given the House today. It seems somewhat ridiculous that he can stand in the House and say: “I can’t tell Parliament what’s going on, but by the way, just go to a radio bulletin and take Tukoroirangi Morgan’s word for it.” That seems to me to be a totally unacceptable situation for the House to be in.

Hon MARK BURTON: Speaking to the point of order, I point out that, as I have indicated to the member on a number of occasions, I can say what I can say in keeping with my obligations as a negotiator. I was trying to be helpful to the member by drawing his attention to publicly available information that is directly relevant to and appropriate to his concerns.

Madam SPEAKER: I listened carefully to the Minister, and he did address the question. He may not have done so to the satisfaction of the member, but he certainly addressed the question.

Exporters—Government Assistance

6. H V ROSS ROBERTSON (Labour—Manukau East) to the Minister for Economic Development: What steps is the Government taking to assist exporters to enter key overseas markets?

Hon TREVOR MALLARD (Minister for Economic Development): New Zealand firms trying to crack key markets overseas will get extra support from Budget 2006, thanks to a $64.2 million increase in market development assistance. This funding will support Kiwi firms to establish in-market representation—

Hon Members: Take the shirt off.

Hon TREVOR MALLARD: Well, I can see the pale Canterbury man over there. The scheme will work on a co-funding arrangement, and it is a great example of how a Labour-led Government is working in partnership with Kiwi businesses to transform New Zealand into an innovative, high-value economy.

John Key: Are you going to wash it this week?

Hon TREVOR MALLARD: I will not wash it with my white ones.

H V Ross Robertson: What other steps is the Government taking to ensure that our export performance improves?

Hon TREVOR MALLARD: We have designated 2007 as Export Year, in order to focus on productivity and export growth. Through the Beachheads Programme we are providing valuable support to our exporters in overseas markets—support such as office solutions, clustering with other New Zealand companies, access to expert advice and support, and the contacts and networks necessary to grow business. I might say that our performance is not helped by some people in this House.

R Doug Woolerton: Is it correct that the confidence and supply agreement between Labour and New Zealand First commits the Government to prioritising measures to significantly grow our export sector, and is the $64.2 million increase in market development assistance announced in the Budget part of that prioritisation?

Hon TREVOR MALLARD: If the member’s party would like to claim credit for it, I am happy to share it with that party.

Taxation, Overseas Investment—Guinness Peat Group Exemption

7. JOHN KEY (National—Helensville) to the Minister of Finance: Does he stand by his statement, in relation to the proposed new tax on overseas investment, that “GPG is not registered in New Zealand, it’s registered in the United Kingdom and its call for a special exemption makes no sense in terms of tax policy or fairness”; if not, why not?

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

John Key: Why then, only 4 days after making that statement, did the Government announce it was creating a special exemption for companies that satisfy five criteria, the combination of which applies to only one company in the world: Guinness Peat Group?

Hon Dr MICHAEL CULLEN: Because we have been involved in discussions with Guinness Peat Group for some few weeks. Indeed, I offered to Mr Tony Gibbs that officials could talk to the company, some few weeks ago. We have arrived at a satisfactory outcome whereby, if the member cares to read what is proposed, he will find Guinness Peat Group has a transitional period to come within compliance with the new legislation. There is no permanent exemption from the proposals.

John Key: Why is he making legislation that favours investors in just one company in the world, when he has admitted it makes no sense and is unfair, and does he think tax experts will struggle to understand that, under his rules, the new definition of a “grey list” country is New Zealand, Australia, or Guinness Peat Group?

Hon Dr MICHAEL CULLEN: The member did not listen to the answer, but then he never listens to any answers in the House. He always thinks he knows everything. Guinness Peat Group has 5 years to come within the new rules. But if the member understood anything about that company, he would understand why it can, within 5 years, solve its problem with the British tax authorities.

John Key: Will the Government cave in to any other companies if they too start to take out full-page ads in the newspaper, and in that case, which companies?

Hon Dr MICHAEL CULLEN: No. I see suggestions are made that those who set up UK investment trusts should have some kind of transitional exemption. Those trusts are set up deliberately as avoidance mechanisms using the “grey list”, and, as usual, the party that calls for tax cuts supports the avoidance of tax obligations, which raises tax for everybody else in the country.

John Key: Can the Minister confirm that under the proposed new tax rules, individual investors who hold shares costing over $50,000 in the UK, USA, and five other countries will have to pay an additional tax from 1 April next year and that that tax is a new capital gains tax, which will diminish the returns they make on their savings?

Hon Dr MICHAEL CULLEN: I can confirm that people who hold shares outside the “grey list” will, in fact, have a reduction in the existing capital gains tax, which is a 100 percent capital gains tax outside of the “grey list”. The “grey list”—

John Key: I raise a point of order, Madam Speaker.

Madam SPEAKER: There is a point of order, but the Minister has not finished. As I heard the answer, he was going to get to the point that I think the member is about to raise: addressing the question.

John Key: I have asked the Minister that question on numerous occasions and every time he fails to answer it, either in answers to written questions addressed to him or in answers to my oral questions in the House. He fails to admit the obvious, which is that he is making changes to the “grey list” countries and that it is a new tax if an investor owns more than $50,000 in total in shares in those countries. Why can he not admit it is yet another tax grab or capital gains tax? It is not very hard to admit that is the truth.

Madam SPEAKER: That is not a point of order. Obviously, the Speaker cannot direct the answer that members want to be given, but I would like the Minister to please complete his answer in the light of the comments.

Hon Dr MICHAEL CULLEN: I was getting there. Just to excite the member, I was teasing him for a few seconds. A capital gains tax applies within the current overseas investment regime. The exemption from it for the “grey list” countries has been used as a means of tax avoidance. As a consequence, a unified regime will now be applied. That is supported, in some form or another, by almost every tax expert who has looked at that issue.

John Key: Does the Minister think that people who invest their savings for their retirement should be penalised for directly investing their savings outside the tiny sharemarkets of Australia, New Zealand, and Guinness Peat Group; and why is he on this crusade if it is not simply just to get additional taxes, which clearly he does not need?

Hon Dr MICHAEL CULLEN: The overseas investment part of this regime is assumed to be revenue neutral. The rest of the regime will cost some $113 million a year in lost tax revenue. That increases the return to savers overall. But it does deal with the issue of the deliberate creation of tax avoidance vehicles, which that member clearly supports.

John Key: Has he seen the letter dated 11 October 2005 from the Rt Hon Winston Peters to a constituent, in which he stated: “New Zealand First supports savings incentives and is opposed to new taxes.”, and has he seen a letter written on 2 December 2005 by the Hon Peter Dunne to a constituent, stating: “United Future opposes capital gains tax, and I am happy to assure you that as a party we will not support any moves in that direction. I certainly will not be promoting a capital gains tax.”; and, on the basis of that, is he worried about getting the numbers to pass the legislation?

Hon Dr MICHAEL CULLEN: No, no, and no. The only member of this House who I know has supported a general capital gains tax for many years—up to the point that he became a National Party MP—is Dr Donald T Brash.

Cabinet Documents—State Services Commissioner Inquiry

8. GORDON COPELAND (United Future) to the Prime Minister: Does she consider that the State Services Commissioner, Dr Mark Prebble, was right when he stated, in relation to his investigation into the leak of a Cabinet paper to Telecom, “I consider that Telecom is not to blame for its receipt of the document.”?

Rt Hon HELEN CLARK (Prime Minister): I have no basis for disagreement with Dr Prebble, but I note he has passed his report to the police for them to consider whether any further investigation or action is warranted.

Gordon Copeland: Does the Prime Minister believe that the Cabinet paper given to Telecom by Michael Ryan was dishonestly taken and that Mr Peter Garty could easily have ascertained that to be the case, and that therefore because he decided both to retain and photocopy that paper he or the company could be open to prosecution for receiving papers dishonestly taken?

Rt Hon HELEN CLARK: I can see the logic of the member’s statement in the question. I repeat: the matter has been sent to the police for them to form a judgment.

Hon Brian Donnelly: Does the Prime Minister believe that housing the locked bin for confidential material intended for shredding in the messengers’ room, where messengers keep their coats and bags, is the wisest location to prevent such documents from falling into the wrong hands; and has anything been done to relocate that bin?

Rt Hon HELEN CLARK: The head of the Department of the Prime Minister and Cabinet has initiated an outside review of security within the department, and I look forward to the recommendations the reviewer will provide to him in order to see whether security can be improved.

Gordon Copeland: Would the Prime Minister agree that in deciding to take the stolen Cabinet paper from Mr Ryan, thus triggering the need for the Government to announce its unbundling decision at 5 p.m. after news on the stock exchange had closed, it is likely that the value lost by Telecom’s shareholders is greater than it might have been had a decision been released as part of the Budget, as originally planned?

Rt Hon HELEN CLARK: I have been of the view that it was the attitude of Telecom towards competitive measures of this kind that led to the value fall. In respect of Mr Garty’s actions, I think the issue will be whether they were criminal or just deeply unethical.

Quality Regulation Review—Small Business Advisory Group

9. CHRIS TREMAIN (National—Napier) to the Minister of Commerce: Will she act upon suggestions from the business community to the Quality Regulation Taskforce, in light of the fact that the Small Business Advisory Group scored the Minister an average rating of only 5.3 out of 10 for the implementation of its recommendations to reduce regulation?

Hon LIANNE DALZIEL (Minister of Commerce): Given the response of the business community, I am confident the business community will engage with the Government, and we will get results. I expect the Small Business Advisory Group will want to review its score in light of yesterday’s announcements.

Chris Tremain: What confidence can the Minister take from the business community that the Quality Regulation Taskforce will achieve better results than similar reviews conducted by previous Ministers Paul Swain and John Tamihere?

Hon LIANNE DALZIEL: Both of those reviews achieved great results, and these will, too.

Chris Tremain: Is the Minister happy with her score of just two out of 10 from the Small Business Advisory Group on its recommendation that the Government measure and publish the cumulative impact of compliance costs on small business; is that the kind of dismal result we can expect from the Quality Regulation Taskforce?

Hon LIANNE DALZIEL: I will send the member a copy of what the task force will be doing, because that rating will go up tomorrow.

Chris Tremain: Why does the proposed Quality Regulation Taskforce include only bureaucrats as its members, and no businesspeople; does that not confirm the business community’s suspicion that it will be another Labour Government - controlled talkfest that goes nowhere?

Hon LIANNE DALZIEL: Given the response of the four sectors that have been selected for the initial sectoral studies, I say that is not the case. They will be sitting at the table with the Government to resolve the problems they face.

Shane Jones: Has the Minister discussed the review with any members of the Small Business Advisory Group; if so, what was their response?

Hon LIANNE DALZIEL: I had a conference call with the members of the Small Business Advisory Group yesterday afternoon. I am pleased to report to the House that they are very pleased with all aspects of the announcement, and especially that their recommendations that are accepted by the Government will be transferred to the Quality Regulation Taskforce for action.

Dr Wayne Mapp: Will the Government do anything at all to improve on its zero out of 10 rating of the Small Business Advisory Group’s recommendation of probationary periods for new employees, which are the norm in all OECD countries?

Hon LIANNE DALZIEL: The Employment Relations Act already has provisions for probationary periods.

Dr Wayne Mapp: How can the Government expect small business to take it seriously when it goes around saying there are probationary periods in the legislation, given the Minister knows full well they have the full range of personal grievance procedures, which is exactly what the Small Business Advisory Group is concerned about?

Hon LIANNE DALZIEL: The probationary period provisions in the Employment Relations Act require the provisions to be put in writing. That is the problem.

Roading Projects, New Funding—Traffic Volumes

10. JEANETTE FITZSIMONS (Co-Leader—Green) to the Minister of Finance: Is he confident that the additional $1.5 billion being allocated to new roading projects will be justified by growth in traffic volumes, given Transit’s figures showing a significant decrease in traffic on three Auckland motorways and the 5 percent increase in bus patronage reported by Stagecoach?

Hon Dr MICHAEL CULLEN (Minister of Finance): There are already serious safety and congestion problems—not just in Auckland—that need to be fixed. Further traffic growth will merely add to that need, and a 5 percent increase in bus patronage in Auckland certainly would not prevent growth in road usage elsewhere.

Jeanette Fitzsimons: Has the Minister seen the survey commissioned by the Auckland Regional Council last year, in which 87 percent agreed or strongly agreed that better public transport would make it easier to get around Auckland, while only 46 percent agreed the same in relation to more roads; and how does he explain the projected drop in the percentage of funding to be spent on public transport—from 18 percent now to 10 percent in 2014—even before the huge increase in road funding he has just announced?

Hon Dr MICHAEL CULLEN: I can confirm that this Government has increased spending on public transport eight-and-a-half-fold since we became the Government. The fact that people say that public transport will improve their ability to get around Auckland does not mean to say they will actually use that public transport in the numbers that will lead to our having no need for roads. In any case, as I have frequently said, buses also need roads, service vehicles need roads, and goods traffic needs roads. It is not simply a matter of moving passengers around Auckland, in terms of Auckland’s needs.

Hon Mark Gosche: Why has so much additional money been allocated to the Waikato region?

Hon Dr MICHAEL CULLEN: That region is a rapidly growing and key part of the transport infrastructure. It is essential that it has efficient and safe transport links. In particular, the Waikato region has some of the biggest safety issues in terms of roading, and the additional package tends to concentrate particularly on the area of safety, and on a number of other areas relevant to Waikato’s own needs.

Hon Maurice Williamson: Can the Minister confirm that, given the increase in funding in this Budget for the National Land Transport Fund, and given the fact that the sum now exceeds the total amount collected from motor vehicle registration, road-user charges, and petrol—which is something the National Party has been calling for, for years—he will now support a member’s bill that enshrines that increased funding, to ensure it stays that way into the future?

Hon Dr MICHAEL CULLEN: It is not my purpose in life to enshrine the National Party; it is to embalm it.

Keith Locke: When the Minister told me in question time last Wednesday that there would be no new railway lines operating in Auckland, did he mean to disagree with his colleagues Phil Goff and Mark Gosche, both of whom have publicly supported the opening of the Onehunga line; and does he think that the cost of reopening that line, which is estimated to be as low as $3.5 million, can be fitted within the $1.5 billion extra transport funding announced in the Budget?

Hon Dr MICHAEL CULLEN: I do not think I said exactly that, but I did point out that, fundamentally, Auckland does not have a metro rail network, and it would now be impossible to build a metro rail network in Auckland, because it would require tunnelling the entire network that would have to be provided. Without such a network, rail can only be a small part of passenger movement in Auckland—particularly given the fact that Aucklanders do not all travel from the outside of the city to its centre.

Hon Mark Gosche: Why has the Minister allocated so much money to transport rather than spending that money on tax cuts?

Hon Dr MICHAEL CULLEN: This Government believes in investment in fundamental needs in terms of infrastructure, health, and education. Since the famous Australian Budget was announced, I note that in Australia interest rates have risen, consumer confidence has fallen, and the Australian Labor Party—which has certain leadership problems, it must be admitted—has moved out to an 8 percent lead in the preferred two-party vote.

Hon Maurice Williamson: Is the Minister concerned that this increase in money available for spending on land transport and, in particular, roading will be completely wasted if the resource consent process we currently have continues, which sees it now taking over 7 years to consent to a new road—a period of time the chief executive of Transit told the select committee was longer here than in anywhere else in the world—and, if he is concerned, will he be bringing measures to this House to get rid of the red tape that slows down and stops the building of new roads?

Hon Dr MICHAEL CULLEN: On the latter point, no—that is one portfolio I do not hold within the current Government, although I am Acting Minister at the moment, in that respect. In fact, we do not have a problem around consent for any of the roading projects for the next number of years. Basically, we have consent for everything we are able to build over the coming period of time, so the important thing is to proceed with the consents. That is one reason to build greater certainty into the roading programme, so it is known what it is we are trying to get consent for.

Jeanette Fitzsimons: Why does the Minister think buses will need more roads in the future than now, when the plan is to spend less and less of the transport budget on public transport after this year; and, anyway, can he name one major urban centre in New Zealand where existing roads would not be perfectly adequate for more buses if more people left their cars at home and used public transport?

Hon Dr MICHAEL CULLEN: The member continues to make the mistake that it is only a matter of moving people around from one place to another, rather than moving a whole range of goods and services, as well. In a modern economy, people do not all sit at home, self-sufficient—weaving their own baskets and making their own bread. In a modern economy, goods and services are swapped around, and a great deal of Auckland’s traffic consists of doing precisely that. One of the reasons for what the member is describing is that we are preserving or expanding the amount of money spent on roads; we are not reducing the amount of money spent on public transport. Members should watch this space in terms of further issues around rail.

Peter Brown: Does the Minister accept that New Zealand roading has suffered years of neglect, particularly under the National Government; and does the Minister also accept that if we want to develop this economy, we must address our roading infrastructure problems?

Hon Dr MICHAEL CULLEN: What the Government is committed to is, in effect, bringing up our investment in land transport to somewhere around the OECD average, as a percentage of GDP; whereas under the National Government that investment was barely more than half of the OECD average.[Interruption]

Hon Maurice Williamson: That’s not true.

Hon Dr MICHAEL CULLEN: It was about 0.8 percent.

Hon Maurice Williamson: It was 1.3, and it was—

Hon Dr MICHAEL CULLEN: It was not 1.3 percent on land transport; it was 0.8 percent. In a country that is long and stringy—if we wish to compare ourselves with Hong Kong or Singapore—it is remarkable that we do not spend more than the OECD average, rather than less.

Jeanette Fitzsimons: Why does the Minister think it makes sense to allow public transport spending to decline, as a proportion of the total, while spending on new roads is vastly increased, when our dilapidated trains and buses in the main cities are full at rush hour now—and demand is growing—the use of motorways is starting to decline, the public has said it wants better public transport services in preference to more roads, and the price of oil keeps going up?

Hon Dr MICHAEL CULLEN: In fact, if the buses are fuller, the bus operators get a bigger subsidy, because that is the way the subsidy regime operates on the public transport network. Also, if the buses are fuller, one hopes that the private companies running those buses are then making a profit sufficient that they can invest in additional buses. The Government does not own the local public transport systems, and it will not write a blank cheque for what are largely foreign-owned businesses—even though now, of course, they have been overtaken by Infratil, which is a wonderful company for arguing that the Government should fund all its monopoly profits, wherever they exist.

Keith Locke: I seek leave to table a map, published by the Auckland Regional Council, that shows cross-town rail routes on the plans—not only the Penrose to Onehunga route I referred to in my question but also the Onehunga to Avondale route, and the Manukau through to East Tāmaki, Botany Downs, and Pakuranga route.

Leave granted.


11. JUDITH COLLINS (National—Clevedon) to the Minister for Social Development and Employment: Is he satisfied with the performance of helplines funded through the Ministry of Social Development and Employment?

Hon DAVID BENSON-POPE (Minister for Social Development and Employment): Yes. The Ministry of Social Development and Employment believes that it is important to provide families and family members timely, meaningful, and accurate information about Government and community services. The ministry funds a continuum of services to do so, from providing print and web - based material and supporting community-based advice services, like the New Zealand Association of Citizens Advice Bureaux, to the development of dedicated, 7-day-a-week, staffed helplines. The ministry currently funds only one such dedicated helpline, the 211 family helpline, which has been piloted in the Bay of Plenty. I am advised that the pilot, on average, answered 96 percent of calls within 20 seconds.

Judith Collins: Why has he persisted with the largely redundant 211 helpline, which is not cost-effective, receives only 36 calls a day, and encroaches on the good work done by our voluntary sector, when, on the other hand, his Government is scrapping PlunketLine?

Hon DAVID BENSON-POPE: The services provided by the 211 helpline are fundamentally quite different from the citizens advice bureau advice. It is important to regard the 211 family helpline as rather like a roadside rescue service for families who want information and services by phone, to deal with family difficulty. I am happy to confirm that the Association of Citizens Advice Bureaux receives more than half a million dollars in Government funding annually, and I am not aware of any plans, at this point, to reduce that funding.

Steve Chadwick: What services does the 211 family helpline link to?

Hon DAVID BENSON-POPE: The 211 family helpline pilot draws on a database of around 6,500 community and Government social services it can refer people to. The family and community services group within the Ministry of Social Development and Employment that is conducting the pilot is working closely with the non-governmental organisation sector, and I am advised that the overwhelming majority of non-governmental organisations are strongly supportive of the 211 initiative.

Paula Bennett: Does he think it is good value for taxpayers that calls to this service are costing $52 per call for 12 staff members to answer, on average, three calls a day, or is this just another example of waste by big government, when the voluntary and community sector can do a better job for less money?

Hon DAVID BENSON-POPE: I know that the voluntary sector is substantially funded by a menu of Government organisations. I am able to confirm that in the period from 20 March 2005 to 15 May 2006 the 211 helpline answered 15,918 calls.

Judith Collins: Why are taxpayers funding a service where each staff member answers, on average, only three calls per day, and that costs over $50 per call?

Hon DAVID BENSON-POPE: That is not the advice I have. It is important to realise that the hours this service operates are substantially wider than the service provided by the Association of Citizens Advice Bureaux. In fact, that organisation, as I assume the member knows, operates from 10 a.m. until 2 p.m., 5 days a week, while the 211 helpline provides a community service from 8 a.m. until 9 p.m., 7 days a week. I would be delighted to offer the member a briefing about the difference between the organisations, if she would like to find out the facts of the matter.

Judith Collins: I seek the leave of the House to table the Minister’s own answer to written questions, which shows how—

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

Judith Collins: Why has the service continued to be extended, in light of the low number of calls received, and can he assure the House that this wastage will not be continued or extended again when the service comes up for evaluation in June this year?

Hon DAVID BENSON-POPE: I refer the member to my earlier answer in terms of the discussions with the non-governmental organisations. Decisions will be made about extension when the evaluation is complete.

David Bennett: How does the Minister justify this wasteful expense when his pilot scheme, which covers only the Bay of Plenty, costs around $600,000 per year, and the Association of Citizens Advice Bureaux receives only $805,000 to cover the whole country?

Hon DAVID BENSON-POPE: I do not believe that providing good assistance and advice to families is wasteful expense. I find it ironic to have questions like that from a party that, with tax cuts, would not be able to fund any such services.

Quality Regulation Review—Key Features and Response

12. MARYAN STREET (Labour) to the Minister of Commerce: What are the key features of the quality regulation review announced yesterday and what has been the response?

Hon LIANNE DALZIEL (Minister of Commerce): The Quality Regulation Taskforce will meet next week to begin work on overlaps between regulatory frameworks, sector studies, and fast-track process for change. The New Zealand Herald this morning stated that this task force with teeth has won applause from leading figures in industry. The only collective groan that was audible, we were told, was from the Opposition, which shows just how out of touch it is, because this initiative has been welcomed by business leaders from one end of the country to the other.

Maryan Street: What other responses has the Minister received on the quality regulation review?

Hon LIANNE DALZIEL: I have had very positive responses from the Auckland, Wellington, and Christchurch chambers of commerce, but I particularly acknowledge the chief executive of the Otago chamber of commerce, who stated: “The Minister is on the right track. She is saying all the right things which should be signalling to the business community she does mean action. We agree with the Minister—we are in it together, now let’s get on with it.”

Peter Brown: Why has the Minister picked on the food and beverage sector, the wine industry, the retail sector, and the hospitality sector to be the first sectors to be part of the review, when many people would have thought it more appropriate to target areas of more public concern, such as transport and health?

Hon LIANNE DALZIEL: The major infrastructure areas the member raises are being dealt with in separate reviews, so those sectors are already being addressed—and the member knows that this Government has poured millions of dollars into transport, which is the example he uses. We have already made the announcement on the telecommunications stocktake. The reason the retail sector is there first is that it wanted to be there. Those sectors want to work with the Government to make a difference.

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