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Questions and Answers - Wednesday, 24 May 2006

( Uncorrected transcript—subject to correction and further editing. For corrected transcripts, please visit: http://www.clerk.parliament.govt.nz/hansard )

Wednesday, 24 May 2006
Questions for Oral Answer
Questions to Ministers

1. Budget 2006—Auckland Issues
2. Cabinet Office Circular—Publicly Listed Companies
3. Fiscal Approach—Alternative
4. Waikato River—Government Negotiations with Tainui
5. Aged Care—Caregivers’ Remuneration
6. Fiscal Strategy Report—Accuracy
7. Schools—Auckland Region
8. Health Providers—Mâori Health
9. Cabinet Documents—State Services Commissioner Inquiry
10. Corrections, Department—Confidence
11. Paid Parental Leave—Uptake
12. Taito Phillip Field—Conflicts of Interest Report


Questions for Oral Answer
Questions to Ministers

Budget 2006—Auckland Issues

1. RODNEY HIDE (Leader—ACT) to the Minister with responsibility for Auckland Issues: What input, if any, did she have into the Budget, and what, if any, were her achievements?

Hon JUDITH TIZARD (Minister with responsibility for Auckland Issues): As Minister with responsibility for Auckland Issues I had discussions with many Ministers across all of the three priority areas that the Government set, including the Minister of Finance, about funding the Government’s priority areas to ensure that Auckland has the social, economic, and environmental infrastructure to make it internationally competitive and still a good place to live.

Rodney Hide: Could she explain to Aucklanders how many cars in 2011 will be able to use the “substantially completed” Mângere Bridge on an unfinished motorway, which is the only extra roading achievement announced for Auckland in the Budget, out of an extra $1.3 billion worth of spending?

Hon JUDITH TIZARD: There is $13.4 billion over the next 5 years being spent on roading and other transport projects. There is a huge list of projects, which include the Auckland northern gateway; State Highway 1, northern busway; State Highway 1, Esmonde Road interchange; major changes around the central motorway junction, including $260 million worth of work being done—

Rodney Hide: It’s a no.

Hon JUDITH TIZARD: I seek leave to table this list, because it is too long to read out.

Leave granted.

Ann Hartley: What is the Government doing for passenger transport in Auckland?

Hon JUDITH TIZARD: After the enormous increase in the first Budget presented by Dr Michael Cullen in the year 2000, which brought in kick-start funding that saw busways all across Auckland instituted, and the first movement on rail transport in more than 30 years, this latest Budget has put in a transport package that guarantees 5 years of funding to see roads—because buses actually need roads—as well as major improvements including the double-tracking of the western line to provide more reliable, integrated public transport across Auckland. That, of course, will get many more cars off the road than building just roads.

Dr Richard Worth: How does she explain the fact that in the year to November 2005, as Minister with responsibility for Auckland Issues, she was the fifth-highest-spending Minister on domestic air travel, at a total of $42,083—more than the Minister of Finance—or is there more than one commercial airport in Auckland?

Hon JUDITH TIZARD: Part of my job as Minister with responsibility for Auckland Issues is talking to the rest of New Zealand about the fact—[Interruption]

Madam SPEAKER: The Minister is entitled to be heard.

Hon JUDITH TIZARD: Part of my role as Minister with responsibility for Auckland Issues is to talk with the rest of New Zealand about the fact that without Auckland being an internationally competitive city, New Zealand’s economy and society would suffer. I am also Associate Minister for Arts, Culture and Heritage, Associate Minister of Commerce, and Minister of Consumer Affairs, and I now have responsibility for the National Library and Archives New Zealand—all of which are nationwide responsibilities. [Interruption]

Madam SPEAKER: Members know that in fact interjections are permitted. When barracking takes over and it is impossible to hear the Minister, that is not permitted.

Keith Locke: As Minister with responsibility for Auckland Issues, did she go beyond supporting currently funded projects, like the double-tracking of the western line she just referred to, and support in the Budget process the Auckland Regional Council’s new priority rail measures, such as the extension of the Britomart line underground to connect with the western line, and the electrification needed to make that a success?

Hon JUDITH TIZARD: I have worked for the last 7 years, and for many years before that, with the Auckland region and with local authorities within Auckland, to develop a regional land transport strategy and the regional passenger transport draft, which was produced by the Auckland Regional Transport Authority about 2 months ago. The Government continues to work with the Auckland Regional Transport Authority, the Auckland Regional Council, the territorial local authorities, business, and communities to see the implementation of all of this. However, the Government will not provide a blank cheque to Auckland; any work in Auckland has to be of benefit to the whole of New Zealand. I am very happy to say that I kept Auckland Central while the members who are asking these questions are mostly list MPs. I am very happy to be judged by the people of Auckland.

Peter Brown: Is it true that the Minister made a bid in this year’s Budget for the establishment of a dancing school in Epsom; if not, why not?

Madam SPEAKER: A short answer would be required.

Hon JUDITH TIZARD: We put forward a number of arts proposals, but arts facilities are primarily a local responsibility. I understand that Auckland sees dancing in Epsom as a relatively low priority, as do the people of New Zealand.

Rodney Hide: Could the Minister—[Interruption]

Madam SPEAKER: The member is entitled to ask his question in silence.

Rodney Hide: Could the Minister explain to Aucklanders, in the 7 long years that she has been the Minister with responsibility for Auckland Issues, which Auckland issues she has identified, analysed, and solved, and does she believe that Auckland’s traffic congestion has increased or decreased since she has been the Minister?

Hon JUDITH TIZARD: I have had an enormously rewarding time for the last 7 years because it is the first time that a Government has focused on Auckland’s needs. We have produced a sustainable cities plan for action, a number of transport programmes, and the Auckland regional economic development strategy, and we will continue to work with Auckland on all of those strategies. I believe that congestion in Auckland has been kept to a reasonable level, considering the fact that every 5 years the population of a city the size of Wellington moves to Auckland.

Rodney Hide: Can she explain to the House her reasons for supporting the Auckland Regional Council in its efforts to take ownership of Watercare Services Ltd from the territorial councils so that its assets could be raided for transport?

Hon JUDITH TIZARD: The water issues were left out deliberately from the local government amendments in 2002. We have continued to work with all of the authorities in Auckland to make sure that Aucklanders have clean, affordable, plentiful water—as we do across all other infrastructure issues—and I will continue to work with them all.

Rodney Hide: I raise a point of order, Madam Speaker. It is a bit tough with this Minister, because I notice that most of the time she never went near the question in terms of addressing it in her answer. But this is actually an important one, because the Minister has been pushing for the ownership of Watercare Services to be shifted. I asked her for her reasons, and she did not go near it. I suggest to you, Madam Speaker, that if question time is to be meaningful, then it is not enough when one asks a question about the ownership of Watercare Services that the Minister says water is important; she actually has to address the question about the ownership of Watercare Services.

Madam SPEAKER: The Minister did address the question relating to Watercare Services. If the member is not satisfied with the answer, then may I suggest he take up the offer I have made to all members in this House and put the matter before the Standing Orders Committee.

Cabinet Office Circular—Publicly Listed Companies

2. Hon BILL ENGLISH (National—Clutha-Southland) to the Prime Minister: What specific circumstances led the Cabinet Office to issue circular CO(02)14 Guidance for Dealing with Information Relating to Publicly Listed Companies?

Rt Hon HELEN CLARK (Prime Minister): A Cabinet minute authorising Treasury and the Cabinet Office to prepare such a circular.

Hon Bill English: Can the Prime Minister confirm that it was her comments regarding Air New Zealand shares while the Government was trying to purchase Air New Zealand that gave rise to the Cabinet Office circular, and is her Minister of Communications, the Hon David Cunliffe, obliged to follow the guidance in that circular?

Rt Hon HELEN CLARK: I can confirm that in the earlier Securities Commission report referred to by the member the Securities Commission expressed great surprise that there had been no guidelines available for Ministers, and that was why the guidelines were prepared. Of course, they are guidelines for Ministers; as I have said on different questions about Cabinet guidelines over many years, they are not laws—they are guidelines.

Hon Bill English: Why does the Prime Minister continue to defend the public statements made by David Cunliffe, when he has clearly breached the Cabinet guidelines; and why would anyone take them seriously if she does not censure her Minister?

Rt Hon HELEN CLARK: Because I do not consider he has clearly breached the guidelines.

Hon Bill English: Do the Cabinet guidelines say: “… Ministers … should act cautiously when dealing with matters relating to a publicly listed company ….”, and: “Market participants may act on statements by Ministers, even if those statements are made without the benefit of confidential information.”; and if the guidelines do not apply to David Cunliffe’s statement on Telecom, whatever could they apply to?

Rt Hon HELEN CLARK: The guidelines are indeed along the lines suggested by the member, but the Minister believes he was cautious.

Hon Bill English: If she believes that the Minister was cautious, does she approve of the climate he has created whereby the chief executive of Vodafone New Zealand Ltd yesterday felt compelled to write a grovelling letter to the Minister expressing regret that a court proceeding had resulted in unexpected criticism of him, and apologising for this very unfortunate situation?

Rt Hon HELEN CLARK: I understand that Vodafone first suggested writing that letter shortly after the court judgment referred to.

Hon Bill English: Is the Prime Minister aware that the letter was written yesterday, not after the court proceeding, and does she consider that investors can trust and give credibility to the Minister of Communications, when he has made public statements that wiped hundreds of millions of dollars off the value of one telephone company, and encouraged another telecommunications company, which he is also responsible for regulating, to write a shamefully grovelling letter to make sure it is on the right side of the Minister in case he says something that affects it?

Rt Hon HELEN CLARK: When I checked the share price before giving answers on this question yesterday, it was clear that at that time the shares were trading higher than they had been before the Minister’s comments, which would not suggest that great value had been wiped off. [Interruption] The second point I make—and I know the Opposition does not like the facts, but I will spell them out—is that shortly after the court case referred to earlier, Vodafone itself had prepared the letter to send. The fact is it was finalised yesterday but had been in draft form for many, many months.

Hon Bill English: I seek leave to table the Cabinet Office circular warning Ministers to act cautiously.

Leave granted.

Hon Bill English: I seek leave to table a letter dated 23 May 2006 from Russell Stanners, Chief Executive of Vodafone, to the Minister of Communications, David Cunliffe, apologising for causing unexpected criticism of him by a High Court judge.

Leave granted.

Hon Bill English: Is the Prime Minister now telling companies that are in industries regulated by her Ministers, and investors in those companies, that any Minister can say anything he or she likes—with any consequence—that breaks her own Cabinet rules, and that is just fine with her because she did it herself?

Rt Hon HELEN CLARK: Obviously not, and certainly I would not tolerate reckless statements of the kind made by Mr English on one matter after another, including his claiming only yesterday that no option of a boys school had been given in the Flat Bush area, when the facts are there was no community support whatsoever for that. Mr English has constantly made reckless comments and made things up.

Fiscal Approach—Alternative

3. SHANE JONES (Labour) to the Minister of Finance: What recent reports, if any, has he received outlining an alternative fiscal approach?

Hon Dr MICHAEL CULLEN (Minister of Finance): I have seen reports calling for very large tax cuts, for increased spending on health and roads, and for the maintenance of spending on education, law and order, and other areas, signalling a return to a borrow-and-hope fiscal approach. I have also seen reports stating that substantial tax cuts are no longer affordable and that an alternative Government would spend less on health. Both these reports came from Dr Brash.

Shane Jones: Has the Minister seen any reports suggesting how to fund such an alternative fiscal approach?

Hon Dr MICHAEL CULLEN: Yes, indeed. I have seen an extraordinarily novel suggestion that is quite unusual in a modern democracy. It states that: “We’re not borrowing for tax cuts; we’re getting the money from offshore.” I repeat that: “We’re not borrowing for tax cuts; we’re getting the money from offshore.” This was said by Jacqui Dean in the pre-election campaign period. It is not clear who was providing—[Interruption] They disown her. She is one of theirs, and she is being treated with contempt. She is not one of the boys on the front row, so she must be treated with contempt. Of course, Jacqui Dean never quite explained who offshore would provide this money that was not being borrowed.

Shane Jones: Has the Minister received any reports of public reaction to alternative fiscal approaches based on large-scale tax cuts?

Hon Dr MICHAEL CULLEN: Yes, I have seen reports showing that in our neighbour country, Australia, consumer confidence has fallen, interest rates have risen, and support for the Government has fallen since the last Budget.

Craig Foss: Can the Minister confirm that the Government will borrow about $6 billion over the next 3 years to pay for items such as Working for Families, interest-free student loans, and one thousand or so more front-line police, or does he criticise borrowing only when attacking the economic vision and ambitions for New Zealand of the National Party?

Hon Dr MICHAEL CULLEN: I understand that there is a new form of eye surgery available, which may give the party opposite vision, but it is a big ask.

John Key: If we are to believe the answers to previous questions that tax cuts are a really bad thing—that they drive down the poll results, they are not good for a Government, and all the other implications he stated before—why, 2 hours after reading a Budget that was his 7th Budget without tax cuts, did he scurry off to Campbell Live and suggest there might be tax cuts in a year or two?

Hon Dr MICHAEL CULLEN: Firstly, I did not scurry to Campbell Live; John Campbell came to my office. Secondly, I did not say that 2 hours after I delivered the Budget. I said it about 2 hours before I delivered the Budget—in the Budget lock-up.

Waikato River—Government Negotiations with Tainui

4. GERRY BROWNLEE (Deputy Leader—National) to the Minister in charge of Treaty of Waitangi Negotiations: Do the Crown negotiations with Tainui over the Waikato River cover the area from Huka Falls to the mouth at Port Waikato, including its waters, banks and beds (and all minerals under them), its streams, tributaries, lakes, aquatic fisheries, vegetation, and flood plains as well as its “metaphysical being”, as defined by Tainui?

Hon MARK BURTON (Minister in charge of Treaty of Waitangi Negotiations): The member appears to be referring to Waikato Tainui’s definition of the river as recorded in the 1995 deed of settlement. The definition is repeated in the terms of negotiation—

Hon Member: Who signed that?

Hon MARK BURTON: Doug Graham for the then National Government. That definition is repeated in the terms of negotiation signed just last December. It is the definition that Waikato Tainui have, and which they bring to the negotiating table.

Gerry Brownlee: Does the area identified by Tainui include the ironsands at Maioro, and can he rule out New Zealand Steel having to pay a royalty for those sands to Tainui in excess of what they currently have agreed?

Hon MARK BURTON: As I have said to the member on numerous occasions, the content of any negotiation is not something I can talk about ahead of an agreement in principle. But, of course, once the agreement in principle is available the member will see what is in it and be able to discuss it as has always been the case, and as is appropriate.

Gerry Brownlee: I raise a point of order, Madam Speaker. Given that the Minister has accepted that the definition I read out at the start is, in fact, the basis on which these negotiations are being conducted, is it fair that he does, in the public interest, indicate whether the ironsands at Maioro are part of that particular claim? After all, that would be in the public interest, were he able to do that. He may not be able to answer the second part because, of course, he will not know how much Tainui want to charge, but at this stage he should indicate whether those sands—those mineral resources—are part of the claim.

Hon MARK BURTON: Speaking to the point of order, Madam Speaker, the member should take care to listen carefully to the answer that I gave. I indicated Tainui’s definition, and I can tell the member that the Crown respects that that is the preferred definition of Waikato Tainui.

Madam SPEAKER: The Minister did address the question. I understand that it obviously did not satisfy the member who asked the question. But the Minister is entitled to address it in that way.

R Doug Woolerton: What assurances can the Minister give that no New Zealander will be faced with economic hardship, or reduced river access, as a result of the Tainui claim?

Hon MARK BURTON: As I indicated in the House yesterday, whilst I cannot comment on the detail of negotiation until an agreement in principle is released, the members can take complete reassurance from the public statement of a co-negotiator that no such claim has any part of Tainui’s engagement in these negotiations. I am happy to reread it to the member.

Hon Member: Read it to us then.

Hon MARK BURTON: Indeed, I will do just that. “Public access, private and third party rights are completely and fully protected. It is always our view to ensure the rights of individuals, whether Mâori or non-Mâori, 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.” That is a statement made on Radio New Zealand yesterday by Tukoroirangi Morgan, a co-negotiator.

Metiria Turei: Does the Minister agree with the comments of the Prime Minister when, in justifying her foreshore and seabed policy, she said: “These areas are important to all New Zealanders and everyone must be able to use and enjoy them now and in the future”; if so, how does he reconcile that statement with his answer to the previous question defending the Tainui River and Te Arawa Lakes settlements, which prove that both title of such land to Mâori and guaranteed public access to that waterway is available, possible, legal, ethical, and just?

Hon MARK BURTON: I do not accept there is any inconsistency in the comments.

Gerry Brownlee: Can the Minister confirm that the negotiations between the Crown and Tainui have been stalled by issues raised by Environment Waikato; and if so, what were those issues?

Hon MARK BURTON: I cannot confirm that it is not the case.

Gerry Brownlee: What role has Environment Waikato had in the discussions between the Government and Tainui so far; and has its opinion on matters relating to co-management of the river been sought by the Government negotiators?

Hon MARK BURTON: Whilst I cannot comment on the content of any current negotiation ahead of an agreement in principle, it is certainly the case that while the Crown negotiates with Tainui—they are the two negotiating partners—I have certainly engaged usefully and constructively with Environment Waikato and will continue to do so.

Gerry Brownlee: Have Taniui approached these negotiations expecting recognition of their ownership and control of the rivers, water, and its minerals; and is the Government considering that particular aspect of the negotiation?

Hon MARK BURTON: Tainui have approached these negotiations, in my experience, in good faith and expecting good faith in return. That is why I cannot comment on the content—

Gerry Brownlee: Why the secrets?

Hon MARK BURTON: Because that is the way all pre-agreement in principle negotiations have taken place since Doug Graham was the Minister in charge of Treaty of Waitangi Negotiations. It is absolutely true.

Aged Care—Caregivers’ Remuneration

5. JUDY TURNER (Deputy Leader—United Future) to the Minister of Health: How has he responded to claims by the New Zealand Nurses Organisation that new funding to the aged-care sector, even if entirely spent on remuneration, will amount to a wage increase for caregivers of only 51 cents an hour on top of the present average rate of $10.85?

Hon DAMIEN O'CONNOR (Acting Minister of Health): The Minister replied by saying that Budget 2006 provided $126 million over 4 years, on top of a single-year boost of $39 million, for the aged-care sector to cover inflation and demographic pressures.

Judy Turner: In light of the impending crisis in aged care, which will in the not too distant future be contributed to by many members of this House, will the Minister be actively encouraging district health boards to pass all their additional funding on to sector providers; if not, why not?

Hon DAMIEN O'CONNOR: This Government has increased the money spent in this area by 45 percent since 1999. The money is paid to the district health boards, and we hope that they will pass this on to providers, but ultimately the issue of wage rates is between the providers, the employers, and the unions themselves.

Barbara Stewart: Is the Minister aware that district health boards are now trying to bundle in with the current A21 review of age-related residential care funding, the ongoing A23 claim, which arose from the successful New Zealand Nurses Organisation’s claim in respect of the multi-employer collective agreement, which the district health boards have refused to discuss with industry groups for over a year; and will that type of blackmail be the basis for passing this Budget money on to the sector?

Hon DAMIEN O'CONNOR: We are very aware of the pressures in this area. That is why we have increased the funding. We would not expect any district health boards to use blackmail techniques, and we would expect them to negotiate in good faith with the providers in this area.

Sue Bradford: Why is the Government refusing to proceed with regulations to cover minimum staffing levels for aged residential care when the sector is clearly in crisis and when outcome-focused certification and contractual regimes simply will not guarantee minimum standards?

Hon DAMIEN O'CONNOR: We have put in place measures to ensure that there are quality assurances in the area of aged care. We have moved, in fact, on some providers that have not met those standards, and we will continue to do that. We do not believe there is a crisis, but we do accept there are pressures in this area.

Judy Turner: Does the Minister have any estimate of the increase in the number of aged-care workers required to meet sector demand by 2020; and how does he expect to meet that requirement in light of the present wage-related workforce crisis?

Hon DAMIEN O'CONNOR: As with everywhere and with every part of the economy, there is an ageing workforce. We are aware of the increasing pressures in this area, and we trust that, collectively, we will be able to work through these matters and make sure we have enough people to do the jobs when needed.

Jo Goodhew: Can the Minister confirm that he has seen the nurses union’s statement on aged-care funding headlined: “Budget leaves aged care out in the cold”; and has he discussed the importance of caucus unity with Maryan Street, after her speech to a union rally outside Parliament yesterday, where she indicated that the funding is inadequate by saying that more needed to be done to increase wages?

Hon DAMIEN O'CONNOR: There is no contradiction there, at all. Ultimately, wage rates are to be negotiated between the providers and the workers themselves. We have put $126 million into this area in this Budget—that is not ignoring the aged-care sector.

Judy Turner: Can the Minister explain why Maryan Street, in the speech she made to the nurses yesterday, reassured nurses by reminding them of the fact that under Labour the minimum wage had gone up several times; and does he think it is acceptable that caregivers in this sector are paid the minimum wage?

Hon DAMIEN O'CONNOR: That member who spoke yesterday is part of a caring Government. We have moved to increase the minimum wage, and to protect workers in every industry. Again, we would like to reiterate the fact that we would love to see wages go up in every area, and we are working to ensure that that happens.

Sue Bradford: Does the Minister feel quite comfortable with the fact that an ever-increasing amount of these extra dollars for the sector is going into private, profit-taking providers, and does the Government ever give consideration to the fact that a better use of Government money might be to take some of that sector back into the public domain?

Hon DAMIEN O'CONNOR: I think there will be, for the most part, private providers in this area, but I do notice that they have been announcing increasing profits and that they are continuing to participate in the market. That would indicate that there are healthy providers, and an opportunity, perhaps, for wages to go up.

Fiscal Strategy Report—Accuracy

6. JOHN KEY (National—Helensville) to the Minister of Finance: Does the Fiscal Strategy Report released last week accurately report the Government’s fiscal intentions?

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

John Key: Does the Minister recall page 48 of the Fiscal Strategy Report, where he says that the Government’s revenue projections have been influenced by “Our decision to inflation- index personal income tax rates”; can we now assume that the decision has been made, post his announcement in Budget 2005, actually to roll out indexation of personal tax cuts in 2008?

Hon Dr MICHAEL CULLEN: That indexation is still built into the forward fiscal forecast.

Hon Mark Gosche: Has he seen any reports of a coherent alternative fiscal strategy?

Hon Dr MICHAEL CULLEN: I have certainly seen a report that confirms a fiscal strategy based around $11 billion in tax cuts, funded by significant borrowing or funds coming from offshore—it is now not clear which it would be—is still being pursued. Another report states that figure was quite wrong. A third suggests large tax cuts may not be affordable, and a fourth suggests they would have been implemented by a mini-Budget after the election. The first was from John Key, the second was from Gerry Brownlee, and the third and fourth were from Dr Brash. None of them look very coherent to me.

John Key: Could he do the country a favour and clarify his position, given that in Budget 2005 he stated unequivocally tax cuts would be rolled out in 2008 with personal indexation, then spent the rest of 2005, and the early part of 2006, telling the country that those indexation changes could now be in jeopardy, but now in Budget 2006 has reaffirmed that they are on; could he answer this simple question: are tax cuts going to be rolled out and indexed in 2008, as he declared in Budget 2005?

Hon Dr MICHAEL CULLEN: But I do not do simple answers. What happens in 2008 will depend very substantially on what happens in terms of revenue over the next year or two. We have a business tax review. But may I read to the member the latest OECD Economic Outlook report from the chief economist. [Interruption] I would love to read it—

Madam SPEAKER: I cannot hear the Minister. Would you please start again.

Hon Dr MICHAEL CULLEN: I would like to read to the member the latest OECD Economic Outlook dated May 2006 from the chief economist of the OECD: “It is important that temporary revenue gains in economic upswings not be used as a pretext for permanent tax cuts and spending increases that exacerbate inflationary pressures and create a legacy of high structural Budget deficits that only become apparent during subsequent downswings.” And he wrote that without knowing John Key!

Madam SPEAKER: I remind both those who ask questions and those who answer them, they should be brief. I also note, given the interjections during that answer, that members cannot expect yes or no answers to their questions.

Hon Mark Gosche: What projections does the Fiscal Strategy Report make about the Crown’s financial position?

Hon Dr MICHAEL CULLEN: The report shows we have moved to a net financial asset position. Including the Superannuation Fund, the Crown’s financial asset position is predicted to be positive by 5 percent of GDP by 2010. Through prudent fiscal management, this Government has finally paid off National’s ”think big” debt and made provision for the future.

John Key: Does he stand by Budget 2005 where it unequivocally states that tax cuts will be indexed and rolled out in 2008?

Hon Dr MICHAEL CULLEN: As I said, we will have that included in the current fiscal forecast. We are also working on a taxation review with the business sector. That may have implications for tax thresholds. We are also working on another set of matters. The member will have to wait. I am sure he is desperately waiting for the tax cut he so needs in order to keep himself in the lifestyle to which he is accustomed.

Peter Brown: Does the Minister recall making this statement in his Budget speech: “over this period the Government will be prepared to issue up to $1.0 billion in infrastructure bonds.”; given that there is minimal reference to that in the Fiscal Strategy Report, when will he be in a position to outline the full details?

Hon Dr MICHAEL CULLEN: It will be some little time before the details are finalised. In the interim that will be managed through the normal Treasury bond issuing system.

John Key: Does the Minister recall telling the Finance and Expenditure Committee: “People who think there should be tax cuts on the back of big surpluses should be taken out and quietly drowned.”; if so, does he also recall telling Mr Campbell on Campbell Live just last week, 2 hours prior to the Budget: “Yes, there might be tax cuts in a year or two, depending on whether we have got big enough surpluses.”?

Hon Dr MICHAEL CULLEN: The first comment was a reference to the continued process of disinformation waged by that member—and, to be fair, I think by my count, three members of the press gallery—that an operating surplus is available for spending on current expenditure. That is precisely what the OECD is referring to. However, because of our splendid fiscal management, if the Inland Revenue Department forecasts are correct, there will be room for changes in business taxation, which will be the priority in the 2008 tax year.

John Key: Can the Minister confirm, in relation to the answer he gave 2 seconds ago, that when he went on Campbell Live and said there may be tax cuts in a year or two, depending on the size of the surplus, he was referring to business tax cuts, not personal tax cuts?

Hon Dr MICHAEL CULLEN: No. I was primarily referring to business taxation cuts, but they may have some implications for personal taxation. The member will simply have to wait with trembling excitement to see how much he will get, on top of his current $50 million of personal wealth, in a tax cut provided by a Labour-led Government.

Schools—Auckland Region

7. MOANA MACKEY (Labour) to the Minister of Education: What reports has he received on the provision of new schools to meet the needs of growth in the Auckland region?

Hon STEVE MAHAREY (Minister of Education): I announced yesterday that this Government will invest $237 million over the next 10 years to build seven new schools in Flat Bush, Manukau City. Those schools are part of the strategy to build approximately 40 new schools in the Auckland area over the next 15 years. This is a fantastic opportunity for a community that is projected to include more than 8,500 school-age children by the year 2020.

Moana Mackey: What else is the Government doing to provide a world-class learning environment for New Zealand students?

Hon STEVE MAHAREY: The Government has announced in this year’s Budget a further capital funding increase for schools of $148.9 million, taking the expenditure to $527.8 million in this financial year. Nationwide, that means eight new schools are to be opened in 2007-08, and 250 new classrooms are to be built for schools with roll growth. Penrose High School and Porirua College will be virtually rebuilt. The planning and big investment we have made in property since 1999 means schools can now use funding to continue modernising their buildings and creating the kinds of environments that we need for learning.

Hon Brian Donnelly: What, in educational parlance, is the difference between a middle school and a junior high school, and, noting that difference, are the year 7 to 10 schools planned for Flat Bush to be middle schools or junior high schools?

Hon STEVE MAHAREY: Probably the term “middle school” is the one that best fits the kind of education that will take place in the new schools in Flat Bush. Of course, that will depend a little on the principals and boards of trustees that are put in place. But that is the vision for the Flat Bush area. A school very close to the area, in Albany, also uses the name “junior high”, and it would identify itself as using a middle school approach to teaching and learning.

Moana Mackey: Why are there no single-sex schools in the Flat Bush announcement?

Hon STEVE MAHAREY: I looked through all 37 submissions yesterday, went back through all of the consultation, and talked to everybody I could possibly get in touch with, to ask why that had not occurred. I found only one person who had asked for it, and he was Bill English.

Health Providers—Mâori Health

8. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: Is it Government policy that all contracted health providers should meet minimum requirements for Mâori health based on the Treaty of Waitangi; if so, what are those minimum requirements?

Hon DAMIEN O'CONNOR (Acting Minister of Health): No. The Labour-led Government is committed to the provision of health services on the basis of need. This will continue to mean a focus on the needs of Mâori, who still trail behind New Zealand averages on most health indicators.

Hon Tony Ryall: Why did the Minister and his colleague Mr Mallard, after the review of race-based policies, decide to keep the numerous Treaty clauses in health contracts with dentists?

Hon DAMIEN O'CONNOR: The needs of Mâori in dental health care are pressing. The facts are that Mâori 5-year-olds are twice as likely to have decayed, missing, or filled teeth than the New Zealand average. That ongoing disparity must be addressed.

Hon Tony Ryall: Why did the Minister and his colleague Mr Mallard, after the review of race-based policies, decide to keep the numerous Treaty clauses in health contracts with optometrists?

Hon DAMIEN O'CONNOR: There are many contracts in place that were negotiated by the previous National Government. Those contracts, when they come up for renegotiation, will have the clauses addressed. There are still huge disparities between the health needs of Mâori and non-Mâori in this country, and we will go on to address those.

Hon Tony Ryall: What does the Government expect optometrists to do differently for Mâori on the basis of the Treaty clauses that the Labour Government inserted?

Hon DAMIEN O'CONNOR: I hope they will provide them with more vision than the current National Party has.

Dr Jonathan Coleman: Why do radiologists and lab technicians require Treaty clauses in their employment contracts; how does reading an X-ray or analysing a blood sample vary by the race of the patient?

Hon DAMIEN O'CONNOR: As I have said, there are a number of contracts in place where those clauses will be addressed when they come up for renegotiation. I remind the House that there are huge disparities between the health needs of Mâori and non-Mâori. We will focus in this area, but those contracts will have those clauses addressed when we renegotiate.

Hon Tony Ryall: Is this not all another example of the Treaty politically correct mumbo-jumbo that has infested this Labour Government’s health system; would it not be better to stop all this waste and provide care for New Zealand children on the basis of need, not race?

Hon DAMIEN O'CONNOR: This Government is providing health care on the basis of need, not on the basis of wealth as the National Party would have it. I have a quotation that states that the Government would recognise the Treaty by ensuring that “public health and disability support services are responsive to Mâori and by continuing to enable greater Mâori participation in the purchase and delivery of health and social services”. That was said by a National health Minister in the late 1990s.

Hon Tony Ryall: I seek leave to table three documents. The first is a recently renewed dental contract that requires a dentist to have separate approaches for Mâori over all others.

Leave granted.

Hon Tony Ryall: The second is a recently renewed contract with optometrists that requires them to have special policies and procedures for Mâori.

Leave granted.

Hon Tony Ryall: The third is the Government’s own document, which says most of the disparity is socio-economic - related, not ethnic.

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

Cabinet Documents—State Services Commissioner Inquiry

9. Hon BRIAN DONNELLY (NZ First) to the Minister of State Services: Is she confident that the State Services Commissioner, Dr Mark Prebble, was correct when he stated, in relation to his investigation into the leak of a Cabinet paper to Telecom, “I consider that neither the Telecom employee nor Telecom has any fault in the acquisition of the document.”?

Hon Dr MICHAEL CULLEN (Leader of the House) on behalf of the Minister of State Services: Yes.

Hon Brian Donnelly: Does she retain that confidence in the wake of the revelation that Peter Garty was heavily criticised by the Securities Commission over his auditing of BNZ’s accounts in the late 1980s and early 1990s, and is she certain that the commissioner took Mr Garty’s history of what the Securities Commission called “creative accounting” into consideration when reaching his conclusions?

Hon Dr MICHAEL CULLEN: I have no information as to whether the State Services Commissioner took those matters into account, but I doubt they were relevant to the actual matter that Dr Prebble determined about the acquisition of the document.

Hon Brian Donnelly: I seek leave to table the article from the recent Independent that outlines the Securities Commission’s findings on Mr Garty’s use of creative accounting.

Leave granted.

Corrections, Department—Confidence

10. SIMON POWER (National—Rangitikei) to the Minister of Corrections: Does he have confidence in his department; if so, why?

Hon DAMIEN O'CONNOR (Minister of Corrections): Yes, but there is always room for improvement.

Simon Power: How can he have confidence in his department, when its own report into the Auckland Central Remand Prison acknowledged that private management had been so effective that the department had adopted some of its improvements, such as more education programmes, staff dedicated to behavioural assessment, physical training, sentence planning, and crime prevention, and why did not any of these innovations ever emerge from the public sector?

Hon DAMIEN O'CONNOR: Many of those initiatives have been taken on board. That facility was just for remand prisoners. It was a new facility. There were opportunities there that are not always available in old facilities. This Government has committed a billion dollars to new prisons throughout this country that will be able to provide these courses and better rehabilitate and reintegrate prisoners into society.

Simon Power: Why should prisons be run only by his department, when in taking over Auckland Central Remand Prison from private management it has added another layer of management, doubled the number of custodial managers, doubled the staff-inmate ratio to keep the unions happy, cut 24-hour health services, and halved the number of visits that inmates are allowed?

Hon DAMIEN O'CONNOR: The cost of running that facility is exactly the same as it was then. The number of visits has remained the same. We have taken on board the useful initiatives, and we will continue to improve the prison service throughout the whole country.

Nandor Tanczos: Is it not the case that Australasian Correctional Management ran the Auckland Central Remand Prison as a sales brochure for private prisons, and can he confirm that that same company has been subject to numerous allegations of abuse relating to its operations in Australia since it no longer needs to run a sales job in that country?

Hon DAMIEN O'CONNOR: I am aware of some of those claims, and I am also aware that the previous National Government was driven by ideology and was attempting to privatise every single part of Government responsibility.

Simon Power: How does he respond to the comments today of John Whitty, National Director, Prisoners Aid and Rehabilitation Society:

“Having visited privately run prisons in the UK and Auckland, it seems obvious that these prisons provide services and programmes that were superior to those in the public sector because public sector managed prisons are large bureaucracies where new initiatives struggle to survive.”?

Hon DAMIEN O'CONNOR: That member is referring to just a remand centre, not a prison that deals with a wide range of challenges. John Whitty has his opinions and, unfortunately, we do have to have large institutions. We are working very hard to reduce the size of, and the need for, large institutions.

Dr Pita Sharples: Is the Minister aware that Te Kaunihera Kaumâtua o Te Whanganui-a-Tara, after contact with the Department of Corrections head, Barry Matthews, to discuss Mâori protocols, has taken the drastic step of recommending that Mâori, including Mâori staff, boycott pôwhiri or whakatau created by the department without consultation with Mâori, and what does he intend to do about that situtation?

Hon DAMIEN O'CONNOR: I am not aware of the claim to boycott all proceedings, but I know that we are working through a process to ensure that people understand what the Mâori protocol is around prisons.

Simon Power: Does he agree with the findings of his department that private management of Auckland Central Remand Prison successfully instilled a culture of professionalism, teamwork, and pride in performance amongst staff because it did not have “the necessary constraints of a Government organisation” and were, therefore, able to “walk the talk”?

Hon DAMIEN O'CONNOR: I think the level of service provided by Department of Corrections officers and prison officers in the public sector is outstanding, given the challenge they have in a very difficult environment. There will always be an ability to improve that service, and we will continue to work on that.

Simon Power: Can he confirm that the department was initially seeking another $3 million to cover the costs of the transition from private to public management of Auckland Central Remand Prison, and can he tell the House how much was actually spent—all for the sake of his Government’s ideological objection to running prisons more effectively?

Hon DAMIEN O'CONNOR: I have not been advised that there were any additional costs. I have been advised that the cost of running that facility is about the same as it was when the prison was under private management.

Ron Mark: Can the Minister confirm that New Zealand First has been engaged in discussions with him regarding the many managerial and policy failures of the Department of Corrections—[Interruption] Is the member going to leave, Madam Speaker?

Madam SPEAKER: No. He did not interject; he laughed. If I threw out everyone who laughed inappropriately, there would be no one left, but I would ask the member to restrain himself.

Simon Power: I apologise.

Madam SPEAKER: Thank you. The member has apologised.

Ron Mark: Can the Minister confirm that New Zealand First has been engaged in discussions with him regarding the many managerial and policy failures of the Department of Corrections, and when will he announce his acceptance of New Zealand First’s request that the time has come for a complete review of the department’s head office in order to ensure that its functions are appropriately positioned and structured for it to better meet its organisational demands—something it has clearly been struggling to do?

Hon DAMIEN O'CONNOR: I will acknowledge that we have had many useful conversations on those issues. I have taken on board many of the recommendations and views of that member, and we are currently in consideration of a number of them.

Simon Power: I seek leave to table four documents from the Department of Corrections that acknowledge that the private management of Auckland Central Remand Prison was very effective indeed.

Leave granted.

Dr Pita Sharples: I seek leave to table a document from Te Kaunihera Kaumâtua o Te Whanganui-a-Tara outlining its policy.

Leave granted.

Paid Parental Leave—Uptake

11. SUE MORONEY (Labour) to the Minister of Labour: What reports, if any, has she received on the uptake of paid parental leave?

Hon RUTH DYSON (Minister of Labour): I have seen a report detailing that, in this March quarter, $22.6 million has been paid to 4,500 recipients. This brings the total paid parental leave payments to $263 million and the total number of recipients to 75,500, since the Labour-led Government introduced the scheme in July 2002.

Sue Moroney: What other recent reports has the Minister seen concerning paid parental leave?

Hon RUTH DYSON: Disappointingly, I have seen a report that suggests we abandon paid parental leave. That suggestion was made by Dr Brash. But I have to admit that, after long opposition to paid parental leave, Dr Brash has performed yet another flaky flip-flop and now fears he supports this great scheme. It may be, though, that it is just another thing on the long list of things that Dr Brash plans to axe in order to pay for the extravagant tax cuts that he advocates.

Taito Phillip Field—Conflicts of Interest Report

12. Dr the Hon LOCKWOOD SMITH (National—Rodney) to the Prime Minister: Why was the deadline for the inquiry into alleged conflicts of interest involving Taito Phillip Field set for 13 days, and what changed to allow this inquiry to take over 8 months with no confirmed date for reporting back?

Rt Hon HELEN CLARK (Prime Minister): Advice received in setting up the inquiry was that that was the appropriate time frame. Obviously, that subsequently proved not to be the case.

Dr the Hon Lockwood Smith: Who in her office has Maarten Wevers briefed on the progress of the Ingram inquiry in the last 4 weeks, given her statement to Parliament 2 weeks ago that he had inquired about the progress of the inquiry from time to time?

Rt Hon HELEN CLARK: My understanding is that Mr Wevers indeed rang the QC’s chamber, after the report appeared in the paper, to say that the report should be coming to the Prime Minister in due course—not progress reports being given to the Dominion Post.

Dr the Hon Lockwood Smith: My question to the Prime Minister asked who in her office the head of the Department of the Prime Minister and Cabinet has briefed on the progress of the Ingram inquiry, when she has acknowledged to this House that he has inquired as to the progress of the inquiry—that is my question.

Rt Hon HELEN CLARK: I have just told the member that seeing the report in the paper, the head of the Department of the Prime Minister and Cabinet phoned Mr Ingram’s chambers to say that comment on the report should come with the report to the Prime Minister. I have spoken personally with Mr Wevers about this.

Dr the Hon Lockwood Smith: Why did the Prime Minister tell this Parliament only a few weeks ago that Mr Wevers had inquired as to progress on the inquiry in order that the Prime Minister could answer questions about the inquiry—a matter she now seems to want to deny today?

Rt Hon HELEN CLARK: Over a long period of time—some 8 months, as the Opposition keeps complaining—questions have been asked in this House about the inquiry, and from time to time the head of the Department of the Prime Minister and Cabinet has inquired as to when it is likely to arrive. That advice is then fed in, if it is available, for me to answer questions in this House. I repeat: I do not want progress reports on substance and on what is being considered; I am awaiting a final report. I note that Opposition members initially complained that Mr Ingram did not have long enough and now they are complaining he has had too long. They should make up their minds.

Dr the Hon Lockwood Smith: Why, when on 27 March the Prime Minister stated she “would certainly be expecting it in the course of this recess” has she not received the report from Noel Ingram almost 2 months later; and, when will we see this report, or is she just hoping that the passage of time will bury it?

Rt Hon HELEN CLARK: No, when that question was answered, indeed the advice I had was that that was the time frame, and that has proved not to be correct.


( Uncorrected transcript—subject to correction and further editing. For corrected transcripts, please visit: http://www.clerk.parliament.govt.nz/hansard )

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