Questions to Ministers

Finance Minister—Confidence

1. JOHN KEY (Leader of the Opposition) to the Prime Minister: Does she have confidence in the Minister of Finance?

Hon Dr MICHAEL CULLEN (Acting Prime Minister): Yes.

John Key: Did the Minister of Finance consult the Prime Minister before he made repeated comments in question time yesterday about having the power under section 12 of the Reserve Bank of New Zealand Act to override the policy targets agreement; if so, what was the Prime Minister’s response to her outgoing Minister of Finance?

Hon Dr MICHAEL CULLEN: No, because the Minister of Finance does not need to consult the Prime Minister to find out what is in the Reserve Bank of New Zealand Act.

John Key: Why does she think the Minister of Finance made such a big deal yesterday in Parliament of drawing attention to section 12?

Hon Dr MICHAEL CULLEN: Because in the light of leave being sought by the Rt Hon Winston Peters to introduce a member’s bill, it was useful to point out to the House that the current Reserve Bank of New Zealand Act contains provisions—much to the surprise, obviously, of many people—other than those that people may think are in it.

Hon Peter Dunne: Can the Prime Minister recall the circumstances in which section 12 of the Reserve Bank of New Zealand Act was inserted into the legislation in 1989, and has she had any discussion with the Minister of Finance about whether the rather extraordinary circumstances envisaged by that section have, in fact, been triggered at this time?

Hon Dr MICHAEL CULLEN: Clearly, section 12 was put in the Act to indicate that in certain circumstances the Governor of the Reserve Bank’s operating within the policy targets agreement would mean he was unable to fulfil other, broader economic objectives. It was, therefore, a modification of the primary objective within the Reserve Bank of New Zealand Act. I recall that at that time National could not make up its mind which way to vote. It was only a threat made by Ruth Richardson to resign as finance spokesperson that led to National supporting the Reserve Bank of New Zealand Act.

John Key: If the Minister of Finance was not trying to send a shot across the bow of Dr Alan Bollard yesterday, why did he bother to come into the House and repeat comments that he had already made outside the House and knew would be publicised on television; and why did he allow leave for Winston Peters to table a bill that Dr Cullen knew was unnecessary because its provisions were already contained in section 12?

Hon Dr MICHAEL CULLEN: Unlike the member opposite, I make a habit of saying the same thing inside the House as I say outside the House. Because the Finance and Expenditure Committee is already seized of an inquiry into monetary policy, I saw no harm in the select committee also considering a bill that dealt with the same matter. I have every confidence that the majority of that select committee will determine that the current framework of the Act is correct.

John Key: In what circumstances would the Government decide to invoke section 12, given that that section was meant to be used in genuine economic emergencies, not just to bail out the failed policies of the Prime Minister’s Minister of Finance?

Hon Dr MICHAEL CULLEN: Those circumstances would be determined at the time. Of course, the only alternative policy that I am aware of at the present time is that Mr English keeps calling for higher interest rates; he believes they should have been put up earlier and higher.

John Key: When the Minister of Finance yesterday floated the idea about the powers of section 12, was that an admission that the intervention that the Reserve Bank has been undertaking—something the Minister of Finance gave the Reserve Bank the power to do—has failed; and is the Minister of Finance aware that the Reserve Bank is currently sitting on a paper loss, as a result of that intervention, in the order of $60 million to $80 million?

Hon Dr MICHAEL CULLEN: Nobody can float the idea of section 12; it is a reality. If the member goes out into the lobby and opens up the Reserve Bank of New Zealand Act 1989, he will find section 12 of that Act.

John Key: Was yesterday’s attempt to float section 12 just another example of what we have seen from the Prime Minister’s Minister of Finance in the last 3 or 4 months—that the Minister will get up on his feet, muse about some idea that he is not really serious about, have his wings clipped or his horns pulled back in, then blame Bill English?

Hon Dr MICHAEL CULLEN: That is the first time I have been accused in this House of being horny, but never mind.

John Key: Does the Prime Minister’s Government still have a bipartisan approach to monetary policy, as her Government has professed time and time again; if so, and if she is serious about her Government invoking the powers of section 12, could the Opposition expect to be consulted on that?

Hon Dr MICHAEL CULLEN: There is no bipartisanship over monetary policy. There is bipartisanship over the framework outlined in the Reserve Bank of New Zealand Act. The policy targets agreement has been agreed successively between Ministers of Finance and the Governor of the Reserve Bank, under both Governments, without any reference to the Opposition spokesperson. If there had been, I would have had quite strong views in the past about the nature of the policy targets agreement that was entered into.

John Key: Does the Prime Minister expect that her Minister of Finance will eventually recognise that the reason interest rates are very high, the reason New Zealand households are paying more for their mortgages, and the reason New Zealand exporters are struggling under a very high exchange rate is that her Minister of Finance has made such a mess of his economic management, and does she think it will be Michael Cullen who resolves that issue for New Zealanders next year, or will it be Phil Goff, the new Minister of Finance?

Hon Dr MICHAEL CULLEN: Dr Cullen will remain the Minister of Finance, I am sure, through to the election and beyond. But what the member has to explain is that while his Opposition spokesperson on finance keeps calling for tighter fiscal policy as the answer to monetary policy problems, the member keeps going around the country promising $2.5 billion a year in tax cuts and more spending in every possible area of public policy. That is called looser fiscal policy.

Numeracy—Students

2. MOANA MACKEY (Labour) to the Minister of Education: What reports has he received on the numeracy of New Zealand students?

Hon STEVE MAHAREY (Minister of Education): It is good news. Research released today shows that the achievement of year 6 maths students has improved because of the Numeracy Professional Development Programme that was begun by the Labour-led Government in the year 2000. Schools involved in these projects have seen that two-thirds of students are either at or above the expected level in adding, subtracting, multiplying, and dividing. The number of students at risk of underachieving in fractions, decimals, and percentages is down from 42 percent in 2002 to 14 percent as a result of this project. Secondary schools have been involved only since 2005, but already the proportion of secondary school students achieving no more than basic level maths has dropped by two-thirds. The results show that investments in good teacher professional development pay off in key areas like this.

Moana Mackey: What else is the Government doing to support professional development for teachers?

Hon STEVE MAHAREY: The Government will invest around $120 million this year in teacher professional development, along with $27 million for projects that are giving teachers the skills to lift numeracy and literacy standards for all students. As a result of this investment, our evaluations are showing major improvements across the 1,700 schools involved, the highest improvement amongst students who were previously the lowest achievers, and a lift in achievement across Māori and Pacific Island students. It is a very, very good project.

Katherine Rich: Can the Minister confirm the study’s disturbing conclusion that one in three kids in the sample left primary school not able to add or subtract at the expected level, and although he basks in the self-congratulation that two-thirds of kids can do this, is basic addition and subtraction not the very least that parents can expect from the school system after their kids have been at primary school for 6 years?

Hon STEVE MAHAREY: The member quite rightly raises the fact that there is still work to be done. She will remember that in the year 1996 the TIMSS report reported on her own Government’s complete and utter failure to support students to reach reasonable levels of numeracy and mathematics. As a result of this work here, I am sure that she is applauding the fact that we are now well and truly going in the right direction. The results that she is talking about will be cured, as opposed to the very, very large numbers who were failing in the 1990s.

Hon Brian Donnelly: Will the Minister confirm that the numeracy development project grew out of the Mathematics and Science Taskforce established in 1998 in response to the very average New Zealand results in the third international study of mathematics and science, or TIMSS, as it is commonly known, with the task force having been initiated at the time by New Zealand First?

Hon STEVE MAHAREY: Yes, I can confirm that the task force grew out of work done by New Zealand First and by that member, in particular. Once again, that shows that even in the 1990s, when the levels of failure were virtually epidemic, it took New Zealand First to take the leadership on this issue from National to make a difference.

Exchange Rate—Government Actions

3. Hon BILL ENGLISH (Deputy Leader—National) to the Minister of Finance: Does he stand by his reported statement that there is “nothing the Government could do about the exchange rate in the short term”; if not, why not?

Hon Dr MICHAEL CULLEN (Minister of Finance): As I have said all along, there is no silver bullet. However, unlike the member, I am prepared to consider ideas that may help the productive sector.

Hon Bill English: Why is it that less than 2 months ago the Minister reappointed Dr Bollard, praised his stewardship of monetary policy, and signed, with Dr Bollard, an unchanged policy targets agreement, when he is now saying that he is willing to entertain new ideas; why did he not put them in the agreement then?

Hon Dr MICHAEL CULLEN: First of all, I have confidence in Dr Bollard’s operation. Secondly, of course, the policy targets agreement is within the framework of the Reserve Bank of New Zealand Act. Given that the Finance and Expenditure Committee was just beginning to undertake an inquiry into the operation of monetary policy, it seemed a particularly inappropriate time to change the policy targets agreement, as the Opposition, which loves to say that it wants to be consulted, has the opportunity to be consulted and to participate in that select committee inquiry.

Hon Mark Gosche: What reports has he seen on the links between the exchange rate and fiscal policy?

Hon Dr MICHAEL CULLEN: I have seen numerous reports of Mr English suggesting that the only solution is to cut Government spending. I have also seen reports of most of his colleagues calling for greater spending on their pet projects—most recently, just today, from Dr Jackie Blue, who called for extra spending by the Ministry of Women’s Affairs. I am sure that that would be a magnificent answer to the problems of monetary policy operation!

Heather Roy: What responsibility does the Minister believe that he and Dr Bollard should accept for interest rates hitting double figures, for the dollar being about to breach US80c, and for the Reserve Bank having blown over $100 million of taxpayers’ money in a foolish attempt to outplay the market?

Hon Dr MICHAEL CULLEN: On the last point, the Reserve Bank is a long-term player in the market, unlike some people, and not a short-term player, and therefore it is most unlikely that it would actually lose money over the longer term. The second point I think I need to make to the member, the House, and the country is that the primary thing that has been happening in recent months is that the US dollar has been going down. It may come as a shock to members of this House, but no operation of fiscal or monetary policy in New Zealand will lift the United States dollar.

R Doug Woolerton: Does the Minister agree that section 12 was actually inserted as a safeguard that could be utilised when facing a particular economic crisis, and given that fact would it not be preferable to avoid such a crisis by having the safeguard built into the primary function of the bank?

Hon Dr MICHAEL CULLEN: I think the problem with setting multiple targets into the primary function of the bank is that, inherently, the bank cannot simultaneously achieve all those primary targets. If one wishes to have accountability for the operation of monetary policy by the governor, he or she has to be held accountable against an achievable target—not a multiplicity of targets, which would probably mean that all would be missed simultaneously.

Hon Bill English: If, as Dr Cullen says, one of the major influences on the high New Zealand dollar is the weakness of the US dollar, just what intervention did he have in mind when yesterday he raised the possibility that he might invoke section 12, override the Governor of the Reserve Bank, and take action himself?

Hon Dr MICHAEL CULLEN: One always has to be very precise. I did not raise the possibility of using section 12; I did not rule out the use of section 12. That is not the same thing.

Hon Bill English: Why is it that after spending 6 months saying that monetary policy did not work, and floating four unsuccessful ideas for attacking house values, the Minister signed a policy target agreement with no change, and reappointed the governor, and then, within 6 weeks of doing that, came along to Parliament and said section 12 is there and could be used and he is too scared to do anything in case the select committee does not like it?

Hon Dr MICHAEL CULLEN: What a silly remark that last one was! On the one hand, National members keep saying they want to be consulted, and when there is a prospect of being consulted they say that the Minister is afraid to act. Just which leg is that member standing on? Every time he makes a statement in public or private, he has two positions in a single sentence—every time. And that is why he reduced the National Party to its lowest-ever vote in 2002—because the public saw through it.

Hon Bill English: Which of the ideas that the Minister has floated should the markets and the people of New Zealand take seriously: the mortgage interest levy, the capital gains tax, the ring-fencing of investment losses on housing; the select committee inquiry; or, now, the use of section 12 whereby he would effectively take control of monetary policy; and since he has not followed through on any of these ideas, what credibility does he think he has on monetary policy?

Hon Dr MICHAEL CULLEN: Firstly, I have never floated the idea of a capital gains tax. The only person in this House in recent times who has floated that idea, apart from the Green Party, is in fact Dr Brash, who was a long-time supporter of a general capital gains tax. Secondly, the mortgage interest rate levy is ruled out. Thirdly, the select committee inquiry is in fact under way. The member may have had a hissy fit, thrown his toys out of the cot, and stamped out of the committee room, but the other people on that select committee are participating in the select committee inquiry. Fourthly, the markets need to be aware, as the governor keeps pointing out, that in fact there are a range of mechanisms, and section 12 is one of those. Finally, as a number of external market commentators have pointed out, the New Zealand dollar can go a long way down from where it is now.

Hon Bill English: Now that Dr Cullen has raised the possibility of invoking section 12, does he now not believe he is obliged to create some certainty by stating either that he certainly will not use it, or by making clear what conditions would apply that would mean he did use it?

Hon Dr MICHAEL CULLEN: It is those who are making money out of speculating New Zealand’s currency who want certainty. It is not my job or that of the governor to create that certainty for them, as the governor himself has pointed out on a number of occasions. If the member wants to come into this House and be the spokesperson for international money market speculators against the New Zealand productive sector, then finally we have found common ground between Mr Key and Mr English.

Hon Bill English: So is it the case now that the Minister is simply speculating about section 12 as part of his little game of trying to scare someone in the markets, as he tried several times in respect of housing; and when is he going to learn the lesson that every time he has tried that, the dollar has gone up, as it has reach record levels today after his comments yesterday—so why does he not just stop and give exporters a break?

Hon Dr MICHAEL CULLEN: Finally, we have managed to get “Mr Angry” on the side of the exporters instead of the financial market speculators, for once. I will take the member through it again: section 12 exists in the Reserve Bank of New Zealand Act. It is not an idea floated by me. It is not an idea, and no Government should tell the financial market speculators when it might use such a provision. Mrs Watanabe, the mythical investor, a Japanese housewife, needs to know that that is what the Reserve Bank of New Zealand Act says.

Oil and Gas Exploration—Royalties

4. JEANETTE FITZSIMONS (Co-Leader—Green) to the Associate Minister of Energy: What is the proposed Government take, including rentals, royalties and taxes, expressed as a percentage of revenue taken from production, that the Government will demand from Exxon Mobil and the OMV consortium, in return for granting rights to pursue their proposed exploration and extraction activities in the Southern Ocean?

Hon HARRY DUYNHOVEN (Associate Minister of Energy): The permits awarded to Exxon Mobil Corporation and the OMV consortium in the Great South Basin are for exploration only. Accordingly, the Government is not anticipating that those permit holders will generate any significant revenue from production alone under those exploration permits. The Government will, however, receive a total combined rental income through annual fees of $683,760 per annum from the permits in that initial exploration period. The Government will also receive significant revenue from the usual company and employee taxation provisions.

Jeanette Fitzsimons: When the Minister said in the Otago Daily Times that the rate would be 45 to 50 percent, was he aware that even war-ravaged Angola has been able to negotiate a 60 percent Government take from its deep-water drilling contracts with international oil companies, which include Exxon Mobil, and that Brazil also has a 60 percent Government take from the revenues of production; and why is New Zealand proposing to settle for less than that in a royalty regime described by him in the Otago Daily Times as one of the cheapest in the world?

Hon HARRY DUYNHOVEN: First, leaving aside the last comment, which I think has not been put in context, and looking at the actual issue, I say the issue of a royalty regime also has to be balanced against prospectivity, the difficulties of production, the remoteness from oil exploration infrastructure, and so on. New Zealand’s regime will generate from the exploration activity, we hope, something in the order of 40 percent of net expenditure in New Zealand, but that has yet to be seen. But in the production phase, obviously a significant amount of revenue will come to New Zealand from the accounting profits royalty regime—20 percent of the accounting profits royalty—and also from the 5 percent ad valorum royalty. That will be substantial. But, overall, one has to balance not only the fiscal regime but also the prospectivity, the costs of production, etc., etc. We think, and the international oil experts who have advised us believe, that we have a very fair regime.

Maryan Street: How does the Government’s take compare with that of other oil-producing countries?

Hon HARRY DUYNHOVEN: When compared in the light of New Zealand’s geographical location, the perceived prospectivity, and the tight nature of the international market for drilling rigs, seismic vessels, and, indeed, skilled personnel, the Government’s total take, which is at around 50 percent of profits, compares very favourably with that of the UK at 30 to 40 percent, the USA for deep-water exploration at 35 to 40 percent, and Australia at 60 percent, where perceived prospectivity is very much higher than it is here.

Gordon Copeland: Would the imposition of any higher levels of rentals, royalties, or taxes than those he has outlined in his answer to the primary question have carried with it the risk that Exxon Mobil Corporation and OMV would have shied away from exploration in the Southern Ocean, thus depriving New Zealand of the chance of receiving any royalties, let alone the wealth that could potentially flow to this country from a major oil or gas discovery?

Hon HARRY DUYNHOVEN: That is an exceptionally good question, and one that I had not expected, but I think I have a pretty good answer, too. Four and a half years ago when the regime was being considered, I sat with my officials around the table and we debated how we could reinvigorate the oil and gas industries. One of the things we had to consider was the trade-off between exactly the points that the member makes in terms of the royalty regime—the taxation etc.—the prospectivity, and the likelihood of having the very big companies that we need to tackle this prospect go to other more favourable places, in terms of their likelihood of making a discovery. We think we pitched it exactly right. We were ridiculed by the Opposition for what we put forward, and the proof of the pudding is in the eating. We have the largest oil exploration company in the world, which has never been in New Zealand before, here looking.

Peter Brown: Will the Minister clarify the situation from the general public’s point of view: is he confident there will be an oil and gas find of any significance and, of course, with the prospect of recovery; if there is, will New Zealanders be expected to pay full world—global—prices for their fuel, or is there likely to be some sort of favourable discount regime, as apparently there is in some other oil-rich nations?

Hon HARRY DUYNHOVEN: In those countries that have major State-owned oil exploration companies that take the risks of the billions of dollars of expenditure required to produce a field like the Great South Basin themselves—such as the Brazils of the world, and so on—those countries obviously produce the oil for themselves and therefore are not subject to the international market regime. Because of our prospectivity we in New Zealand choose not to take the risk of the huge expenditure, and although there is a very strong likelihood of a very good discovery in the Great South Basin, there is also the absolute certainty of enormous costs. We will clip the ticket on the way by, but we will pay international market prices for any oil that is discovered.

Gerry Brownlee: Since the Minister has given such an excellent dissertation on many aspects of this particular proposal, can he enlighten the House as to how either the exploration or the discovery of significant oil reserves in the Great South Basin may contribute to the Government’s goal of carbon neutrality and sustainability?

Hon HARRY DUYNHOVEN: The very simple fact is that New Zealand is a strongly oil-dependent economy, in a whole variety of ways. Although the National members have proposed that by the time all of them are dead in 2050, in 43 years’ time, New Zealand will be carbon neutral—should National ever be the Government, and I doubt very much whether that looks to be very likely—the point that I would make very strongly to the member is that I would much rather have our existing thermal power stations fuelled by natural gas than by coal, as they are at present. Our largest power station currently runs on coal largely because the National Government sat on its hands and did virtually no exploration for its entire period in office. National took no initiatives that generated extra oil and gas exploration in New Zealand, which has lead to the current situation. So we are in a position where we have taken definite action, with definite effect.

Gerry Brownlee: I raise a point of order, Madam Speaker. The Minister gave a very long answer, so he obviously does want to answer. But not once in that answer did he use the words “carbon neutrality”, “carbon neutral”, or “sustainable”. Given that those are cornerstones of this Government’s current policy mix, I wonder whether he might try to work those words into an answer for us.

Hon HARRY DUYNHOVEN: Perhaps, for the member’s benefit, I can say that if one has an economy that stops because the electricity goes off because one does not have sufficient fuel to run it, or if one is burning huge amounts of coal, one is much better to have a policy that gets some way towards carbon neutrality in the short term and that gets towards a much more sustainable economy, while being better for the environment, in the longer term.

Jeanette Fitzsimons: What environmental impact studies were done, and what size of a bond, if any, have these oil and gas companies been required to post, to cover the possible environmental damage that could result from their activities in a region of highly valuable commercial fisheries and many endangered species, such as southern right whales, beaked whales, Hector’s dolphins, four species of endangered albatrosses, and many other seabirds and mammals?

Hon HARRY DUYNHOVEN: The exploration activity that has been undertaken by the Government to date includes seismic surveying, and we took very strong regard of the advice from the Department of Conservation, particularly with regard to marine mammals. We have adopted the policies—which are internationally up there with the best practice—of having a 20-minute starting cycle of low-intensity seismic work and low-intensity explosions, in order to ensure that any marine mammals in the area of several kilometres around are, if one likes, gently warned. We have also adopted a policy that where any dolphin, whale, or other marine mammal comes within 1 kilometre of seismic vessels, work would stop. However, what I want to tell the member is that whales, dolphins, and other marine mammals are actually curious and are often attracted to seismic vessels, as the National Institute of Water and Atmospheric Research found in the small amount of seismic work that it has done. We are taking care to look after the environment, taking the best guidelines we can, and of course no project gets approval without meeting environmental requirements set out under the Maritime Transport Act.

Jeanette Fitzsimons: What is the value of the seismic data obtained at taxpayer expense and given free to these companies, and why are we subsidising a climate change - denier such as the Exxon Mobil Corporation to contribute to more climate change while putting our environment at risk?

Hon HARRY DUYNHOVEN: First of all, I tell the member that if we have a significant gas discovery in the Great South Basin, that will actually help in terms of our thermal generation, and perhaps even with liquefied natural gas being supplied to other countries for their generation of electricity, thus lessening the amount of coal needed to be burnt on this planet, which has to be an environmental benefit.

Jeanette Fitzsimons: Have I understood the Minister’s answers correctly: firstly, that no environmental bond will be posted against the risk of massive oil spillage in a highly valuable natural and fisheries environment; secondly, that the Minister disassociates himself from this Government’s draft New Zealand Energy Strategy, which says that fuel for power stations from now on should come from renewable resources, and gas is not a renewable resource; and thirdly, that he does not know the value of the taxpayer-derived seismic data that is being given free to these companies—

Hon Maurice Williamson: What was the question?

Jeanette Fitzsimons: Those three questions will probably do. Can the Minister confirm that that is what he has just told the House?

Madam SPEAKER: I just remind members that normally one supplementary question follows.

Hon HARRY DUYNHOVEN: I think I can answer all three questions pretty quickly. First of all, in terms of a bond, that is not an issue because the Maritime Transport Act controls activities in our oceans. It very clearly sets out the damages requirements and the remedial requirements if there is an oil spill. Secondly, in relation to seismic data, I think we have spent a total so far of around $16 million on all seismic activity acquired by the Government around the country. For that we have, in the Great South Basin alone, something in the order of, I think, $10 million, and $1,200 million of expenditure in exploration activity. I reckon that is a pretty good return for the taxpayer. Thirdly, on the issue of our climate change policy, etc., I do not shy away from that at all. The reason why is that currently we have thermal power stations. If we do not have fuel to run them, then the power goes off. I think we need to ensure we do have adequate fuel to run them.

Sue Bradford: I seek the leave of the House to table an article from the Otago Daily Times of 14 July in which the Associate Minister of Energy makes a statement referred to—

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

Hawke’s Bay District Health Board—Conflict of Interest

5. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: Does he still think, of the Ministry of Health inquiry into conflicts of interest at Hawke’s Bay District Health Board, “I must say I don’t expect to find anything”; if so, why?

Hon PETE HODGSON (Minister of Health): The contract at the centre of the review has already been examined by the audit committee of the Hawke’s Bay District Health Board. Its legal advice was that Mr Hausmann’s company did not receive any particular advantage. All of that documentation is in the public arena. However, disquiet and innuendo persisted to the point where Mr Hausmann wrote to me asking for a further review of the same issues that had already been examined, and I agreed. I later asked the Director-General of Health to widen the terms of reference so that any stone that might need to be turned can be. I am not sure how many times I have given that answer to the House this week, but it would be quite a few.

Hon Tony Ryall: Why is the Hawke’s Bay District Health Board seeking legal advice over its chief executive signing a $1.1 million contract for caregiver training with a company controlled by one of its own district health board members, Mr Hausmann, without a public tender process, or is that just nothing?

Hon PETE HODGSON: I am not sure why the board has sought legal advice on that. It seeks legal advice on many things, as do all district health boards. These are large organisations that need to be run carefully.

Ann Hartley: Are the conflict of interest provisions in the law sufficient, or is the Minister considering an upgrade?

Hon PETE HODGSON: Continuing the theme of Groundhog Day, I can tell the member that the ministry’s advice is that the law as it stands is robust. However, it has one obvious weak link, which is that it requires honesty on the behalf of board members. Mr Hausmann’s declaration of interest is, to my knowledge, complete. Dr Bierre’s was not, and, as a result, a contract worth many, many hundreds of millions of dollars came tumbling down.

Hon Tony Ryall: Is the Minister or the Government concerned by reports that suggest that negotiations on this contract have been going on for months, including Mr Hausmann meeting district health board staff on the matter, yet Mr Hausmann did not declare his involvement in this additional company until February 2006, only days before the contract was awarded; and did the Minister not tell the House yesterday that full disclosure of conflicts was made when the Hon Annette King appointed Mr Hausmann?

Hon PETE HODGSON: Yes, I did tell the House that yesterday, and I stand absolutely behind those remarks. As to the documentation that the member draws his remarks from, all of it has been put into the public arena and all of it will be reviewed by the review team. However, there will be some differences. The review team will review the documentation in sequence, it will review it in context, it will review it without prejudgment, and it will review it without hissy fits or toy tossing.

Hon Tony Ryall: If there was full transparency here, why do the April 2006 board minutes of the district health board show that the chief executive officer, Chris Clarke, and Mr Hausmann both told the board that there was a public tender process involved in the awarding of this $1.1 million contract to a company controlled by Mr Hausmann, yet a month later Mr Clarke admitted to the same board that there was no public tender process at all?

Hon PETE HODGSON: All of the documentation that the member continues to draw his questions from has been put into the public arena, and will itself be reviewed by the review team. The review team, I am sure, will review the documentation in sequence and in context, without prejudgment, and without grandstanding in the House.

Hon Tony Ryall: Does the Minister not realise that the reason why the public will not accept an inquiry into his appointees’ actions by another of his own appointees is the fact that Mr Hausmann has been inserted into this conflict of interest position because the Hon Annette King rushed his appointment through the process in order to avoid the cut-off period for new appointments before the election; that it was, in fact, her decision to rush the process that put Mr Hausmann in the position where today everybody, including Mr Hausmann, is calling for the Auditor-General to investigate, yet the Minister is happy for his hand-picked appointees to do the job?

Hon PETE HODGSON: Let us go back over it again. The appointment process that was carried out by the Hon Annette King was unexceptional, or, to put it another way, identical processes had been used before and will be used again—identical. The Ministry of Health is adamant that the advice provided to Cabinet was accurate and sufficient. And on the matter of the Auditor-General, I say that the Auditor-General is not my person; the Auditor-General is his own person, and he can involve himself should he choose to. He has so far indicated that he chooses not to.

Dr Jonathan Coleman: How can the public be confident in the outcome of an inquiry into insider trading, when that inquiry is to be headed by a district health board chair who, as a Labour Government appointee himself, has an inherent conflict of interest when called upon to investigate fellow Labour Government appointees at the next-door-neighbour district health board?

Hon PETE HODGSON: Let me rise in defence of the reputation of both Syd Bradley and Ian Wilson. Let me rise in defence of their reputations. Not only were both of them appointed by National to a variety of positions but they are held, as far as I am aware, in high regard by both sides of the House, and probably by all sides of the House. I object to this House being used by that man to impugn the integrity of two gentlemen variously this week who have provided this country with long and loyal service, and who do so without fear or favour.

Methamphetamine—Children and Clan-labs

6. Hon BRIAN DONNELLY (NZ First) to the Minister of Justice: Is the Government concerned at the findings of the recent report of the National Drug Intelligence Bureau, which shows that almost one-third of clan-labs discovered by police were found at dwellings that had children resident, and would it consider legislation making criminal offending in the presence of a minor an aggravating factor at sentencing as an option to rectify this problem?

Hon MARK BURTON (Minister of Justice): Yes, the Government is most certainly concerned that any child should be exposed to clan-lab situations. Any measure that can protect at-risk children in such situations must, of course, be considered. The member, I know, is genuinely concerned, and will therefore be pleased to know that there is already precedent for dealing with aggravating factors in criminal behaviour. I can perhaps do no better than to quote Winkelmann J in the 2005 sentencing of an offender who was involved with the manufacture of methamphetamine: “it is a considerable aggravating factor that one of these operations was in the garage at the property where you lived with your children .. you exposed your children to toxic chemicals and a dangerous environment.” I absolutely support the justice’s ruling there.

Hon Brian Donnelly: Would the Minister agree that young children are far too often the innocent parties to criminal offending by adults, and that where offending endangers minors, or exposes them to potentially adverse effects from that offending, the sentence imposed should reflect this; if not, why not?

Hon MARK BURTON: Again, I can only agree with the member, and I am sure he will welcome the High Court judgment that I referred to before, because it establishes very clearly at law that putting children in harm’s way in such criminal behaviour situations is indeed an aggravating circumstance and should be treated as such.

Hon Brian Donnelly: Is the Minister aware that several jurisdictions in the United States have passed legislation making the manufacture of methamphetamine in a residence occupied by a minor an aggravating factor at sentencing; and is he satisfied that current legislation is providing results in sentencing that properly take into account the safety of children and their exposure to such dangerous criminal practices?

Hon MARK BURTON: I think the Sentencing Act 2002 certainly does provide for the provision of aggravating circumstance, and section 9(4) allows the sentencing judge to take into account matters that are deemed to be appropriate. I think there is considerable provision there, as I have said in the first two answers. The High Court has established common law that is useful for any future reference, but certainly I am taking the opportunity to consider the report. This is the first time that we have had this particular report dealing with the direct impact on children, and I am certainly taking the opportunity to look very carefully at the matter.

Hon Brian Donnelly: I seek leave to table my Sentencing (Protection of Children from Criminal Offending) Amendment Bill, which would make criminal offending in the presence of a minor an aggravating factor in sentencing.

Leave granted.

State Houses—Tenancy of Smaller Homes

7. PHIL HEATLEY (National—Whangarei) to the Minister of Housing: Can he confirm his statement yesterday that “Already in the last year we have moved 303 tenants into smaller houses, thus saving the taxpayer $300 million”, later corrected to a saving of $280 million; if so, how exactly does the taxpayer save $924,000 on average by shifting a tenant into a smaller State home?

Hon CHRIS CARTER (Minister of Housing): The member was not in the House last night when I was granted leave to correct the figures I gave during question time. I will attempt to clarify the figures for the member now. In 2006 and 2007 Housing New Zealand Corporation saved an estimated $280 million, both by encouraging market rate tenants into private rental housing or homeownership, and through shifting small families occupying large houses into smaller homes. In 2006 and 2007 the corporation saved an estimated $36 million by shifting those 303 tenants occupying large houses into smaller ones. This figure does not include the impact of shifting market rent tenants. This morning I have obtained cumulative figures for the last 2 years that show that we have saved over $600 million through shifting people into smaller houses, and shifting people on market rents into the private sector.

Phil Heatley: I raise a point of order, Madam Speaker. To put this question on the Order Paper this morning I had the Clerk’s Office confirm to me that the Minister’s statement last night said that he had corrected the saving made from shifting 303 tenants to “$280 million”. Consequently, that is exactly what I put in the question. The Minister has not answered the question as to why shifting 303 tenants saves $280 million—the figure that the Clerk’s Office confirmed he said last night.

Madam SPEAKER: I think the Minister did give a full answer to the question, but the member has a supplementary question.

Phil Heatley: Does the Minister stand by the claim he made in this debating chamber that in the last year, that by shifting 303 State house tenants into smaller homes he has saved the taxpayer $280 million; does he stand by that statement or not?

Hon CHRIS CARTER: By a very active programme in Housing New Zealand Corporation of shifting people out of bigger houses they no longer need, into smaller ones, and by moving market renters into private accommodation or into buying their own homes, we have saved over $600 million in the last 2 years.

Russell Fairbrother: What reports has the Minister seen about alternative approaches to housing policy?

Hon CHRIS CARTER: Last night National’s associate housing spokesperson, Bob Clarkson, mesmerised this Chamber with his proposals for the Government to withdraw completely from social housing. He also suggested that mixed communities, such as the one we are planning for Hobsonville, would “offend” people. One can only assume he felt happier with the less well-off living in their own areas. Perhaps ”Bob the Builder” has finally revealed National’s long-awaited housing policy—no State housing, and ghettos for the poor.

Madam SPEAKER: If members wish to stay in the Chamber, not only will they be seated when I rise, but also they will keep quiet. The Minister made an inappropriate reference to a member, so I will ask him to withdraw that comment.

Hon CHRIS CARTER: I apologise for calling Mr Clarkson “Bob the Builder”.

Madam SPEAKER: No, you apologise. We just need a withdrawal and an apology.

Hon CHRIS CARTER: I withdraw and apologise.

Pita Paraone: Tēnā koe, Madam Speaker. If the Government is to continue saving New Zealanders money in the housing portfolio, when will it finally commit to making State housing available to confirmed New Zealand citizens?

Hon CHRIS CARTER: State house tenants must be residents or citizens of New Zealand. If the member has any information to the contrary, could he please let me know.

Phil Heatley: If the Minister is really saying he can save almost a million dollars by shifting a tenant into a smaller State house, or save a million dollars, or hundreds of thousands of dollars, by shifting on market renters, why does he not just pay these thousands of tenants and boarders half a million bucks each upfront to buy their own home, free up the State house for a needy family on the waiting list, and pocket the other half million dollars for Housing New Zealand Corporation?

Hon CHRIS CARTER: Perhaps, finally, we are hearing the National Party’s housing policy.

Gerry Brownlee: I raise a point of order, Madam Speaker. The Minister stood, because he wanted to answer the question, but that answer surely cannot be considered as addressing the question. He is the one who has put the figures into the arena. He is the one who has told us today about his achievements. Now here is a simple question: “Why on earth would the Government spend so much moving people around, when it could just give them a house in the first place?”.

Madam SPEAKER: Perhaps the Minister would like to add to his answer.

Hon CHRIS CARTER: I am pleased to report, as I have already in the House today, that we have saved the taxpayer over $600 million in the last 2 years by moving people around.

Phil Heatley: Can the Minister confirm his answer to question for written answer No. 2998 where he says there are 1,578 underutilised houses with two or more spare bedrooms, and that they have been underutilised for 5 years now; if so, why has he moved only 303 of those 1,500 tenants into smaller houses in the past 5 years, when apparently he could have saved the taxpayer billions of dollars?

Hon CHRIS CARTER: It has never been Labour Party policy to throw people out of their homes, nor has it been its policy to sell State houses—unlike the previous National Government, which sold 13,000 State houses.

Phil Heatley: I seek leave to table an answer to a parliamentary question that states there are 1,500 houses with spare bedrooms.

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

Phil Heatley: I seek leave to table an answer to a parliamentary question that states there are 7,000 houses with spare bedrooms and boarders.

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

Phil Heatley: I seek leave to table an answer to a parliamentary question that states that only 46 of these 8,500 tenants have been moved on.

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

Phil Heatley: I seek leave to table a statement from the Minister that only 303 of these 8,500 tenants have—

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

Hon CHRIS CARTER: I seek leave to table a parliamentary question that shows that Mr Heatley yesterday rounded out a figure of 6,931 tenants to approximately 6,000 tenants.

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

Question No. 4 to Minister—Amended Answer

Hon HARRY DUYNHOVEN (Associate Minister of Energy): In answer to a supplementary question to question No. 4 I told the House that around $10 million was spent on the acquisition of seismic data by the Government in the Great South Basin to achieve an exploration expenditure of $1,200 million. In fact, I overstated it. The correct figure is $5.3 million.

GERRY BROWNLEE (National—Ilam): I seek leave to ask the Minister an extra supplementary question, given his revelations this afternoon.

Madam SPEAKER: Leave is sought. Is there any objection? Yes, there is objection.

Kyoto Protocol—Costs

8. Hon Dr NICK SMITH (National—Nelson) to the Minister responsible for Climate Change Issues: What cost is there to the New Zealand taxpayer from increased levels of deforestation and New Zealand’s obligation under the Kyoto Protocol?

Hon DAVID PARKER (Minister responsible for Climate Change Issues): That will depend entirely upon the levels of deforestation during the period 2008 to 2012.

Hon Dr Nick Smith: Is the reason the Government has hidden away on page 788 of the Budget a whopping $85 million expense to the taxpayer of deforestation—with no mention of it in the trends, no mention of it in the objectives, and no press release or explanation— that a massive stuff-up occurred between the Climate Change Office and the Office of Treaty Settlements over the Kyoto Protocol liabilities for the forests involved in the Te Arawa settlement?

Hon DAVID PARKER: No.

Hon Marian Hobbs: What recent reports, if any, has the Minister received on emission reduction opportunities being developed in New Zealand that could reduce New Zealand’s greenhouse gas emissions and our future Kyoto Protocol liability?

Hon DAVID PARKER: The Independent Financial Review yesterday reported on its front page that Air New Zealand and plane manufacturer Boeing are working with the Blenheim-based biofuel developer Aquaflow Bionomic Corporation to create the world’s first environmentally friendly aviation fuel. This will be made of biofuel extracted from the algae that grow naturally on sewage oxidation ponds. While Dr Smith misleads the House about coal, New Zealand is answering the Prime Minister’s call and advancing sustainably towards carbon neutrality.

Hon Dr Nick Smith: How does he reconcile the $85 million expense to the Crown in the Budget for preventing Kyoto Protocol deforestation liabilities on the settlement lands made available to Te Arawa, with the Government’s statement on 8 August last year on that settlement: “The total cost to the Crown is $36 million.”; and does he now accept that the cost to the taxpayer is not $36 million but $121 million?

Hon DAVID PARKER: The member is incorrect to characterise the full amount of the write-down as being attributable to the Kyoto Protocol. The promises that were made by the recipients of that land included restrictions on future land use that go far beyond the first commitment period in the Kyoto Protocol, and adjustments to valuation for reasons also beyond just forestry.

Hon Dr Nick Smith: I raise a point of order, Madam Speaker. My question was about the Government telling the public last year that the cost was $36 million, and the Budget having an allocation of $85 million on top of that $36 million. My simple question to the Minister was whether he now accepts that the cost to the taxpayer is $121 million, not $36 million. I got some complex explanation around the different periods associated with the Kyoto Protocol. What I want to know is what the cost to the Crown of that settlement is.

Madam SPEAKER: No, I think the Minister did actually address the question. As the member knows, one cannot require a yes or no answer from the Minister, but the Minister did address the substance of the question.

Hon Dr Nick Smith: Does the Minister accept that this $85 million debacle between the Office of Treaty Settlements and the Climate Change Office arises because, between the agreement in principle in September 2005 and the final deed of settlement, his Government’s climate change polices were all over the paddock, leading to confusion over those Kyoto Protocol liabilities, and does he accept that taxpayers are now having to foot a bill of $85 million because of this Government’s incompetence?

Hon DAVID PARKER: No and no.

Hon Dr Nick Smith: Does the Minister recall Helen Clark and Pete Hodgson telling New Zealanders that the people of New Zealand stood to make hundreds of millions of dollars from forestry under the Kyoto Protocol; and now that taxpayers are having to fork out the first $85 million of real money, does he think it is time that the Labour Government apologised to the people of New Zealand for misleading them and for its failed Kyoto Protocol policies, which are leading to record levels of deforestation and these huge bills for the normal taxpayer?

Hon DAVID PARKER: An emission is an emission, and emissions from deforestation are greenhouse gas emissions. We do want to curb our emissions growth, and an important part of that will be implementing a cap on deforestation, which was first announced in 2002. I would also say that emissions trading, if it is introduced, will cost-effectively and substantially reduce deforestation even further below that.

Te Ururoa Flavell: Tēnā koe, Madam Speaker. Kia ora tātou. Did the Minister recommend to the Minister in charge of Treaty of Waitangi Negotiations that he disclose the nature of obligations expected under the Kyoto Protocol when entering into settlement discussions with

T_________ o Te Arawa, and would he agree that the failure to disclose such significant obligations breaches good-faith negotiations; if not, why not?

Hon DAVID PARKER: In respect of the settlement referred to by Dr Smith, I am sure there was full disclosure, and full knowledge on the part of both parties as to what they were negotiating about.

Hon Dr Nick Smith: Noting the Minister’s answer that there was full disclosure, I seek the leave of the House to table the initial deed of settlement, which states that the total cost to the Crown would be $36 million.

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

Hon Dr Nick Smith: I seek leave to table page 788 of the Budget, which shows that not $36 million but—

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

Hon DAVID PARKER: I seek leave to table two documents, the first of which is the energy data file, which shows the amount of coal burned to produce—

Leave granted.

Hon DAVID PARKER: The second is the article in the Independent Financial Review that reports the efforts made by the Aquaflow Bionomic Corporation.

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

Te Ururoa Flavell: Does the Minister not agree that, given the number of cross-claimants in the central North Island claims that are not currently being settled, any arrangements that lock those lands into a restrictive development regime that limits land use to forestry should be disclosed to those cross-claimants, to allow them to have meaningful input into those decisions?

Hon DAVID PARKER: I am sure that those issues would be appropriately taken into account in negotiations by the Minister in charge of Treaty of Waitangi Negotiations.

Land Transport—Funding

9. H V ROSS ROBERTSON (Labour—Manukau East) to the Minister of Transport: What recent announcements has she made to assist local government that provide greater flexibility for land transport funding?

Hon ANNETTE KING (Minister of Transport): Yesterday I announced at the Local Government New Zealand Conference that regionally distributed funding, also known as R funding, will now be available for renewal projects such as rebuilding and replacing roads and other land transport infrastructure. R funding was first made available in 2005 to assist local government with priority infrastructure projects. It is distributed on a regional basis. Unfortunately, some local authorities were unable to take full advantage of R funding, because originally it could be applied only for capital projects. Now areas like Southland, for example, will be able to access funding for renewals.

H V Ross Robertson: Can the Minister tell the House what the reaction was to this announcement at the Local Government New Zealand Conference?

Hon ANNETTE KING: There was a very enthusiastic reaction, particularly from rural and provincial New Zealanders, whose needs, they know, were neglected in the 1990s by the previous National Government.

H V Ross Robertson: Can the Minister, therefore, tell the House how much money will be made available for renewal?

Hon ANNETTE KING: Of the $2 billion available for land transport infrastructure projects, approximately $510 million has been set aside for local road projects, depending on what regions regard as their land transport priorities. Some of this funding will be available for renewals. It will be very much up to the regions themselves.

Police College—Graduates

10. CHESTER BORROWS (National—Whanganui) to the Minister of Police: Does she stand by her statement that “Over the past 18 months, since I became Police Minister, I have regularly received verbal assurances and updates from the police administration that the standard of police graduating from the college is being maintained”; if so, why?

Hon ANNETTE KING (Minister of Police): Yes. I have regularly received updates because I want to see continuing high standards for graduates.

Chester Borrows: How can she be so well informed when she did not receive the report by police college instructor and psychologist Iain Saunders criticising the low mental ability of some recruits until Monday 25 June, which was after the story broke in Saturday’s newspaper and months after it was submitted?

Hon ANNETTE KING: Because as a Minister I do not rely on one report from police headquarters; I receive a report regularly. In fact, I receive a report on recruitment into the New Zealand Police every week.

Charles Chauvel: Is the Minister aware of the comments by Chester Borrows that there should be some leeway when considering applicants with offences?

Hon ANNETTE KING: Yes, I have seen comments by Chester Borrows that there is a place for a case by case approach to people who have committed offences. I wonder whether the following case would be one of the ones we should take a case by case approach to, as it is one that Chester Borrows criticised. It was a case of an applicant who had committed an assault offence. An investigation showed that the applicant was 20 at the time. He was 31 when recruited. The applicant had confronted an offender who had burgled his house three times. He hit the offender while waiting for the police to arrive, after the offender had laughed at him when he asked for his personal belongings back.

Chester Borrows: What reasons has the Minister been given for not immediately seeing a report that describes a recruit as having to form letters inside bubble shapes, like a 5-year-old; an intelligence standard that allows recruits only in the 23rd percentile to progress; and emphatically states that the public and the future of the police are at significant risk—all of which was known to the office of the Commissioner of Police?

Hon ANNETTE KING: When I was informed of this report I asked for it. I then found that we had a number of reports that were conflicting, and as members of this House know, I sought an independent assessment of the training standards. It will be available at the end of September.

Chester Borrows: I raise a point of order, Madam Speaker. My question specifically asked what reason she had been given for not immediately seeing the report. She did not give any reasons and did not address that specific question.

Madam SPEAKER: I think she did, but I think the Minister wishes to add to her answer.

Hon ANNETTE KING: All I am going to say is that the report itself was an internal report done for debate. I did not necessarily need to see it. What I need to know is that standards are being maintained. I receive a report every week from headquarters. I have no reason to doubt the integrity of those who are reporting to me.

Charles Chauvel: Is the Minister aware of any other information that places the circumstances of offences committed by serving police officers in context?

Hon ANNETTE KING: Yes, and I think this was a very unfortunate issue that was raised by Chester Borrows for a headline. He never looked behind the issue, but he did make the point that maybe we should look at these things on a case by case basis. If he asked for that information he would know that many of those offences—in fact, most of them—happened when people when were young, that they were much older when recruited, and that the offences were at the minor end. I can give another example, which involves an offence of theft. The applicant was a university student at the time of the offence, and was 30 when recruited. The applicant took an ornamental pot plant from outside a house while walking home from a night drinking in town.

Chester Borrows: Has the Minister now got a response to comments from Senior Sergeant Saunders that “Some of our staff are in a very vulnerable position and some of the public are probably being placed at risk or offered very poor service.”, and that “The police … are at risk of claims of negligent hiring because we know these things.”, or does she still protest that these are operational matters and have nothing to do with her as Minister?

Hon ANNETTE KING: No, I take all those issues seriously. That is why I sought an independent assessment, which will be available to all members of the House and to the public of New Zealand, so they can look at those issues. But I would hope that the member, who is a former police officer, would stop beating up on the police. They have, frankly, had a gutsful of it. There are many good men and women out there who work hard for the public of New Zealand, and they put up with that tripe day after day.

Charles Chauvel: Is the Minister aware of any further information that places the circumstances of offences committed by police recruits in context?

Hon ANNETTE KING: I have many examples, but I think the House deserves one more. There was an example of wilful damage. The applicant was 16 at the time of the offence and 41 when recruited. The applicant had broken off a car aerial.

Women’s Affairs, Ministry—Future

11. SUE MORONEY (Labour) to the Minister of Women’s Affairs: Has she received any reports on the future of the Ministry of Women’s Affairs?

Hon RUTH DYSON (Minister of Labour) on behalf of the Minister of Women’s Affairs: Yes. The Minister has received a report that states that the ministry is “a sexist relic” that the National Party “will extinguish”, and another report reporting stating that it would be preferable for the ministry’s funding to be increased and for it to be given “more teeth”. The first report is from National’s Judith Collins, and second is from National’s Jackie Blue.

Sue Moroney: Has she received any reports from the ministry on policies that benefit women?

Hon RUTH DYSON: Yes, actually I have. The ministry has provided valuable input into policies that benefit women and families, such as paid parental leave, Working for Families, pay and employment equity, and 20 hours’ free early childhood education. Those are all policies that National has opposed. National can say, for political reasons, that it supports the Ministry of Women’s Affairs and the work that it does, but it is obvious that it does not support women’s issues. Its true attitude is shown in John Key’s statement last month: “We don’t have enough women in our caucus, so we’ve had to start cross-dressing.”, or Bob Clarkson informing us: “All guys should get married—we should all suffer the same amount.”

Madam SPEAKER: If members to wish to remain in the Chamber, they will be quiet.

Hon George Hawkins: I raise a point of order, Madam Speaker. I did not hear the last part of the answer because of all the noise. Could the Minister repeat it, please.

Madam SPEAKER: Yes, I will ask the Minister to summarise her answer.

Hon RUTH DYSON: I am happy to—

Hon Dr Nick Smith: Point of order—

Madam SPEAKER: Please be seated. Would both members please be seated. The Minister was asked for reports. As members know, those reports can in fact be given in the House. However, Ministers cannot comment on the internal matters of a political party. But the reports, if they are in the arena, are able to be included in the answer.

Gerry Brownlee: I raise a point of order, Madam Speaker. They may be able to be received, but they have to be reports that relate, surely in this case, to matters pertaining to the Ministry of Women’s Affairs. I think that the Minister took considerable licence in straying away from that.

Madam SPEAKER: I think we will hear whether the Minister did stray, this time. The Hon Ruth Dyson, please summarise the answer.

Hon RUTH DYSON: The final report I quoted was from Bob Clarkson, National member of Parliament, who informed us: “All guys should get married—we should all suffer the same amount.”

Madam SPEAKER: I do think that was not actually directly related to the Ministry of Women’s Affairs, so I accept the point of order.

Student Loans—Incentives

12. PANSY WONG (National) to the Minister for Tertiary Education: Does he stand by his statement in respect of 13 providers currently being re-investigated for allegedly offering cash kickbacks to senior students through the student loan system that “None of the 13 providers have qualifications programmes that are currently eligible for funding. New students commencing unfunded qualifications from January 2007 are not eligible for access to student loans and allowances.”; if so, why?

Hon Dr MICHAEL CULLEN (Minister for Tertiary Education): Yes, but I note that, in the light of continuing allegations, the situation is being investigated by relevant Government agencies, and I thank the member for her assistance in those inquiries, both past and forthcoming.

Pansy Wong: How can the Kingsland Institute of New Zealand, the International College of Auckland, and Oxford International Academy, three of the 13 providers under investigation, advertise throughout June and July this year that they will arrange student loans and allowances for senior students who enrol in their English classes, free of charge?

Hon Dr MICHAEL CULLEN: There are only two circumstances in which that could legitimately happen—that is, if they come in before 17 January or were legitimately grandparented. From the nature of the advertisements, neither of those circumstances would seem to apply. Therefore, the prospect arises, perhaps, of their illegitimately backdating the start date for their programmes of study, or using other manipulative means. I know that the member is going to assist the Tertiary Education Commission and StudyLink in arranging interviews on 29 July with students of institutions who have made complaints, and I thank her again for that assistance.

Pansy Wong: Is the Minister aware that those advertisements are not for grandparented students but for new students; and what measures does the Tertiary Education Commission take to police this policy, which was supposed to start in January 2007, given that the Minister has claimed that it does not rely solely upon complaints to take action, and does the Minister think those other forms of action are working?

Hon Dr MICHAEL CULLEN: As I said to the member, there were two circumstances, neither of which seems to apply—the member is not quite listening—to the advertisements that she has outlined. That is, I think, why further investigations are occurring. The fact is that people will continue to sin, and we will continue to chase them up, in that respect.

Pansy Wong: Why should the public have confidence in the Minister or the Tertiary Education Commission to police this policy, when these providers are in such open contempt of their authority and openly defy the Tertiary Education Commission?

Hon Dr MICHAEL CULLEN: I can assure the member that investigations are under way, and I will be happy to brief her outside the House on the nature of some of those investigations. I do not think it is in the public interest for me to refer to them publicly.

Pansy Wong: I seek leave to table a copy of an advertisement for the Kingsland Institute of New Zealand, dated 29 June.

Leave granted.

Pansy Wong: I seek the leave of the House to table a copy of an advertisement for the International College of Auckland dated 16 June 2007.

Leave granted.

Pansy Wong: I seek leave to table a copy of an advertisement for the Oxford International Academy.

Leave granted.

Pansy Wong: I seek leave to table a copy of an advertisement for the Kingsland Institute, dated 10 July 2007.

Leave granted.

Question No. 8 to Minister

Hon DAVID PARKER (Minister responsible for Climate Change Issues): I seek leave to table another document in relation to question No. 8. It is the Vote Lands estimates review of the select committee—

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

ENDS

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