Questions And Answers - Wednesday, 25 July 2007

Questions to Ministers

Public Service—Political Neutrality

1. JOHN KEY (Leader of the Opposition) to the Prime Minister: Does she stand by her statement that one of the aims of her Government is “to restore public confidence in the political integrity of Parliament”; if so, does she believe that guarding the political neutrality of the public service is an important part of achieving of that aim?

Rt Hon HELEN CLARK (Prime Minister): Yes; and yes.

John Key: Does the Prime Minister believe in the neutrality of the public service; if so, what is she actually doing to protect that neutrality?

Rt Hon HELEN CLARK: I am upholding the status and position of the State Services Commissioner, his deputy, and the Ministry for the Environment chief executive, unlike Gerry Brownlee, who when asked a direct question this morning refused to guarantee their jobs in the unlikely event he will ever have any influence over that.

Darren Hughes: Can the Prime Minister tell the House why she made her initial statement about restoring public confidence in the political integrity of Parliament?

Rt Hon HELEN CLARK: There were quite a few reasons why I would have made that statement. For example, the Department of Work and Income, when under the leadership of Christine Rankin—now a prominent member of the National Party—wanted all of the public servants in that department to be declaring what their political affiliations were. Then there was also the example of Bill English saying that he openly meddled in the affairs of Crown health enterprises. I had Mr Nick Smith on the public record as trying to sack his chief executive, which was not his prerogative as a former Minister, and, finally, I think it worth mentioning in this context Murray McCully’s constant meddling in the affairs of the Tourism Board.

John Key: Why did a State Services Commission memo, released yesterday, propose that a formal register of political conflicts for public servants be set up for the Ministry for the Environment, and what purpose does the Prime Minister think that register would serve?

Rt Hon HELEN CLARK: That is entirely a matter for the State Services Commission to discuss with the Ministry for the Environment. But surely, the National Party is not saying there was no potential for a conflict of interest in this issue. It had to be managed.

Jeanette Fitzsimons: Does the Prime Minister agree that the public and the business sector would have more confidence in the political integrity of Parliament if she were to convene a round table of parties to agree on a common approach to climate change policy that would endure beyond changes of Government?

Rt Hon HELEN CLARK: It would be nice if there could be greater agreement on the best way to deal with these issues. I am afraid to say that although the Green Party has been very prepared to come and discuss such issues in an open, frank way and look for constructive solutions, our experience with the National Party has been for it to say out of one side of its mouth that it would like to do that and then to constantly attack the Government out of the other side.

Hon Damien O'Connor: Has she seen any other reports of chief executives’ positions being under threat for political reasons?

Rt Hon HELEN CLARK: Indeed I have. During the National Party’s caucus in Gisborne earlier this year, and following a media stand-up conference, the Leader of the Opposition, Mr Key, indicated that Barry Matthews, chief executive of corrections, faced the sack under a National Government. He is the great advocate of the neutrality of the Public Service.

John Key: Why on earth would the ministry be required to collect the information that will now be required under this potential register of conflicts for public servants if it is not intended to be used as a way of purging those who do not share the ideological values of the Labour Party?

Rt Hon HELEN CLARK: That is, of course, complete nonsense, and the State Services Commission would not propose any such thing.

John Key: What evidence does the Prime Minister have to support the view that such a witch-hunt as would no doubt result from that register is required not only of potential employees to the Public Service but also of those who are existing workers in the State Service?

Rt Hon HELEN CLARK: It is the duty of the State Services Commission and of chief executives to manage conflicts of interest. Those are employment matters, and I am not getting involved in them, unlike National in the past.

John Key: I raise a point of order, Madam Speaker. I did not ask the Prime Minister that question. I asked her what evidence she had to support the view that a register was required, and she did not give an answer on that.

Madam SPEAKER: She did address the question, however, in her reply. I did listen carefully to it.

Jeanette Fitzsimons: If she is trying to restore public confidence in the integrity of Parliament, why has her Government failed to put any limits on anonymous donations to political parties, so that the public could find out who is funding them?

Rt Hon HELEN CLARK: There is, of course, a requirement for disclosure in the Electoral Finance Bill of amounts over the level of $10,000, but it is quite clear that the absolute banning of anonymous donations would have to be accompanied by more public funding, because otherwise there are political parties, I would suggest, across the spectrum that would simply be unable to raise money. Until there can be a more mature debate on that issue, out of the inquiry into it that the Minister has announced, that matter cannot be progressed. I think what the member needs to put emphasis on is the proposal in the bill that applies what was previously the 3-month limit for spending across the whole year. That, of course, would greatly circumscribe the activities of the hollow men who sit opposite me.

John Key: Does the Prime Minister think that the creation of a register of potential conflicts of interest will assist in ensuring that the public sector can draw from people all across the community who may be able to add value to it through their skills, not through the association of their siblings or their partners with political interests; and, secondly, does the Prime Minister really think that if that register was in place many of the fine political pairings that are operational in the public sector would in fact be in place today?

Rt Hon HELEN CLARK: The member should note that I most specifically have not endorsed the proposal. I have said it is a matter for the State Services Commission to work through with the Ministry for the Environment.

Sue Kedgley: Does she agree that New Zealanders’ confidence in Parliament would be enhanced if we were to pass legislation stipulating that key strategic monopoly assets such as airports remain in majority New Zealand control; if not, why not?

Rt Hon HELEN CLARK: I cannot quite see the relationship between the two parts of the question.

Madam SPEAKER: It was a long bow, I must admit. But I did let it go—

Sue Kedgley: I raise a point of order, Madam Speaker. Yesterday in Parliament when we were discussing the airport issue, the Rt Hon Winston Peters was given an extremely long bow and was able to ask questions—indeed of the Minister of Finance rather than the Minister with responsibility for Auckland Issues—on a huge variety of issues. I would have thought this question was relevant.

Madam SPEAKER: Yes, but the member will recall, I am sure, that I did actually point out that matter to the Rt Hon Winston Peters, just as I have done to you.

John Key: Is the Prime Minister backing away from the proposal to set up a formal register that would see existing State Service employees purged because she knows, first, that that would go to the core of the neutrality of the Public Service; second, that her union mates in the Public Service Association would not be happy about it; and, third, that many of the people who are currently working in the State sector would not actually have a job?

Rt Hon HELEN CLARK: One cannot back away from something that one has not endorsed. I believe that the biggest threat to the public sector right now is John Key’s threats about how many people should be sacked, which is a good reason why he will never be elected.

Peter Brown: Noting some of those answers, does the Prime Minister agree that perhaps the best way of guarding the political neutrality of the Public Service is to ensure that potentially compromising situations do not occur and that, therefore, perhaps checking thoroughly into people’s personal backgrounds before they are appointed, particularly to senior positions, will best achieve that outcome—does she agree with that?

Rt Hon HELEN CLARK: My view is that the Public Service Code of Conduct and all the protocols and conventions that operate around that should be upheld by chief executives and the State Services Commission.

Pipfruit Industry—Global Competitveness

2. RUSSELL FAIRBROTHER (Labour) to the Minister for Economic Development: What is the Government doing to support the global competitiveness of the pipfruit industry?

Hon TREVOR MALLARD (Minister for Economic Development): The Government is supporting a groundbreaking new pipfruit project, spanning Hawke’s Bay, Nelson, and Otago—three key marginal seats, I might note—aimed at growing export fruit that has no detectable pesticide residues. This is an initiative that supports sustainability and economic transformation. Consumers around the world are demanding that fruit has no chemical residues, and New Zealand can take advantage of this by being a world leader in exporting sustainable produce.

Russell Fairbrother: What investment is the Government making in this initiative, and what returns are expected?

Hon TREVOR MALLARD: The Government will contribute $2 million towards this joint initiative with the pipfruit industry. The project is expected to halt the decline in the industry’s exports and lead to a $152 million increase to the value of exports after 5 years.

Chris Tremain: Is this morning’s announcement really just false platitudes, when the real issues facing apple growers are high interest rates, a high exchange rate, and lack of market access to Australia?

Hon TREVOR MALLARD: I am not sure whether the current representative of the Hawke’s Bay is saying that we should not put the support in and move the pipfruit industry into the modern world. But if the member had been properly representing his constituents, on top of the issues, he would have heard a very good speech from my colleague the Minister of Trade, who addressed those very issues there this morning.

Environment, Ministry—Communications Manager

3. GERRY BROWNLEE (National—Ilam) to the Minister for the Environment: How many phone calls occurred between his political advisor Steve Hurring and the chief executive of the Ministry for the Environment regarding the employment of Madeleine Setchell as communications manager for the ministry, and on what dates did those calls occur?

Hon DAVID BENSON-POPE (Minister for the Environment): Obviously, my adviser has regular phone conversations with the chief executive on a variety of matters. I am advised regarding this particular issue that there was one call initiated by my adviser on 28 May seeking verification of a rumour. The chief executive was not able to verify the rumour immediately. I am advised that the chief executive initiated two or three subsequent calls that day to my adviser to report on progress in verifying the rumour. I am also advised that there was one further call on 29 May in which the chief executive confirmed that the process at the ministry had led to this possible conflict of interest not being properly identified. In that respect there was no blame on the part of Ms Setchell.

Gerry Brownlee: If the Minister had the facts about Ms Setchell’s employment confirmed on 28 May, as he said in the House yesterday, why does the State Services Commission report, which he relies on so heavily, state that it was Mr Logan who informed the Minister after he had made his inquiries, and does that not call into question just where the truth lies—with what the Minister told the House yesterday and again today, or with the State Services Commission report?

Hon DAVID BENSON-POPE: No; there is no contradiction between what I told the House yesterday and what is in Mr Rennie’s report.

Gerry Brownlee: Does the Minister stand by his statement to the House yesterday that he did not discuss the issue with Mr Hurring, even though he had had the rumour confirmed by Mr Hurring a month before Madeleine Setchell’s actual departure, and does he now expect this House to believe that he took no interest, had no discussions, and did not talk about this matter with his close political adviser—or advise Mr Logan—even though he considered this a serious conflict of interest?

Hon DAVID BENSON-POPE: Matters of conflict of interest are not for me to decide and there was, in fact, nothing to discuss, because I had been informed that Mr Logan was dealing with this issue.

Gerry Brownlee: Did Mr Logan ever ask the Minister for his opinion on the appointment of Madeleine Setchell, given the Minister’s knowledge of her connections, which she had disclosed during the interview process and were known to one of Mr Logan’s senior managers?

Hon DAVID BENSON-POPE: Mr Rennie and Mr Logan are quite clear on that matter in the report, which I will read: “Mr Logan is clear that he made the decision independently and that the Minister was not involved in that decision.”

Gerry Brownlee: I raise a point of order, Madam Speaker. That was not related to my question. My question was whether the Minister’s opinion was asked and whether he was party to discussions. The report is well known—it is out in the public arena. It is a relatively sanitised version of what must have been quite a range of discussions. We are simply asking whether the Minister’s view on this matter was sought by the State Services Commission when it was doing its report, or whether it was sought by Mr Logan when he was making his decision.

Madam SPEAKER: I think the Minister addressed the question, but if he wishes to add anything more I would invite him to do so. He does not.

Gerry Brownlee: On how many occasions between 28 May, when the Minister first became aware of Ms Setchell’s appointment, and 3 July, when Ms Setchell was asked to depart the office, did the Minister have discussions with Mr Logan?

Hon DAVID BENSON-POPE: I do not have that information in front of me, but it can be easily obtained. Discussions would have been in the course of the normal departmental meetings with the ministry.

Gerry Brownlee: Did the Minister at any time during any of those discussions with Mr Logan say to either him or his staff: “I do not want that woman in my office.”?

Hon DAVID BENSON-POPE: No.

Peter Brown: Does the Minister share my worrying concern that this crusade National is on on behalf of Madeleine Satchell has the potential, if not to destroy, then certainly to limit, her career in the public service?

Madam SPEAKER: I am hesitating because I am looking for the ministerial responsibility there.

Hon DAVID BENSON-POPE: I think this matter has been professionally and properly handled by the State Services Commission and by Mr Logan. It is not the Government that has put this woman’s name into the public domain.

Tertiary Institutions—Dual-purpose Category

4. Hon BRIAN DONNELLY (NZ First) to the Minister for Tertiary Education: Is there a need within the tertiary institutional framework for a category of a dual-purpose institution which would simultaneously have the characteristics of a polytechnic and a university and which focuses upon applied research?

Hon Dr MICHAEL CULLEN (Minister for Tertiary Education): The issue is one worthy of serious consideration. I therefore look forward to the member’s bill proceeding to the select committee to enable that to happen.

Hon Brian Donnelly: Can the Minister confirm that the United Kingdom Leach report on increasing national productivity found that the greatest productivity gains were to be made by increased participation in levels 4 to 7 certificate and diploma, and trade and vocational, programmes?

Hon Dr MICHAEL CULLEN: The Leach report did state that when considering how to increase productivity gains, that level of certificate and other activity was most important. But the report itself did not refer to any structural change to the tertiary system, and the UK does not have a university of technology category.

Hon Brian Donnelly: Does the Minister agree that, under current legislation, if a non-university degree-conferring tertiary institution wishes to gain parity of esteem with universities for its graduate and post-graduate qualifications, it is forced to reduce the proportion of sub-degree programmes, which explains, perhaps, the unsatisfactory dearth of trade and vocational training courses from the North Shore to Wellsford?

Hon Dr MICHAEL CULLEN: I think that is a very good point. I think that what we should hope to achieve through the tertiary reform process is greater identification of the expertise and specific characteristics of institutions, so that they can achieve excellence within those boundaries, rather than our trying to pretend they are all like universities in order for them to be regarded as providing excellence. I think that is one of the things that has gone wrong with the tertiary education system in the last 20 years.

Corrections, Department—Confidence

5. 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 the chief executive understands that he is responsible for continuing to make improvements, with clear lines of accountability across the whole department.

Simon Power: Can the Minister confirm that under the untested collaborative working arrangements adopted by his department, the indicative or target costs of the new regional prisons were not agreed to until after construction began, which was 17 months later in the case of the Otago Region Corrections Facility, 20 months for the Spring Hill Corrections Facility, and not until 3 years after earthworks started at the Auckland Region Women’s Corrections Facility?

Hon DAMIEN O'CONNOR: I am not familiar with all the details around the collaborative working arrangements. I know that mistakes were made in the set-up of those arrangements. However, investigations into those projects clearly identify that without the collaborative working arrangements they would not have been completed on time, and it was concluded they were done in a manner of integrity and full accountability.

Simon Power: Can the Minister confirm the contents of a letter from Audit New Zealand to Barry Matthews, dated 31 August 2006, that revealed that his department handed over $471 million of taxpayers’ money, or over 60 percent of the total spend on the new prisons, before those target costs were even agreed to?

Hon DAMIEN O'CONNOR: I am not familiar with that particular letter. But the whole process of collaborative working arrangements in regard to two projects with the Regional Prisons Development Project had been thoroughly investigated. Although it was acknowledged that the costs were far greater than originally predicted, in fact the target number of prison cells built was far greater than that originally laid down.

Simon Power: Does the Minister understand the statement made in the State Services Commission investigation into cost overruns in prison construction, which says that until the indicative costs are agreed, the contractors are “effectively reimbursed according to cost.”, and that the Government does not have a final assurance that the estimated costs represent an “efficient level of costs.”; if so, can he now give the taxpayers of New Zealand an assurance that they were not gouged for $471 million?

Hon DAMIEN O'CONNOR: That member makes outrageous allegations, as he has in this House time and time again. That whole construction project, worth over $1.2 billion in total construction across the corrections system, has been thoroughly investigated by Audit New Zealand, and although the costs are more than we would have liked, there are no major concerns with expenditure in that area.

Simon Power: Does the Minister stand by his previous statements that the use of collaborative working arrangements for building prisons is “the best way forward” and is “appropriate for the nature and scale of the project”; if so, why did his department inform the select committee that in the case of any potential redevelopment of Mount Eden Prison, a decision has been made not to use collaborative working arrangements?

Hon DAMIEN O'CONNOR: I do stand by my statements, and reports into the projects and collaborative working arrangements deemed those to have been appropriate at the time. We have learnt things from that process, and we have decided that we will not proceed on the same basis as we move forward with work at Mount Eden Prison.

Simon Power: Does the Minister stand by his statement that: “Without the collaborative working arrangement management system it was unlikely these projects would have been completed on time.”—and he has reiterated today in the House that they have been and will be completed on time, and that this is a major achievement—if so, how does he reconcile this with the fact that the Otago prison was supposed to be opened in 2006 rather than 2007?

Hon DAMIEN O'CONNOR: Those projects—and Spring Hill is yet to open—have been completed on time, as projected. The over 2,000 prison cells that have been built, at a cost of over $1.2 billion, will serve this country well. We did not like spending that money but we had to, because the previous Government had ignored the needs of the Department of Corrections.

Simon Power: I seek the leave of the House to table a letter from Audit New Zealand to Barry Matthews dated 31 August 2006—

Leave granted.

Foreshore and Seabed Act—High Court Decision

6. TARIANA TURIA (Co-Leader—Māori Party) to the Deputy Prime Minister: He aha tōna whakautu ki tētahi tono o nā noa nei mō te Ture Takutai Moana, arā, i takarepa te hātepe mō te whakaae a Te Kooti Matua kia tono te Māori meina kei a rātau te mana i aukatia i raro i tētahi hanganga ture nā te Pirimia i whakahau i te wā e rangirua ana ōna whakaaro?

[What response does he have to the recent claim, regarding the Foreshore and Seabed Act, “that the process that saw a High Court decision to allow Maori to legally test their claims to ownership blocked by legislation promoted by a rattled Prime Minister, was flawed”?]

Hon Dr MICHAEL CULLEN (Deputy Prime Minister): My response is that the quotation comes from a Dominion Post editorial that largely attacked Mr Key for not supporting the repeal of the Foreshore and Seabed Act. I take it that the Dominion Post, having for once had a long swipe at the National Party in an editorial, felt the need to have one short one at the Labour Party as well, to even up the balance.

Tariana Turia: Do you recall your speech of 12 October 2005, the Michael King Memorial Lecture, which referred to the Court of Appeal’s finding that Māori claims to customary rights were a matter still to be tested case by case in the courts, a finding about which you said: “In arriving at this conclusion I am sure the Court of Appeal was correct.”; do you still agree with that statement; if not, why not?

Madam SPEAKER: Before I call the Hon Dr Michael Cullen I remind members that when they address members they must not include the Speaker in questions or answers, please.

Hon Dr MICHAEL CULLEN: Yes, those were carefully considered comments, and indeed the processes for exploring those customary rights are at present under way in a number of instances.

Pita Paraone: Ka whakaae te Minita nā te whakaritenga o Te Kooti Pīra i whakaharahara te kore mārama ko wai te rangatira o te Takutai Moana koinā te take i whakaritenga te hanganga ture kia mārama mai te take kia riro ki te Karauna mō ake tonu atu mō ngā iwi katoa o Aotearoa kia wātea taurangi ki te iwi whānui, me koi nā te taumata o ngā tautoko mō aua hanganga ture te kore tautoko o tēnei Whare mō te hanganga ture whakakorenga?

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

[Would he agree that the Court of Appeal decision highlighted the lack of clarity surrounding the ownership of the foreshore and seabed, that legislation was required to clarify the issue and secure Crown ownership in perpetuity for all New Zealanders and guaranteed public access, and that the level of public support for that legislation is clearly indicated by the lack of support in the House for the repeal legislation?]

Hon Dr MICHAEL CULLEN: I think those are fair comments, and it is worth reminding the House that at the time I told the House and the country that the ambition of the Government was to seek to change as little as possible with the Foreshore and Seabed Act. Indeed, if somebody looks at what is happening now in 2007 and at what was happening something over 3 years ago, it would be hard to find what has changed.

Metiria Turei: Has the Minister had any reports that the National Party’s disgraceful U-turn on the Foreshore and Seabed Act, where it now agrees with the confiscation of Māori land using blunt, ill-conceived, and prejudiced legislation, is an identical position to the one taken by the Labour Government?

Hon Dr MICHAEL CULLEN: I think I would agree with the odd indefinite article in that question, but probably with practically nothing else in it at all.

Tariana Turia: What has changed is people’s rights to justice. Which tribes have actually agreed with the Government’s Foreshore and Seabed Act 2004, and what reasons did they give for agreeing to it?

Hon Dr MICHAEL CULLEN: The Government is engaged in negotiations with three groups at the present time—Ngāti Porou, Whānau-a-Apanui, and Ngāti Porou ki Hauraki. I expect to be engaged in negotiations with a fourth group before too long. A number of other groups have lodged claims for specific customary rights before the Māori Land Court. As part of those negotiations I am not asking people to give away their assertion of unbroken mana connection with the foreshore and seabed, and I hope we will be able to surprise the member at the outcome of those negotiations, which will ensure there is fairness and justice for all.

Tariana Turia: I raise a point of order, Madam Speaker. The question I asked the Minister was not who was in negotiations with the Government, but in fact who had agreed with the Government’s Foreshore and Seabed Act 2004 and what reasons they gave for agreeing to it.

Madam SPEAKER: I think the Minister did address the question and, as members know, as the Standing Orders are at the moment they cannot require a specific answer to a question. All that Ministers are required to do is to address the question.

Tariana Turia: Does the Minister agree with the statement in the 2006 Kōtuitui: New Zealand Journal of Social Sciences Online that it is difficult to imagine how creating a system to exploit the foreshore and seabed for monetary gain, including increasing mining of the foreshore and seabed activity, which is generally destructive of the environment and of ecosystems, might contribute to a concept of protection; if not, why not?

Hon Dr MICHAEL CULLEN: I will just say that social scientists are not always the best experts on legal or indeed mining matters. The Crown Minerals Act covers the issue of minerals exploration, and in fact freehold title is not the most relevant consideration under that Act. The ability to proceed under the Ngāti Apa decision would not have affected the Crown Minerals Act in that particular regard. The Foreshore and Seabed Act is not designed to allow for so-called monetary exploration. I have to say that the only people I am aware of who pushed that forward as the most important criterion were the group that came to see me after the Government announced its preliminary draft decisions on the matter, who clearly wanted to operate some kind of ticket collection agency in relation to the foreshore and seabed.

Hawke’s Bay District Health Board—Conflict of Interest

7. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: Does he stand by his statement of last week regarding the Hawke’s Bay District Health Board: “Mr Hausmann’s potential conflict of interest was known at the time of his appointment and was recorded from the outset”; if so, what was that potential conflict of interest?

Hon PETE HODGSON (Minister of Health): Yes, I do. The potential conflict of interest was disclosed by Mr Hausmann on 17 May 2005—before Mr Hausmann’s appointment was considered by the Minister or by Cabinet. It was then released to the National Party just over 20 months ago. I have another copy of the details in case the member has lost the first one I gave him.

Hon Tony Ryall: Did the Ministry of Health—[Interruption] Actually, he did not give it to me, and he will be down to apologise for that a little bit later on, after question time. Did the Ministry of Health, or anyone else, express any caution to Annette King on the appropriateness of her appointing to a district health board an individual who intended to bid for multimillion-dollar contracts of that same board; if so, who?

Hon PETE HODGSON: I will just repeat that all of the information—that is to say, Mr Hausmann’s original conflict of interest declaration, how he intended to manage it, and what the Ministry of Health thought about his management of it—was released to the National Party on or about 22 November 2005. I am happy to give the information to the National Party afresh.

Hon Tony Ryall: Has the Minister seen a Ministry of Health report of 23 August 2005 where the ministry identified a “high level of risk” associated with Mr Hausmann’s position on the board during the bidding process, and considered the options of Mr Hausmann taking leave of absence during the bidding process and the use of a probity adviser throughout the process—advice given 2 months after Mr Hausmann’s rushed appointment.

Hon PETE HODGSON: Management of conflicts of interest is an important part of all district health board deliberations, and it works as long as the board members themselves make clear to other members of the board what their potential conflict of interest is, so that it can be managed. It so happens that in Cabinets, including Cabinets yet to be formed, Cabinet Ministers have to leave the room from time to time when an issue is raised.

Sue Moroney: Is the Minister satisfied that conflicts of interest are always properly managed in the health system?

Hon PETE HODGSON: No, I am afraid I am not. The system depends on the honesty of board members. There has been one recent, somewhat infamous case, where a board member was less than transparent in declaring and updating his conflict of interest. As a result, a particularly large contract was struck down by the High Court. I am speaking, of course, of National Party member Dr Bierre.

Hon Tony Ryall: Is the Minister aware that the ministry advised of several risks to procedural fairness of having a bidder on the board of a district health board, and does he think that if Annette King had not taken short cuts over this appointment, she might have got that message much earlier on—or did she not want to hear it?

Hon PETE HODGSON: The member misses the point that most—if not most, then many—district health board members around the country have a potential conflict of interest. It is not the conflict of interest that is at issue; it is its management. The management of a conflict of interest is ordinarily the purview of the respective district health board. The boards freely seek the advice of the ministry, or of their legal advisers, or, indeed, of board members of other boards. These are normal ways of managing conflicts of interest, and that is what I suspect the member has stumbled across.

Hon Tony Ryall: Why will the Minister not answer the question of whether he has read that report of August 2005, and does he think that if Annette King had not fast tracked Mr Hausmann’s appointment, the high level of risk of so much concern to his ministry 2 months later might have prevented the cancelling of a multimillion dollar community services tender process?

Hon PETE HODGSON: In respect of the issue around the appointment of Mr Hausmann to the board, I will say to the House—not for the first time—that Mr Hausmann’s appointment was—

Hon Tony Ryall: Fast tracked.

Hon PETE HODGSON: It was not fast tracked; it was managed in an ordinary manner. Similar appointments were managed in the same manner, before and since, and will be managed in the same manner in times to come. There was nothing extraordinary about Mr Hausmann’s appointment in terms of whether it was fast or slow.

Hon Tony Ryall: It was rushed.

Hon PETE HODGSON: It was not rushed. It crossed every detail that the Ministry of Health usually reserves for cases of this ilk.

Hon Tony Ryall: If the process was not rushed, why did his spokeswoman tell the Herald on Sunday that the guidelines were not followed, and that the short cut was due to a desire to place Hausmann on the board before the pre-election period when a ban on board appointments applies?

Hon PETE HODGSON: I refer the member to information that I have already given him. The Ministry of Health had four vacancies at that time. It decided to offer advice to its Minister to proceed with one, and it said in respect of the other three that she should not proceed with those, because it was starting to get too close to an election. An election was held, from memory, in September of that year. I contrast that, if I may, with the situation when the member who asked the question was himself briefly a Minister. On 10 September 1999, a mere few weeks before that election, that member appointed to the position of chair of the Casino Control Authority—a well-paid position with no heavy lifting—Judith Collins, the person who is currently his bench mate.

Madam SPEAKER: I remind the member who has shifted her seat to the front bench of the rule that one does not use that position in order to interject. The member has been here long enough to know that.

Hon Tony Ryall: I seek leave to table a Ministry of Health document of 23 August entitled Hawke’s Bay Proposed Partnering Agreement for Community Health Services.

Leave granted.

Breastscreen Aotearoa—Programme Outcome

8. MARYAN STREET (Labour) to the Minister of Health: Has he received any reports on the success of the BreastScreen Aotearoa programme?

Hon PETE HODGSON (Minister of Health): Yes, I have. This Labour-led Government almost doubled the number of women eligible for free breast-screening 3 years ago. In 2003, 102,000 women were screened. Last year 170,000 women were screened. That is what we get when we invest in health, rather than offering misleading promises of better health on the basis of a lower investment.

Maryan Street: Why has BreastScreen Aotearoa resumed advertising?

Hon PETE HODGSON: It has done so because the capacity of facilities to undertake breast screening is growing even faster than the uptake of the programme, which is itself rising by more than 20 percent a year. This Labour-led Government has opened new facilities up and down the country, and has a total of 11 mobile units now purchased and operating. We want women to make use of those services, because screening saves lives.

Dr Jackie Blue: What is the coverage rate for women aged 45 to 49 years who participate in BreastScreen Aotearoa, and how does that figure compare with the coverage rate for Māori women in the same age group?

Hon PETE HODGSON: I have answers to neither question at my fingertips; I apologise to the member. I can, however, say the free coverage rate for that age group was, 3 years ago, absolutely zero. We have now fixed that.

Education (Tertiary Reforms) Amendment Bill—Reason for Introduction

9. Dr PAUL HUTCHISON (National—Port Waikato) to the Minister for Tertiary Education: Why has he introduced an Education (Tertiary Reforms) Amendment Bill, when in 2002 the Hon Steve Maharey, on the passage of the previous reforms, said: “These reforms represent the culmination of the government’s promise to overhaul our tertiary education and training systems.”, and what has changed?

Hon Dr MICHAEL CULLEN (Minister for Tertiary Education): The tertiary reforms are built on those of 2002. The main changes recognise the importance of the funding model to drive greater quality and relevance, and the simplification of planning procedures and documents.

Dr Paul Hutchison: Does he agree with the New Zealand Vice-Chancellors Committee that the Education Amendment (Tertiary Reforms) Bill, as drafted, “will result in an unwarranted loss of academic freedom and autonomy.”; if not, why not?

Hon Dr MICHAEL CULLEN: No. Universities have, for at least 40 years in my personal experience, been complaining that academic freedom is under threat and that they are losing autonomy. When they first started doing that, 100 percent of their funding came from the Government. They were directly controlled, they could not build a single building without permission from central government and without direct funding therefrom, and they required a great degree of approval for courses from a university grants committee, the academic subcommittee thereof. None of those things apply today, and academic freedom will continue to be of concern for universities. A Government headed by an ex-academic, seconded by an ex-academic, and with another four persons who are ex-academics has an understanding of academic freedom.

Charles Chauvel: What other reports has the Minister seen on the wisdom of making changes to the legislative framework around training?

Hon Dr MICHAEL CULLEN: I have seen a speech calling for the kind of investment in industry training that has been taking place under this Government. I welcome the fact that Mr Key supports the Government in this respect, as in so many others, and now regrets the repeal of the Apprenticeship Act pursued by the previous National Government, and the destruction of trade training that occurred in the 1990s.

Hon Brian Donnelly: What would be the harm in maintaining ministerial-approved charters for public tertiary institutions, given that they have already been developed and that these institutions are all requesting that charters be retained as long-term vision statements and as a compact between themselves and the State?

Hon Dr MICHAEL CULLEN: Well, I have to note the irony that having complained about central government control, institutions are now saying they need ministerial approval for a long-term vision statement. If institutions want a long-term vision statement they are certainly welcome to have one, but they do not require my little tick and a grade of 8.5 out of 10 in order to do so.

Dr Paul Hutchison: Is the Minister not demonstrating enormous arrogance, given that the Vice-Chancellors Committee views his bill as a direct attack on academic freedom and university autonomy, and that the bill would introduce “sweeping and unfettered bureaucratic control over university activities …”; if so, what steps is he taking to allay their concerns?

Hon Dr MICHAEL CULLEN: In return for the Government funding universities receive, there will be a requirement for an agreed 3-year plan of what their basic objectives and broad priorities are over that period of time. That is scarcely a massive interference in the autonomy of institutions. If the member ever seriously thought he would be the Minister for Tertiary Education, then he would welcome such mechanisms being put in place, given the wastage that has occurred on low-priority courses over the last 15 years.

Dr Paul Hutchison: Why is the Minister removing the centrepiece of Steve Maharey’s reforms—the charters—and replacing them with plans, given that Mr Maharey stated: “Charters will bring tertiary education strategy alive.”, or is he trying to kill off the tertiary sector just at the time Steve Maharey is about to enter it?

Hon Dr MICHAEL CULLEN: I have great difficulty understanding what the member is talking about. All we are talking about is that universities will be required to have a clear strategic direction and a sense of priorities consistent with their placement in the education system, in order for them to receive funding from the Government. In other words, the Government has some right to expect that what is done bears some broad relevance to New Zealand’s social and economic development. That is not an interference with academic freedom. If the member had ever been involved in a subjective subject such as history, he would know that academic freedom is not about the freedom to teach whatever one likes for whatever cost; it is the freedom to express views about the areas that one is responsible for, and to do so broadly within the community without facing the danger of being penalised as a consequence of doing that. Unfortunately, in my experience, too many academics these days do not express such views publicly enough.

Dr Paul Hutchison: What is the Minister’s response to the view of the New Zealand Vice–Chancellors Committee that “none of the world’s leading universities are subject to the degree of control proposed in this Bill.”, and that “In no other Western democracy has a state sought this degree of control over a university’s teaching and research.”?

Hon Dr MICHAEL CULLEN: That is an extraordinarily bold assertion given the nature of many of the European tertiary education systems, where there is a very large level of central government involvement in the management of those systems. It is also true that no other system I am aware of has a pure “bums on seats” funding model, where we do not care about what anybody does, or about the quality of what they are doing, as long as they enrol in something or other 101 and we pay $6,473 in order to support that student.

Dr the Hon Lockwood Smith: So people are all that stupid, are they? What an arrogant view of your fellow—

Hon Dr MICHAEL CULLEN: That is the basis of the current funding model, which Dr Lockwood Smith—not the most modest member of Parliament—helped put in place.

Dr Paul Hutchison: I seek leave to table two articles. The first is a submission from the University of Auckland, where this bill is described as establishing “sweeping and unfettered bureaucratic control …”.

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

Dr Paul Hutchison: And the second—

Madam SPEAKER: I remind members that points of order are heard in silence.

Dr Paul Hutchison: I seek leave to table the second document, from the New Zealand Vice–Chancellors Committee, where it is stated that in no other Western democracy has the State sought this degree of control over universities.

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

Reserve Bank—Governor’s Performance

10. RODNEY HIDE (Leader—ACT) to the Minister of Finance: Is he satisfied with the performance of Reserve Bank governor Alan Bollard; if so, why?

Hon Dr MICHAEL CULLEN (Minister of Finance): Yes; he has had continued support from the board of the Reserve Bank, as well as from myself. He has provided much useful advice on monetary policy and has undertaken a major upgrade of the bank’s prudential supervisory role, an often forgotten part of the bank’s functions.

Rodney Hide: Does the Minister support 100 percent the independence of the Reserve Bank governor, when it is more than likely he will hike interest rates come Thursday, and therefore precipitate a recession heading into an election year, in order to get the economy and inflation back under control?

Hon Dr MICHAEL CULLEN: I fully support the independence of the Reserve Bank governor. Unlike that member and any number of other members, I do not predict what the governor is going to do or comment on what he has done after he has done it.

Madam SPEAKER: Is this a supplementary question? Please be seated for a second. I am not sure whether this affects just me today, but there is a tremendous amount of traffic around the Chamber. From my point of view, that makes it very difficult to know who wishes to speak, and at what time members wish to speak. I know there is business to conduct, but I ask members to please take it outside the Chamber.

R Doug Woolerton: Is the Minister prepared to look at constructive enhancements to the Reserve Bank of New Zealand Act such as those being promoted by New Zealand First, which are designed to help the governor to do a more effective job?

Hon Dr MICHAEL CULLEN: I am sure the member means to help. The question, of course, is whether those proposals would actually be any help.

Rodney Hide: Will the Minister consider doing the one thing that could assist the New Zealand economy and New Zealanders to get through the next 12 months without a recession, which is to cancel the forecast election-year spend-up, with $2 billion-plus of unallocated spending, which Treasury estimates to be a 1.7 percent fiscal stimulus; and will the Minister consider putting his own fiscal house in order, to assist monetary policy?

Hon Dr MICHAEL CULLEN: Let us first of all take the year just finished. In that year we have probably taken over $4 billion of demand out of the economy through the combination of both the cash surplus of over $2 billion and a contribution to the Superannuation Fund of over $2 billion. That is over $4 billion taken out of the economy, soaking out demand. It is true that the forecast reduction of demand by Government action in the next year will not be as high as that, but it was not forecast to be as high a year ago, either.

Dr the Hon Lockwood Smith: Why is Treasury forecasting such a big fiscal impulse, then?

Hon Dr MICHAEL CULLEN: It is still forecast to be positive. If Dr Lockwood Smith is now saying that National policy is to cut that $2 billion fiscal allowance out, I invite him to explain how Vote Health will supply the same services with no increase in money, despite increasing costs and despite increasing wages and salaries for doctors, nurses, and others; how schools are not going to charge very much more for fees for their students if they get no increase in their operating grants and teachers get no increase in their salaries; how it will be explained to superannuitants that they will not get any increase in New Zealand superannuation over that period; and how indeed all the elements of Government that depend upon high staffing levels, such as the police, corrections, and many others are going to cut their staff numbers because they have no money to pay for additional salaries.

Dr the Hon Lockwood Smith: If the Minister is satisfied, as he has just said, with the performance of Dr Bollard, why has he continually undermined Dr Bollard through his fruitless talk of supplementary instruments and the possibility of unilaterally changing the policy targets agreement by using section 12 of the Reserve Bank of New Zealand Act, and have his rather pointless musings not in fact made Dr Bollard’s job a bit harder?

Hon Dr MICHAEL CULLEN: It is wonderful to have the chance to respond to that member. The supplementary stabilisation instruments were suggested by Dr Bollard.

Rodney Hide: Is the House to conclude that this Labour Government puts its election-year spend-up ahead of the medium and long-term success of the New Zealand economy; and that it will see productive New Zealanders driven to the wall because the Government itself will not put its own spending in order and reduce that fiscal stimulus, to assist in monetary policy and indeed to help Dr Alan Bollard to do his job, rather than have him do it all on the basis of interest rates?

Hon Dr MICHAEL CULLEN: Let me try to run through this again for the benefit of the member, and indeed of many other members. The only reason the fiscal impulse looks large is that fiscal policy has been so contractionary over the last 2 to 3 years, soaking out billions of dollars every year in demand from the economy. That is the sum of the money going into the cash surplus plus the money going into the Superannuation Fund, which does not feed directly into demand. The only alternative I am aware of is that the members opposite are promising more money for almost every category of spending plus $2.5 billion a year of tax cuts, and are saying that that is a tighter fiscal policy than the current policy. That is a triumph of ideology over reality.

Apples—Australian Market Access

11. Hon DAVID CARTER (National) on behalf of TIM GROSER (National) to the Minister of Trade: What progress, if any, has he made in the decades-long dispute to allow the importation of New Zealand apples into Australia?

Madam SPEAKER: I call the Hon Phil Goff. I understand that you have an answer that is longer than normal, but not too long.

Hon PHIL GOFF (Minister of Trade): It is slightly longer, with the leave of the House. New Zealand apples have been locked out of the Australian market now for 85 years. Over the last 9 months we have made some progress in having that ban lifted. In November the Australians published their final import risk analysis relating to apple imports from New Zealand, and, in March, their final policy determination. These concede, for the first time, the possibility of Australia allowing apples from New Zealand to have access, but they also continue restrictions that we regard as being scientifically unjustified. Without accepting those restrictions, we have instructed Biosecurity New Zealand to negotiate with its Australian counterpart a work plan and a standard operating procedure, to see what these conditions would mean in practice for access of our apples. We are awaiting the Australian response to the standard operating procedure; it now, regrettably, appears to be further delayed because of pressure from the Australian apple industry and political sensitivities within the Australian system in the lead-up to the election.

Hon David Carter: How much longer does the Government need to reach the conclusion that raising this diplomatic issue with the phytosanitary committee is largely meaningless unless it is backed by a clear determination to proceed to a formal disputes settlement?

Hon PHIL GOFF: Taking the matter to the World Health Organization (WTO) disputes procedure has always been a live option, and I have to say that, given the latest efforts by Australia to frustrate the finalisation of the standard operating procedures, it becomes an even more likely outcome.

Hon David Carter: Just do it.

Hon PHIL GOFF: The member can say “Just do it.”, but actually this Government has worked very closely with the pipfruit industry, and it was the view of the pipfruit industry—and it was shared by ourselves—that the better process to take was to finalise the procedures within the Australian system, to see whether we can get meaningful access commercially. The member can shake his head, but that is the view of his apple growers as represented in the pipfruit industry and the action group. We are working closely with that group. We have said at all times that there is the option of taking the Australians to the WTO. The downside to that is, of course, that it would take several years to get finalisation. We will continue to work in close consultation with the industry and make our decisions accordingly.

Russell Fairbrother: What consultation has the Minister had with the pipfruit industry regarding the question of apple access to Australia?

Hon PHIL GOFF: Over the last 9 months, I think, I—along with Jim Anderton as the Minister of Agriculture, and Rick Barker as the Minister of Internal Affairs—have met with the pipfruit industry on three occasions, in December, in March, and in May. Indeed, yesterday we had a teleconference with the industry to bring it up to date with the latest moves within Australia. I think it is fair to say that the industry and the Government share the same analysis of the problem, and share the same strategy in terms of addressing the problem. I look forward to continuing the very constructive and positive partnership we have with the industry.

R Doug Woolerton: What results did the previous administration have in its 9 years of Government—or any other administration in the last 80 years—in overcoming the issue of access of New Zealand apples to the Australian markets?

Hon PHIL GOFF: Of course, the answer is obvious: they got absolutely nowhere. But I do not want to make petty party politics, like the Opposition is trying to do, over this issue. I have indicated to Tim Groser, my counterpart, that I am happy to work closely with him, and will do so. This is a case for a “New Zealand Inc.” approach. That is what the Government is doing with the industry itself, and we are happy to do it with the Opposition, provided that it puts politics to one side.

Chris Tremain: When the Minister said in his speech this morning to the pipfruit industry: “I am confident that a case taken to the WTO would succeed.”, did that mean that he, after years of refusal, now agrees with the National Party that the only way to resolve this issue is to immediately begin a disputes process against Australia at the WTO?

Hon PHIL GOFF: Again, I prefer to agree with the industry, which has most at stake here, rather than with the member and his efforts to make politics out of the issue. At this stage the industry is in agreement with the Government that we want to finish the standard operating procedures process, so that if there is any chance of our getting our apples in, they will get in. I am sure that once New Zealand apples are on the market, there will be consumer demand for them. I have never ruled out—nor has Jim Anderton—taking the issue to the WTO. We will do that if it is seen by ourselves and the industry as the most effective way of resolving this dispute. If we do it, the way will be open for the Australians at any time to come back to try to negotiate an earlier deal than the WTO might provide, on the basis that that would provide real access for our apples, and on the basis that any restrictions would be scientifically based. By that I mean true science, and not the political science that Alexander Downer has famously quoted.

Russell Fairbrother: What are our chances of winning a WTO case?

Hon PHIL GOFF: I am very confident at this point, our having exhausted as many avenues as we can within the Australian system, that both on process and on substance our case would be upheld at the WTO. I believe that our case is scientifically based, and I believe that the precedent established in the case involving United States apples gaining access to Japan is a good precedent. I would, however, point out that probably 5 or 6 years after that case was first taken to the WTO, Japan still does not allow United States apples to have access, notwithstanding the United States winning a clear victory in the disputes process. So it is a little bit more complex than some members of the National Opposition might imagine.

Carbon Emissions—Conservation Estate

12. STEVE CHADWICK (Labour—Rotorua) to the Minister of Conservation: What contribution is the conservation estate making to New Zealand’s efforts to offset carbon emissions?

Hon CHRIS CARTER (Minister of Conservation): Climate change is the most significant challenge facing the world today. I recently announced that the Department of Conservation will tender to commercial investors six pilot projects to store carbon on the conservation estate, as part of the Labour-led Government’s commitment to sustainability. Successful projects will be a win-win for conservation and the environment, with the establishment of new forests to store carbon, and intensive pest control of exotic pests that emit carbon in areas not currently managed by the department.

Steve Chadwick: How do these pilot carbon sequestration projects fit with other initiatives from the Labour-led Government to tackle global climate change?

Hon CHRIS CARTER: Our 8 million hectare conservation estate makes a major contribution to New Zealand’s carbon profile. Since 1999 the Labour-led Government has pursued an active programme of protecting native forest and adding additional native forests to the areas under permanent protection. Just recently, my colleague the Minister of Forestry also announced an initiative to encourage the use of sustainable timber in new Government building projects.

Gerry Brownlee: Can the Minister confirm that the calculation of New Zealand’s future Kyoto Protocol liabilities is based on what our position was in 1990, and takes no account of extra sinks that may now be in the conservation estate, and has his ministry done any work to see whether the extra sinks can be considered as part of our current carbon profile?

Hon CHRIS CARTER: The Department of Conservation has been profiling a whole range of issues through which we can act as a responsible custodian of the conservation estate, and as active agents in dealing with the changing climate on Earth by storing carbon. A short answer to the member’s question is that we are looking at a range of issues to see where we can be helpful.

Gerry Brownlee: I will try to be more precise for the Minister. Does he accept that the carbon liability that we will face in 2012 takes account of only the sinks in our conservation forests up until 1990, and that since 1990 considerable extra carbon has been stored in the conservation estate; and what work is his department doing to ensure that the calculation is changed so that we get the benefit of that additional carbon store, because all the talk in the world about managing it means nothing if we do not get the credit for it?

Hon CHRIS CARTER: I am not sure whether I would agree with the member that there has been considerable addition to carbon sequestration in the conservation estate. We still battle, for instance, with 60 million possums chewing their way through our forests. Total pest numbers have not fallen. Although the area of the conservation estate has grown by some 350,000 hectares under my stewardship—

Gerry Brownlee: I raise a point of order, Madam Speaker. We seem to be at cross purposes here. I asked about carbon credits. Carbon credits are not furry and noxious like possums. I wonder whether the Minister might start talking about what is under the trees rather than what is in the trees.

Madam SPEAKER: I think the member should allow the Minister to finish his answer.

Hon CHRIS CARTER: The member in his question said that since 1990 the conservation estate had increased the amount of carbon it was storing. I dispute that. In fact, if anything, with the onset of growing numbers of alien pests we probably have less carbon stored now than we had before

ENDS

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