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Questions And Answers – Wednesday, 2 April 2007

Questions And Answers – Wednesday, 2 April 2008

1. Taxation—Cuts

[Uncorrected transcript—subject to correction and further editing.]

1. Hon BILL ENGLISH (Deputy Leader—National) to the Minister of Finance: Does he stand by his statement regarding tax cuts that “I am sure there will be something for everybody. But that means individual amounts are not likely to be large, given that the money is spread very thinly.”; if not, why not?

Hon Dr MICHAEL CULLEN (Minister of Finance) : Yes, but I am sure that the member has long since discovered size is not everything.

Hon Bill English: Does the Minister recall his statement less than a year ago that cancelling the “chewing gum tax cuts”, which would have come into effect yesterday, was not difficult, because “a small tax cut now would be spent and then gone”; and what is the difference between the small tax cut that he cancelled and the cuts he described yesterday as “not likely to be large”?

Hon Dr MICHAEL CULLEN: I said that size is not everything, but it is something. Certainly, what is announced in the Budget will be significantly larger than the simple threshold adjustment, and the tax cuts that were to flow from it, announced in 2005.

Charles Chauvel: When the Minister made the statement that he believed there would be something for everyone, was he stating a personal view or his view as Minister of Finance?

Hon Dr MICHAEL CULLEN: Both; there is a pleasing identity between the two. That contrasts strongly with the view expressed by John Key this morning on breakfast TV, where he said: “Well, I mean, in a sense—I never have a personal view these days. I mean, if I express a personal view, that obviously turns into the party view. I am the, the, the voice piece if you like—or the face—of the National Party. And so, no, I don’t really have the ability to give a personal view, um.”

Hon Bill English: Does the Minister stand by his statement that “tax cuts are not self-funding. If unaccompanied by expenditure cuts they simply lead to burgeoning deficits and debt.”, and that “across-the-board tax cuts are likely to be merely stimulatory and to prompt their own undoing by stoking inflation.”; if he does not stand by those statements any more, why not?

Hon Dr MICHAEL CULLEN: I have outlined—[Interruption] My goodness me, he is chirping in again. I have outlined four tests for personal tax cuts. Each of those has been denied by the National Party—not least, of course, because John Key has now made it clear that whatever is in the Budget, he will promise more, no matter what it takes.

Hon Bill English: When the Minister said yesterday “I am sure there will be something for everybody”, does he mean people who earn less than $9,500 per year?

Hon Dr MICHAEL CULLEN: When I said “something for everybody”, I was expressing a personal view that is also the policy of the Government.

Hon Bill English: When the Minister said yesterday that “I am sure there will be something for everybody”, does everybody include people who earn under $9,500?

Hon Dr MICHAEL CULLEN: I have an array of dictionaries available for the member if he does not understand what “everybody” means.

Hon Bill English: When the Minister said yesterday “I am sure there will be something for everybody”, does “everybody” mean everybody?

Hon Dr MICHAEL CULLEN: Let me put the member’s mind at rest. It does include him.

Rt Hon Winston Peters: Does the Minister have any reports that reflect on political support for tax cuts; and, having regard to what happened yesterday and also in the 1998 Budget—when the Treasurer was not from the National Party—what is the record of National where tax cuts are concerned?

Hon Dr MICHAEL CULLEN: At best it could be described as cracked, I think. Actually, it is very weak indeed—in particular, in the business tax area. National has not made any significant moves in that area within living memory.

Hon Bill English: Can the Minister confirm that the only way to make sure that there is something for “everybody” is to create a tax-free threshold, where people can earn income up to a certain level, free of tax?

Hon Dr MICHAEL CULLEN: No, but let me just clarify one point. Of course, one has to be a taxpayer before one actually benefits from any tax cuts.

Charles Chauvel: How much tax relief has the Labour-led Government delivered in recent Budgets, and what support has there been for this tax relief?

Hon Dr MICHAEL CULLEN: As at this year New Zealanders are receiving $4.5 billion in a variety of forms of tax relief. The biggest of those, of course, has been the Working for Families package, which has reduced by some 70 percent the amount of tax paid by a single-income family on the average wage with two dependent children. All of those tax cuts, whether for families, savers, or business, have been opposed by the National Party.

Rt Hon Winston Peters: Has the Minister any historical reports relating to a surtax where the promise was to remove it, but, in fact, under Ruth Richardson when the National Government came in, it moved the tax up to—effectively, as an impost—at its worst, 92c in the dollar?

Hon Dr MICHAEL CULLEN: I well recall a speech, in the Wellington Town Hall, given by the then leader of the National Party, which promised to remove the surcharge “no ifs, no buts, no maybes”—

Hon Members: “No ifs, no buts, no maybes”!

Hon Dr MICHAEL CULLEN: Even 18 years on, we can still do it! At the next Budget the National Government announced not a removal of the surcharge but its replacement with a much more vicious income and asset test.

Rt Hon Winston Peters: So that the public can proceed into the next election with some confidence on this issue, has the Minister any reports as to which members of Parliament remain in that party, supporting the same policy today?

Hon Dr MICHAEL CULLEN: Not the least of them is the Opposition spokesperson on finance, who only last year, I think, said retirement income provision in New Zealand is too generous. One can understand what that means, in that historical context.

2. Investment—Foreign

[Uncorrected transcript—subject to correction and further editing.]

2. R DOUG WOOLERTON (NZ First) to the Minister of Finance: What was the total value of foreign investment inflows into New Zealand in the year ended 31 March 2008, and what was the total value of income derived from foreign investment in New Zealand in the same period?

Hon Dr MICHAEL CULLEN (Minister of Finance) : In the year to 31 December 2007, which is the last period for which we have the numbers, total foreign investment flows into New Zealand totalled $26 billion. This comprised $3.9 billion of direct investment, $16.1 billion of portfolio investment, and $6 billion of other investment. In the year to 31 December 2007, income flows derived from foreign investment in New Zealand amounted to $16.2 billion.

R Doug Woolerton: Can the Minister confirm that the total value of income derived from foreign investment in New Zealand in the last 5 years equates to more than the total core Crown revenue in the last financial year, and is he concerned that foreign investors are extracting the equivalent income from New Zealand investments each year of more than a fifth of the Government’s total annual revenue?

Hon Dr MICHAEL CULLEN: I do not have the numbers to confirm the first part of that question, but from a rough estimate in my head, I am sure that that would be correct. I can confirm that those income flows are very substantial, indeed. Of course, one of the issues is that that reflects the high level of dependence by New Zealand on offshore borrowing for its investment purposes, and the only answer to that, at the end of the day, is to increase New Zealand’s own internal savings rate. It is therefore worth repeating again that the National Party has voted 40 times against the KiwiSaver scheme.

R Doug Woolerton: Is he happy with the current situation that sees around 10 percent of New Zealand’s GDP each year ending up lining the pockets of overseas investors, and would he agree that such figures show that the idea of boatloads of cash departing New Zealand for foreign shores is not too far from the mark?

Hon Dr MICHAEL CULLEN: It is, of course, worth reminding ourselves that not all of that income flow is repatriated offshore; a good part of that is reinvested back within New Zealand. Indeed, our figures on foreign investment flows, and on the current account, assume that any income earned by an offshore-owned entity is, in fact, booked against, if one likes, New Zealand, in that regard. Am I happy with that situation? I am not happy with a situation where our own savings rate is so low that we are excessively dependent upon foreign investment flows. I think it is true to say that New Zealand will be needing, at any time for the foreseeable future, significant inflows of foreign investment in order to enable this economy to grow and develop.

R Doug Woolerton: Would the Minister agree that an ever-increasing flow of foreign investment into New Zealand, and the massive extraction of profits from that investment, means that increasingly more Kiwis find themselves working for foreign masters while receiving fewer of the benefits of their labour?

Hon Dr MICHAEL CULLEN: I am not really sure that that is entirely true. A good part of those capital flows coming into New Zealand is, in fact, borrowings by the banks in New Zealand from offshore to on-lend into New Zealand, because of the cheaper availability of capital until recently, particularly offshore. It is by no means true that necessarily what that leads to is more New Zealanders being employed by offshore companies. Much of that money is invested back into New Zealand – owned businesses and into New Zealand housing stock owned by New Zealanders.

R Doug Woolerton: I seek leave to table figures from Statistics New Zealand showing the increasing flow of foreign investment into New Zealand.

 Leave granted.

R Doug Woolerton: I seek leave to table figures from Statistics New Zealand showing the increasing income derived from foreign investment in New Zealand.

 Leave granted.

3. Public Health System—Confidence

[Uncorrected transcript—subject to correction and further editing.]

3. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: Does he have confidence in the public health system, and why?

Hon DAVID CUNLIFFE (Minister of Health) : Yes, and how nice it is to have a Government question asked by a member of the Opposition. Just yesterday nationwide patient satisfaction stats were published, with a near record figure of 88.5 percent of patients very satisfied with the service they received. The same survey reported that 100 percent of patients in triage 1—the most serious category of emergency care—were treated immediately. In October last year an independent evaluation of the Labour-led Government’s Primary Health Care Strategy showed a 24 percent increase in consultation rates for older New Zealanders. And there is so much more good news.

Hon Tony Ryall: Would the Minister support an Auditor-General inquiry into the Hawke’s Bay District Health Board’s handling of conflicts of interest, when in the Health Committee this morning the chief executive, Chris Clarke, confirmed that no other tenderer had been given access to the tender documents that Mr Hausmann received and changed in his favour?

Hon DAVID CUNLIFFE: Unlike the member, I respect the integrity and independence of the Auditor-General. Any such decision is for the Auditor-General to make. But I note in passing that the member opposite managed to leave the select committee the moment people started talking about health care.

Jill Pettis: I raise a point of order, Madam Speaker. I believe that the member Mr Ryall has reported what went on at the select committee this morning in regard to that question slightly inaccurately. The chief executive, after repeated questions from Mr Ryall, said he took no part in that process. He did not say what the member has just implied.

Madam SPEAKER: That is not really a point of order; it is more a point of debate or information.

Lesley Soper: Can the Minister please provide any further examples of why he has confidence in the health system?

Hon DAVID CUNLIFFE: Yes. Just today we launched the Autism Spectrum Disorder Guidelines—a world first. The orthopaedic initiative has funded over 8,000 hip and knee replacements. The cataract initiative has funded cataract surgery for 4,174 New Zealanders. In the last year 112,507 New Zealanders have received elective surgery. Four million people now benefit from primary health organisation enrolments. And 74 percent of children under 6 get free doctors’ visits. There is so much more good news. I have just had a petition from 600 women in south Canterbury thanking us for breast screening.

Hon Tony Ryall: Is the Minister satisfied that when questioned about Audit New Zealand’s extraordinary criticism of Mr Clarke for failing to comply with the board’s own procurement policies or public sector good practice, Mr Clarke told the select committee that he would have to “take that on the chin” and that he would put it in “his learnings paper”; how accountable is that?

Hon DAVID CUNLIFFE: I have the greatest respect for the Office of the Controller and Auditor-General, but I have rather less respect for that member’s recollection of select committee proceedings.

Hon Tony Ryall: Is it acceptable for district health board management to be working with a favoured tenderer behind the scenes, which no other tenderer knew about, and surely there should be more accountability for behaviour like this than sticking it in a “learnings paper”?

Hon DAVID CUNLIFFE: That is a question the member might want to address to former chairman Kevin Atkinson, who I understand has a brother with some interest in Royston Hospital, for which a $600,000 contract was apparently not tendered.

Hon Tony Ryall: Should the Auditor-General not inquire into this matter, when the chairman has been investigated and dismissed, and Mr Hausmann has been investigated and not reappointed, but not one person in management has been scrutinised by the Minister’s review panel for his or her involvement in breaching the board’s own policies and guidelines, and when the chief executive who oversaw all of this is still sitting there in his job?

Hon DAVID CUNLIFFE: I understand that the Office of the Controller and Auditor-General is consulting with all relevant parties, including the member. He will have had the opportunity to put his case to the office in private. It is quite clear that ultimate responsibility for management rests with the board—

Hon Dr Nick Smith: But you’ve sacked them.

Hon DAVID CUNLIFFE: —and now rests with the commissioner. I understand from the commissioner—and it was made clear to the select committee this morning—that he is satisfied that management can now implement the strategic direction he has put in place. I challenge the member: what is it about sustainable health-care for the people of Hawke’s Bay that he does not want?

Dr Jonathan Coleman: How believable is it that the Hawke’s Bay District Health Board’s email files for the first half of May were undamaged, for early June were undamaged, but for the crucial 2 weeks when Chris Clarke and Peter Hausmann were colluding on the tender document via email were mysteriously damaged beyond repair—how implausibly convenient is that?

Hon DAVID CUNLIFFE: It appears that the apprentice health spokesperson is raking over some rather old coals, which did not seem to be of sufficient interest to the independent review panel for its members to make salient in their report. Disagreeing with the conclusion of an independent report does not give a member of Parliament the right to undermine it.

Hon DAVID CUNLIFFE: I seek leave to table a petition from 600 women in south Canterbury who want to say thanks.

 Leave granted.

4. Research and Development Tax Credits—Reactions

[Uncorrected transcript—subject to correction and further editing.]

4. H V ROSS ROBERTSON (Labour—Manukau East) to the Minister of Research, Science and Technology: What reaction has he received from the research sector to the research and development tax credits, which became available from 1 April 2008?

Hon PETE HODGSON (Minister of Research, Science and Technology) : The 15 percent research and development tax credit that became available yesterday has been welcomed by businesses and researchers throughout New Zealand. Anthony Scott, the Chief Executive of Science New Zealand, for example, has said that the tax credit, in combination with New Zealand Fast Forward, represents an unprecedented investment in New Zealand science. He likened it to Vogel’s investment in the rail system, which transformed the New Zealand economy in the late 1880s. The National Party voted against this tax credit, and the National leader labelled New Zealand Fast Forward a gimmick. He is now out of step with almost everyone, including one or two in his own caucus.

H V Ross Robertson: Can the Minister tell the House whether he has a view about whether this tax credit could be used to develop solutions to the threats posed by climate change?

Hon PETE HODGSON: My personal view is that it can, and that is also the Government’s policy. It is also my personal view, and that of a rapidly growing number of businesses, that climate change is real and that solutions are real business opportunities. However, the personal view of the Leader of the Opposition was offered up publicly on television this morning, and I quote what he said: “Well, look, actually, in terms of things like climate change, I believe climate change is occurring, um, yeah. I think the evidence supports that, but, you know, we have a public position. We support, ah, we support those positions collectively.” That is what clarity increasingly looks like these days, under the National Party.

5. Violent Offences—Increase

[Uncorrected transcript—subject to correction and further editing.]

5. SIMON POWER (National—Rangitikei) to the Minister of Police: Can she confirm the number of violent offences increased by 12.3 percent from 2006 to 2007?

Hon ANNETTE KING (Minister of Police) : Yes. I can also confirm that the police advise that the increased number of violent offences in the statistics is almost entirely driven—5,810 out of the extra 6,252 offences—by recorded family violence. As Professor Mike Rowe from the institute of criminology at Victoria University said yesterday: “It may sound rather bizarre, but it is actually good news, because I think this suggests that people are more likely to report these offences to the police than perhaps they once were.”

Simon Power: Can the Minister confirm that the number of violent offences has increased by 43.6 percent since 1999, meaning that there are 333 more violent offences a week now than before Labour took office; and can she also confirm that she is presiding over the highest rate of violence per head of population ever?

Hon ANNETTE KING: I can confirm that there have been increases in violence in New Zealand. I can also confirm that most of it is driven by reported domestic violence. I have to say to the member that I am very concerned that the National Party has joined the domestic violence deniers, because it is not—[Interruption] This is a serious issue, because whenever the National Party talks about violent crime, it wants to discount domestic violence. As long as that party discounts domestic violence we will never get on top of it, because those members are supposed to be political leaders. We have seen massive increases in reported domestic violence in New Zealand. We ought to be—

Hon Bill English: I raise a point of order, Madam Speaker. Clearly any member of Parliament from any party would find the Minister’s allegation that MPs of that party endorsed domestic violence deeply offensive. I ask that she withdraw and apologise.

Madam SPEAKER: The Minister has been asked to withdraw and apologise.

Hon ANNETTE KING: I withdraw and apologise.

Hon David Benson-Pope: What reports has the Minister seen about the number of murders in 2007?

Hon ANNETTE KING: The number of murders in New Zealand is at an all-time decade low, at 45 murders. In fact, the highest in that decade was in 1997, with 66 murders. But if we were to be listening to members of the National Party and their comments on violent crime, we would think that New Zealand had out-of-control murders. Every one of those murders is a tragedy, but I think it is beholden on members of this House to present the facts to the public, rather than trying to crank up a political agenda for themselves.

Simon Power: Can the Minister confirm that the number of grievous assaults has increased by 93.6 percent—or almost doubled—since Labour took office and that, within that category, assault with a weapon is up by two-thirds, wounding with intent has more than doubled, and injuring with intent has tripled?

Hon ANNETTE KING: Yes, there certainly has been an increase in these offences. But thank goodness this Government, in conjunction with New Zealand First, has been prepared to put additional police on the street so that more of the people who commit these crimes can be caught.

Simon Power: Can the Minister confirm that violence by youth offenders aged 14 to 16 has gone up 47 percent since Labour took office, and that in the space of just 1 year—the year relating to the statistics released yesterday—violence by children aged 10 to 13 has increased by 30 percent?

Hon ANNETTE KING: There is certainly more increase in youth crime. Fortunately a lot of it arises out of the year in which we put in place, in South Auckland in particular, a multi-agency approach to youth crime in terms of gangs that has been incredibly successful in suppressing youth gang activity in the South Auckland area.

Te Ururoa Flavell: Tēnā koē, Madam Speaker. Kia ora tātou e te Whare. How are the police equipped to deal with the incidents of family violence in isolated rural areas?

Hon ANNETTE KING: No longer is family violence the responsibility of one or two officers. It is the responsibility of every police officer, so any police officer serving in a rural area is required to take family violence seriously. It is no longer called “just a domestic”, as it was for many years, and one can see in the prosecutions by the police, which have more than doubled in the last decade, that the police do take it seriously.

Simon Power: Can the Minister state categorically that the 43 percent increase in violent offences is due to an increase in reporting rather than an increase in violence; if so, should the next round of crime statistics show a decrease in the number of violent offences, will she be claiming that this represents a welcome reduction in violence or a disturbing decline in reporting?

Hon ANNETTE KING: What I will predict is that there will be more reported family violence in the next statistics, because we are not going to stop programmes and campaigns to get women in particular to come forward and report family violence. We should be welcoming that reporting—welcoming it—not criticising it and somehow minimising it because it happens to be family violence. It is important violence, in that it is within a person’s own home. It is much harder to deal with than street violence because we cannot have police patrolling bedrooms and lounges, and it is an issue that all of us, in terms of a community—politicians, local government, and others—need to address together. It is only going to change over time, and with a change in attitude.

Simon Power: How does the Minister’s claim that an increase in the reporting of domestic violence is causing the increase in violent offences, as an isolated statement, explain overall the fact that there are now over 1,000 more robberies a year than there were in 1999?

Hon ANNETTE KING: The statistics and the comments I used came from the New Zealand Police. I do not have any reason to doubt those comments. The New Zealand Police made it clear in its statement yesterday that when we look at the recorded cases of violence we see that overwhelmingly they have come from increased reports on family violence. Of course there are reports of other crime in New Zealand but overall the picture of crime in New Zealand has been decreasing over the last decade, not increasing.

Rt Hon Winston Peters: I wonder whether the Minister has heard any reports of suggestions to deal with the violence, such as that by Bob Clarkson MP, who suggested like the grand old Duke of York that offenders should be sent on long marches as a solution to their problems.

Bob Clarkson: Dickhead!

Hon ANNETTE KING: I have not heard—

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. Bob Clarkson has just said something about himself that he should not say in this House. He used a word beginning with “d” that I cannot repeat. It was “d-head”, and it well explains what he looks like in the mirror but he cannot say it in this House. I ask him to withdraw and apologise.

Madam SPEAKER: Yes, would the member please withdraw and apologise.

Bob Clarkson: I withdraw and apologise.

Hon ANNETTE KING: No, I have not heard of this particular solution to crime in New Zealand. I have heard that the Leader of the Opposition believes that the answer to all youth crime is to send youth to boot camps, something that has actually failed in New Zealand. That is the only answer we have heard on crime from the Opposition so far.

6. Tax Revenue—Increase

[Uncorrected transcript—subject to correction and further editing.]

6. HEATHER ROY (Deputy Leader—ACT) to the Minister of Finance: How much additional tax revenue has been raised each financial year since he increased the top personal income tax rate to 39 percent, and will he admit that his overtaxing of hard-working Kiwis has far exceeded his December 1999 claims that “The increase will affect only about five percent of the workforce” and “The change is expected to bring in around $400 million a year”?

Hon Dr MICHAEL CULLEN (Minister of Finance) : The net additional tax revenue in the first year, which was 2000-01, was indeed around $400 million—it was $393 million. The excellent growth in the economy and in incomes under this Labour-led Government has seen that amount progressively rise to $447 million, $494 million, $540 million, $616 million, $699 million, and $791 million. I note the implication in the member’s question that only those earning over $60,000 a year are hard-working. If that absurd proposition were true, then there are a lot more hard-working New Zealanders under Labour than there were under National.

Heather Roy: Given that the Minister has fleeced hard-working taxpayers by much more than he had expected, even in his wildest dreams, will he make a commitment now to abolish the 39 percent personal tax rate in the Budget; if not, why not?

Hon Dr MICHAEL CULLEN: Already we see the ACT party’s questions being written by Roger Douglas, only a week or so after he re-emerged from the crypt. I note that in that supplementary question the member again equates hard-working people with those earning over $60,000 a year. I tell her that the vast majority of New Zealanders in full-time employment earn less than $60,000 a year, and many of them work a lot harder than some of those who earn over $60,000 a year—not directing my gaze too intensely.

Louisa Wall: How much less tax was paid by a single-earner family on the average wage with two children in December 2007 compared with December 1999?

Hon Dr MICHAEL CULLEN: Since December 2007 such a family has paid $1,941 per annum in tax, after allowing for the Working for Families tax credit. In 1999 they were paying $4,655, allowing for the then family tax credit. I notice that neither National nor ACT supported those tax cuts.

Hon Bill English: Does the Minister regard people who earn the average wage who do not have children, and therefore do not qualify for Working for Families, as hard-working; if he does regard them as hard-working, why is he making them pay more of their income in tax now than they did when he came into Government?

Hon Dr MICHAEL CULLEN: Clearly, they are hard working but, clearly—equally—they gain from a range of other policies, not the least of which being that, firstly, they now have assistance to get a work-based superannuation scheme, which National voted against 40 times; secondly, when they retire they will receive a higher pension than would have occurred under National’s policy; thirdly, if they need to go to the doctor they have a reduced doctor’s fee; and, fourthly, if the doctor prescribes medicine, they get that medicine more cheaply than they would have done under a National Government.

Heather Roy: Can he foresee a situation ever arising where he would abolish the 39 percent rate of personal income tax; if so, what is it?

Hon Dr MICHAEL CULLEN: If the member is fishing about the Budget, I think I can say that the one thing people are not expecting is a cut in the 39 percent tax rate. I note, indeed, that the National Party, at the last election, did not promise a cut in the 39 percent tax rate.

Heather Roy: I raise a point of order, Madam Speaker. My question was very specific and it did not relate to the Budget, at all. It asked whether he could foresee a situation ever arising when he would abolish it, and he failed completely to address that.

Madam SPEAKER: I think the Minister did address the question. As members know, they cannot get a specific answer to their questions.

7. Housing—Affordability

[Uncorrected transcript—subject to correction and further editing.]

7. PHIL HEATLEY (National—Whangarei) to the Minister of Housing: Does she agree with the findings of the Department of the Prime Minister and Cabinet’s own house prices unit that states: “All measures of affordability have declined.”, with a “growing group of renters, at all but the highest levels of income, whose home ownership aspirations will not be met given current prices, interest rates and levels of income.”, and why does she think this has occurred?

Hon MARYAN STREET (Minister of Housing) : Yes, I agree with the conclusions of the house price project report. The report indicates that no single factor is responsible for this but there have been a range of factors boosting demand for housing and a range of factors increasing the costs of supply of existing and new dwellings.

Phil Heatley: How exactly have the year-on-year rising mortgage interest rates—reaching today’s 10-year high—helped first-home buyers; and how has wasteful Government spending exacerbated these rising mortgage interest rates?

Hon MARYAN STREET: The increase in mortgage rates in recent times, clearly has not assisted, but the more significant problem has been the extraordinary spike in house prices over the last few years—that has been one of many issues.

Russell Fairbrother: What initiatives has the Labour-led Government developed to address the decline in housing affordability?

Hon MARYAN STREET: The Government is working on a comprehensive plan of action to help families into homeownership by boosting the supply of affordable houses. We are developing large-scale housing developments involving partnerships, reviewing public land holdings, developing the not-for-profit sector, introducing Welcome Home Loans and shared equity, re-evaluating regulatory costs, and a number of other measures that I will not take the time to describe right now.

Phil Heatley: Why should Kiwis expect to recapture aspirations of homeownership when they have been witness to a sad 8-year history and, going forward with her announcements, Labour’s 500 Hobsonville houses will not be built until late next year; there is still not a shared-equity scheme; councils and builders oppose her affordable-housing legislation as it will drive up rates and house costs; the public land list is in its infancy—

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. Supplementary questions are not a time to make a speech. They should be terse and to the point, and I ask you to stop that member or ask him to abbreviate the question he has before him.

Phil Heatley: Speaking to the point of order—

Madam SPEAKER: No, I understand the point of order. I need no assistance. There are some members in the House who do take the opportunity to make speeches, just as there are some Ministers who do the same when they answer them. So I would ask members to observe the rule and to keep their questions and answers succinct. Mr Heatley, please continue.

Phil Heatley: Well, I have listed four points, and I am continuing—and the last cursory Building Act proposals are still proposals with no details available?

Hon MARYAN STREET: The responses this Government has made to the question of housing affordability have been comprehensive. They will take time to put into place, and we look forward to putting them into place over the next few years. The fact that we are building houses, that we have plans for greenfield and brownfield sites, and that we have a whole suite of proposals and answers to what is a very complex question stands in marked contrast to the silence from the Opposition.

Phil Heatley: I raise a point of order, Madam Speaker. I could not hear, but did the Minister say that after 8 years they are still putting them in place?

Madam SPEAKER:Would the member please be seated.

Hon Pete Hodgson: I raise a point of order, Madam Speaker. There is a very good reason why that member could not hear and that is that he was shouting during the answer.

Madam SPEAKER: Yes, I was just about to make that observation. The member has only himself to blame if he cannot hear answers. I try not to intervene, so that we hear questions and answers in silence. So would the member please restrain himself. He has the privilege of asking the next supplementary question.

Phil Heatley: Why did not Labour in its 8-year watch get on to the housing supply-side issues that take such a long time to work through so we would not find ourselves in today’s situation, where actions, as noted in her own report, should have been taken in respect of “focusing on streamlining regulatory systems, especially around the Resource Management Act” and “increasing the amount of land available for housing”?

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. You suggested that the member abbreviate his questions. He then got up straight away and went off on a dissertation that was far too long for question time, particularly when it comes to a supplementary question.

Madam SPEAKER: I do note that, but I also note that Ministers are required to respond to only one question in a supplementary question and to do so succinctly.

Hon MARYAN STREET: The question of affordable housing has been brewing for some time. The Government has paid attention to first of all the supply of houses by replacing ones that have been lost previously through sale by the previous National Government. Beyond that, we have instigated a number of demand-side measures, such as KiwiSaver and the Welcome Home Loan scheme, which have assisted thousands into their homes.

Phil Heatley: Why should Kiwis expect anything different from the last 8-year record, especially when editors and councils are saying that Labour’s “too little, too late” election-year schemes “only offer minimal relief to potential buyers” and “We needrather more radical surgery than snipping away at the edges of red tape.”?

Hon MARYAN STREET: The fact is that a number of actions have been taken, research has been done, and answers are being provided to this complex question.

Phil Heatley: Why has it taken more than 8 years for Labour to start tinkering at the fringes, when Helen Clark claimed in the 1990s that the Labour Government would “ensure that low-income people and young couples can buy their own homes again, as we always have in the past”, and does not Labour’s 8-year record make a mockery of that promise?

Hon MARYAN STREET: I know that you want short answers, Madam Speaker, and the very short answer to the last part of the member’s question is no. But the first part of the answer is that this Labour-led Government has substantially augmented household incomes. I can give one example: through Welcome Home Loans we have 3,329 families in homes of their own, which we would not have had before.

Phil Heatley: I seek leave to table a document headed “Focus on streamlining regulatory systems, especially the RMA”, which is the Minister’s own report.

 Leave granted.

Phil Heatley: I seek leave to table a document headed Labour’s schemes “only offer minimal relief to potential buyers”.

 Leave granted.

Phil Heatley: I seek leave to table a document headed “We need rather more radical surgery than snipping away at the edges of red tape”.

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

Phil Heatley: I seek leave to table a document headed “Ten years of rising quarterly interest rates”.

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

8. Youth—Government Policies

[Uncorrected transcript—subject to correction and further editing.]

8. MOANA MACKEY (Labour) to the Minister of Youth Affairs: Has she received any reports on how young New Zealanders are benefiting from the policies taking effect from 1 April 2008?

Hon NANAIA MAHUTA (Minister of Youth Affairs) : Yes, there is great news for a lot of young people. I have seen a report that as at 29 February, 118,084 young people aged under 25 were enrolled in KiwiSaver. Over 75,000 were young workers between the ages of 18 and 24 years, many of whom will benefit from employer contributions to their accounts of about 1 percent. A savings culture amongst many young Kiwis will make a difference to their future. A Labour Government cares about that future.

Moana Mackey: What benefits do young people under the age of 18 receive from their enrolment in KiwiSaver?

Hon NANAIA MAHUTA: Members aged under 18 years are eligible to receive the $1,000 kick-start payment, and if they are employed they may receive voluntary employer contributions. The main benefits to young people joining KiwiSaver earlier come from joining the savings culture. The earlier we start saving, the greater security we have in the future. A number of parents, grandparents, aunts, and uncles are signing up children in their families, and teaching the value of savings to the young. These values will carry through as young people join the workforce and start their own contributions. In addition to this, young people aged under 19 are supported in many other ways by a Labour-led Government—indirectly through the Working for Families package, cheaper and free doctors’ visits, and cheaper prescriptions; the list goes on.

Phil Heatley: I raise a point of order, Madam Speaker. The member who protected the Government during my line of questioning by referring to long questions and answers was, I think, asleep when the Minister was giving her long answers. Could you please—

Madam SPEAKER: I understand the member’s point. Would he please be seated. Unfortunately, the member did not take the advice and his subsequent questions were quite long. However, I ask Ministers to please keep their answers short. If all members did that we would not have the disorder that is frequently created.

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. The insult from the member for Whangarei does him no service, or this Parliament for that matter. He knows full well that I was reading some foreign policy papers; I was not asleep, like he was in a car recently, as was reported in the Northern Advocate.

Madam SPEAKER: I am not sure that that was a point of order.

Hon NANAIA MAHUTA: I raise a point of order, Madam Speaker. I withdraw and apologise for the length of my answer and for caring about young New Zealanders. Thank you.

Madam SPEAKER: Thank you.

9. Tertiary Education Commission—Confidence

[Uncorrected transcript—subject to correction and further editing.]

9. Dr PAUL HUTCHISON (National—Port Waikato) to the Minister for Tertiary Education: Does he have confidence in the Tertiary Education Commission; if so, why?

Hon PETE HODGSON (Minister for Tertiary Education) : Yes; because the tertiary education commissioners are committed and hard-working.

Dr Paul Hutchison: If, as the annual report states, 2006-07 was the “busiest year in TEC’s history”, why was the Tertiary Education Commission so busy, and managed so poorly, that the commission’s staff turnover that year was a massive 25.5 percent?

Hon PETE HODGSON: Because the Tertiary Education Commission was formed from various people out of the Ministry of Education and a whole lot of people from Skill New Zealand who were scattered all around the country. Quietly, initially, that was rationalised, and in the very busy year that the member speaks of it was rationalised quickly. That is why.

Su’a William Sio: Has the Minister seen any advice on whether small polytechnics should be taken over by big ones?

Hon PETE HODGSON: Yes, I have. Less than a month ago, National’s spokesperson Dr Paul Hutchison said that failing regional polytechnics should be taken over by more successful ones. He has managed to contradict himself since—most recently yesterday, when he said that one regional polytechnic should receive more funding. This Government sees our network of polytechnic provision as very important, and we will continue to strive for improvements in polytechnics’ sustainability and in their responsiveness to the skills needs of their stakeholders.

Dr Paul Hutchison: Can the Minister confirm that during the last 18 months of what has been described as one of the biggest tertiary education reforms ever, there has been a change in the chair of the Tertiary Education Commission and two changes of Minister, and there is about to be a change of chief executive officer; is that not abysmal succession planning?

Hon PETE HODGSON: I thank the member for his attention to the detail of the portfolio, but the fact of the matter is that all of these transitions have been quite seamless. If the member would like, I could go through the changes in the National Party leadership of recent years.

Dr Paul Hutchison: Can the Minister name any successful business that underwent a major reform during which its staff turnover was 25.5 percent, the chair changed, and the departure of the chief executive was timed so that she was not around to take any responsibility for the changes she had made—any example?

Hon PETE HODGSON: Fonterra and Telecom would do for starters. The point is that the Tertiary Education Commission has undoubtedly been through a very busy period, it continues to be in a busy period, and the transition is going quite well.

Dr Paul Hutchison: Why did the Tertiary Education Commission have such a blowout in its personnel spending that it was forecast to spend $26.5 million but actually spent $34.5 million—nearly $10 million more of taxpayers’ money than had been budgeted?

Hon PETE HODGSON: I am afraid that I cannot give the member a detailed, accurate answer to that question. But I will say that the capital reserves of the Tertiary Education Commission were run down over that time on purpose. I will also say that the commission is now close to where it needs to be.

Dr Paul Hutchison: What sort of mess is the Tertiary Education Commission in, when the select committee warned the commission in the 2005-06 year that it was worried about the large amount of money being spent on contractors, and when, despite that warning and despite the commission itself having hundreds of staff, it spent 350 percent more money on contractors and consultants last year than it had budgeted for?

Hon PETE HODGSON: The member does not get it. I will be brief. The long and the short of it is that when the Tertiary Education Commission was set up, it was not fit for today’s purpose. Therefore, an awful lot of bureaucrats had to lose their jobs.

Hon Member: What?

Hon PETE HODGSON: A whole lot of bureaucrats had to lose their jobs, and other, differently skilled, bureaucrats were taken on, and in the meantime a bit of contracting out occurred. That is roughly the story.

Dr Paul Hutchison: I seek leave to table the Tertiary Education Commission’s annual report, which shows a blowout of 350 percent in expenses.

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

Dr Paul Hutchison: I seek leave to table the New Zealand Education Review article entitled “TEC 25 percent staff turnover”.

 Leave granted.

10. Accident Compensation Scheme—Reports

[Uncorrected transcript—subject to correction and further editing.]

10. Hon MARK GOSCHE (Labour—Maungakiekie) to the Minister for ACC: Has she received any reports regarding the delivery of the ACC scheme?

Hon MARYAN STREET (Minister for ACC) : Yes, I have. An independent review by PricewaterhouseCoopers said that the Accident Compensation Corporation, under its current Government monopoly structure, is performing as well as or better than privatised alternatives, and is cheaper for employers. It described the scheme as representing international best practice.

Hon Mark Gosche: Did the report make any recommendations about privatising the Accident Compensation Corporation or making structural changes to the accident compensation scheme?

Hon MARYAN STREET: Yes, it did. The report said international comparative studies had “failed to establish any evidence which would suggest specific changes to ACC’s structural implementation.” However, the National Party stated yesterday that the review “tells us nothing we don’t already know.” So I wonder whether it is finally admitting that it knew all along that Labour’s monopoly delivery of accident compensation is the best way to do it.

Hon Mark Gosche: Did the report make any recommendations about privatising the corporation’s employers’ account?

Hon MARYAN STREET: Yes. In regard to the employers’ account, which National briefly privatised, the report states: “these observations lead us to form a moderately strong view that a government monopoly is the best observable mechanism for implementing the ACC employers account.” In the face of this mounting evidence, how can National members claim that the report has taught them nothing new?

Pansy Wong: Why is the Minister happy for the Accident Compensation Corporation, which is a monopoly organisation, to spend $1 million on that report, which states the corporation should remain a 24-hour, no-fault insurance scheme—something no one has proposed changing—and is this nothing more than the corporation conducting Government propaganda in an election year?

Hon MARYAN STREET: Thank you for that. I am delighted to hear from the National Opposition that there is to be no change to accident compensation. I welcome that revelation. In answer to another part of the question, I did not commission this report.

Peter Brown: Will the Minister confirm that she was satisfied with the New Zealand First - initiated physiotherapy review, which was conducted and reported on last year; if so, can she advise the House how the Accident Compensation Corporation is responding to the non-financial recommendations, and can she further advise whether the Minister of Finance will address the—[Interruption] Settle down, fellows. Calm down; take a pill!

Madam SPEAKER: The member has asked three supplementary questions in one.

Hon MARYAN STREET: I would love to answer them all, but I take your injunction on board, Madam Speaker. The Government welcomed the approach from New Zealand First concerning the physiotherapy review, and I report to the House that the non-financial recommendations are already being worked through in partnership with the physiotherapists and the Accident Compensation Corporation.

11. Māori Trustee—Funds Transfer

[Uncorrected transcript—subject to correction and further editing.]

11. Hon TAU HENARE (National) to the Minister of Māori Affairs: Does the Māori Trustee and Māori Development Amendment Bill include provisions for appropriating $35 million from the Māori Trustee?

Hon PAREKURA HOROMIA (Minister of Māori Affairs) :Clause 15 of the Māori Trustee and Māori Development Amendment Bill provides for the transfer of $35 million from the general purposes fund as a contribution to the Māori Business Aotearoa New Zealand fund.

Hon Tau Henare: Why then did Te PuniKōkiri have to grant the Māori Trustee $360,000 from its Māori potential fund last financial year?

Hon PAREKURA HOROMIA: The Māori Trustee is an organisation in its own right that can contribute to the future development of Māori. That is why there is a contract with the Māori Trustee, as there is with nearly 400 other organisations.

Hon Tau Henare: I raise a point of order, Madam Speaker. My question asked why Te Puni Kōkiri had to grant the Māori Trustee $360,000 from its Māori potential fund, but that answer not only had nothing to do with the question but did not even address the question. I would like it that the same rules that apply to me—[Interruption]

Madam SPEAKER: Please be seated. I understand the member’s point. I actually think the Minister addressed the question. It might not have been clear, but he did address it.

Hon Tau Henare: I raise a point of order, Madam Speaker. I would really like it if the same rules that apply to myself when I interject on a point of order apply to the Rt Hon Winston Peters, as well.

Madam SPEAKER: I agree. The same rules are that you get a warning; another interjection and you are out.

Hon Tau Henare: Does the Minister agree with the following reason for the granting of $360,000 to the Māori Trustee by Te Puni Kōkiri: “to assist the Māori Trustee to develop the critical mass of people and resources, information and relationships that will lead to long-term economic sustainability and globally competitive agribusiness, leveraging off Māori land.”; if so, what does it mean?

Hon PAREKURA HOROMIA: It means, quite simply, that Māori are at the front edge of competing on the global stage in relation to exports. Māori are the biggest single exporters of meat. They are the biggest single-cluster owner in Fonterra. They are heading towards being the biggest single owner of fish in the South Pacific. Therefore, we need some convergence. The Māori Trustee is an appropriate place to ensure that that force is brought together.

Dave Hereora: What will be the benefits of setting up the Māori Business Aotearoa New Zealand fund?

Hon PAREKURA HOROMIA: The Māori Business Aotearoa New Zealand fund will present a significant opportunity to accelerate Māori development by pooling existing resources that are available for this purpose. The Māori Trustee, as chairperson of Māori Business Aotearoa New Zealand, will oversee this development fund and will have the benefit of the skills of a board to govern this larger fund. As an independent statutory corporation, the Māori Business Aotearoa New Zealand board will be able to work directly and independently with Māori to progress their economic future.

Dr Pita Sharples: Tēnātātou katoa. Is the Minister aware that the total surplus funds paid back by Te PuniKōkiri to the consolidated fund between 1999 and 2007 were $6.336 million, and would it not have been better to have invested these surplus funds in the setting up of Māori Business Aotearoa New Zealand, instead of appropriating the $35 million from the Māori Trustee beneficiaries?

Hon PAREKURA HOROMIA: I am not too certain on the detail of that exact figure, and I would certainly need to look into it. But Te PuniKōkiri, along with the Māori Trustee, is ensuring that that development is progressing well.

Hon Tau Henare: Why did the Minister approve the $360,000 grant to the Māori Trustee, when it is obvious that the Māori Trustee does not need an extra $360,000—it already has at least $35 million in the general purposes fund, which the Government wants to purloin?

Hon PAREKURA HOROMIA: Unless things have changed since that member was the Minister of Māori Affairs, when he did nothing, it is a contract between the ministry and the Māori Trustee, not the Minister, and it is sanctioned by the senior team—the executive team.

Hon Tau Henare: I raise a point of order, Madam Speaker. My question was about the grant that Te PuniKōkiri made—[Interruption] That is the second time.

Madam SPEAKER: Well, you could ask the Minister to leave the Chamber, if you wish.

Hon Tau Henare: Do I still get to ask the question?

Madam SPEAKER: Well, that is the question, really, is it not? The member wants a specific answer to his question. As members know, one cannot require that. All Ministers have to do is address the question. We all see reality differently, obviously. Therefore, sometimes it is not surprising that there is not an understanding between the question and the answer.

Hon Tau Henare: I raise a point of order, Madam Speaker. I think I will ask you to have the Minister removed because of that, and then I will ask you to have somebody else, in his stead, answer the question.

Madam SPEAKER: Well, you can. Would the Minister please leave the Chamber.

 Hon Parekura Horomia withdrew from the Chamber.

Rt Hon Winston Peters: Is the real problem with this issue in respect of Māori development a lack of funds, which is historically best assessed or judged by the fact that when yours truly was the Minister of Māori Affairs the funding was $239 million, and under the Richardson regime and the National Government, all by itself, it became $32 million, and as a consequence the department has struggled ever since?

Hon Dr MICHAEL CULLEN: On behalf of the Minister of Māori Affairs, yes, indeed, funding was drastically cut for the ministry during the 1990s, and it was restored under this Labour-led Government.

Hon Tau Henare: Was it not a fact that a former Minister of Māori Affairs, the Hon Koro Wētere, went through the Māori Affairs budget with a huge knife and cut it from the $200-odd million that the Rt Hon Winston Peters talks about to at least half of that, in terms of the establishment of the Iwi Transition Authority?

Madam SPEAKER: That is straying a little from the initial question.

Hon Dr MICHAEL CULLEN: This is like one of those bad Monty Pythonsequences—

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. With respect to Mr Henare, he should do a bit of work and know a bit of the history. The Iwi Transition Authority was set up in 1988, which is a full 3 years before the budget that I am talking about.

Hon Dr MICHAEL CULLEN: As I was saying, this is becoming a bit like Monty Python. One can go back even further. The Hon Koro Wētere saw a massive expansion in the budget that he controlled from 1984 onwards. He then launched a change to the whole structure, and funding was split between the department and the Iwi Transition Authority.

Hon Tau Henare: What advice has the Minister received about the 1991 Charters, Sykes, and Nīkora review of the Māori Trustee and about the need to pay compensation to the Māori Trustee if certain moneys are taken from the trustee’s general purposes fund?

Hon Dr MICHAEL CULLEN: I do not have the information in front of me to be able to answer that question, so if the member cares to put it down in writing I am sure he will get a more complete answer. What I can tell the member is that the proposal is to create a substantial fund for investment in Māori development purposes. None of that money is coming from the funds that are specifically earmarked for the beneficiaries.

12. Lotteries Commission—Online Lotto

[Uncorrected transcript—subject to correction and further editing.]

12. SUE BRADFORD (Green) to the Minister of Internal Affairs: Why is he allowing the New Zealand Lotteries Commission to introduce online gaming for Lotto products, as announced last Friday?

Hon RICK BARKER (Minister of Internal Affairs) : In 2003, when Parliament passed the Gambling Act, it decided to retain the ability for the New Zealand Racing Board and the New Zealand Lotteries Commission to provide online services. The intention of this exemption is to provide New Zealanders with a safer alternative to online gaming-machine systems offered by overseas Internet-based gaming operators. Any benefits from Internet gambling would also, therefore, remain in New Zealand. Parliament made it clear in 2003 that the commission would be required to ensure that any risks of problem gambling and under-age gambling were minimised. Before I agreed to allow the commission to progress this proposal further, it had to satisfy me that appropriate safeguards would be in place in order for it to meet its responsibilities.

Madam SPEAKER: This is a long answer, Minister.

Sue Bradford: Why did the Minister and his officials not consult the expert advisory group on gambling, or, as far as I know, engage in any other form of community consultation as they are supposed to, before making the decision to introduce a new and highly addictive form of gambling at a time when he is conspicuously failing to control existing illegal online gambling in New Zealand?

Hon RICK BARKER: There is no substance behind saying that Lotto is highly addictive; there is evidence to say that it is a relatively safe form of gambling. The second point I would make is that online gambling actually has more safeguards in it than gambling in the current regime, where people can walk into any Lotto shop as many times as they like and spend as much as they like.

Darien Fenton: Further to the Minister’s last answer, what safeguards will the New Zealand Lotteries Commission put in place on the sale of online Lotto, and how does that compare with the current method of purchasing Lotto tickets?

Hon RICK BARKER: For online Lotto, players will be able to register only one account. They will be able to set their own spending limits and, in advance, will be able to self-exclude. There will be a weekly spending limit of $150, with no more than $300 spent in any month. Players who consistently spend to the maximum will be required by the commission to make contact with it, for it to offer advice and support. Currently there are no requirements for a Lotto player to buy from one shop, there are no spending limits, and the retailer does not know who the person is. The retailer does not have any ability to monitor players’ spending or collect information about Lotto-playing people. There are many more safeguards in this proposal.

Madam SPEAKER: That is a long answer.

Sue Bradford: Why does the Minister think that limiting someone’s weekly spend to $150 is actually helpful, given that many people cannot afford to lose that amount of money, especially as beneficiaries have the highest reported rate of expenditure on gambling, according to the Department of Internal Affairs itself?

Hon RICK BARKER: Online Lotto is limited to $300 a month or $150 a week; for Lotto in a shop there is no limit whatsoever. Lotto online requires people to interact with Lotto only once a week, whereas with the current arrangement people can go to as many shops as often as they like and spend as much as they like.

Sue Bradford: Can the Minister guarantee that the Lotteries Commission will not in the future extend its use of online gaming from Lotto, Powerball, Keno, Strike, and so on, to even more addictive products like the instant games, which are incredibly addictive?

Hon RICK BARKER: The only proposal in front of me was the proposal for online Lotto and other lotteries products. I know that Lotto does have an interest in looking further at the matter, but if it does wish to proceed with those proposals, it will have to go through much, much tougher scrutiny, and will have to assure me or the subsequent Minister of Internal Affairs that the risks of harm for those people are absolutely minimised.

Sue Bradford: How does the Minister justify introducing a product that can be paid for only by credit card, when such cards attract interest in this country at the moment of up to 24.9 percent; and why on earth is a Labour Government promoting gambling on credit anyway, especially when low-income people are among the most vulnerable to this form of addiction?

Hon RICK BARKER: The problem with transferring money currently is that under most banking proposals money takes days to go through the various accounts. With a credit card, transfer is instantaneous. Or people can get themselves a debit card, which is the same thing but in a positive balance. I have advised the commissioner of the requirement that when the banking system changes, the commission will change with it and will require people to buy positively rather than negatively through credit cards. I accept the member’s point, but this was the only way the innovation could be financed.

Judy Turner: Is the Minister planning to act decisively if results from the investigation currently being run by his ministry into the allocation of pokie funds to the racing industry instead of to charitable outcomes are conclusive, in regard to what appears to be shoddy practice; if so—if he is going to act—what options is he prepared to consider to fix this outrageous situation?

Hon RICK BARKER: When Parliament changed the legislation in 2003, it enabled money from this source to be transferred to the racing industry for stake money. I have made it clear to the sector that when the legislation was passed, Parliament used the word “community”, and assisting the community was seen to include allocating funds to address a broad base of issues, not a single one. If people continue to persist in allocating money for one cause, which the community does not see as representative of the community, then I am sure Parliament will react.


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