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Questions And Answers – Tuesday, 13 May 2008

Questions And Answers – Tuesday, 13 May 2008

1. Income Tax—Fiscal Drag

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

1. RODNEY HIDE (Leader—ACT) to the Minister of Finance: What is the total extra income tax revenue he has collected because of fiscal drag since becoming Minister of Finance?

Hon Dr MICHAEL CULLEN (Minister of Finance) : According to Inland Revenue Department estimates, $1.49 billion in total from 2000 to 2006, which represents 0.5 percent of tax receipts over that period. For the year 2006-07, the estimate is a further $250 million on top of that.

Rodney Hide: Does the Minister of Finance accept that if he allowed for the effect of inflation on bracket creep, he would have to givepeople on the average wage an extra $35 a week just to take them back to where they were before he became Minister of Finance?

Hon Dr MICHAEL CULLEN: Based on Inland Revenue Department advice, definitely not.

Charles Chauvel: What is the total amount by which taxes have been cut in recent Budgets?

Hon Dr MICHAEL CULLEN: Recent Budgets have delivered over $4.6 billion a year in tax cuts to families, business, and savers. I note again that the National Party voted against all those tax cuts, and I expect it will vote against further tax cuts next week.

Ron Mark: I raise a point of order, Madam Speaker. I am not sure whether you are aware from there, but the speakers down this end are very, very low and we cannot hear. We hear with difficulty at the best of times, but I ask whether something could be done about the speakers.

Madam SPEAKER: As I said, I have asked those who are responsible for the sound system to look at it, but in the meantime we just may have to be a little quieter in order to hear each other.

Rodney Hide: What does the Minister believe, then, that a person on the average wage without children would have to have as a tax cut in order to compensate for the extra tax he or she has paid as a consequence of bracket creep?

Hon Dr MICHAEL CULLEN: Real post-tax net income in New Zealand has risen over the last 6 or 7 years. The member will have to wait until Thursday next week, and I look forward to his voting for tax cuts next Thursday afternoon. I think that the ACT party probably has a more principled position on these matters than the National Party.

John Key: Which set of journalists is the Government being honest with: the ones it is spinning to that tax cuts will not start till 1 April, or the ones it is spinning to that actually tax cuts will start on 1 October—or is the correct answer “none”, in the same way that it was not honest with any of them about what Toll Holdings cost to buy?

Hon Dr MICHAEL CULLEN: From a man who once pretended to be a great international financial market speculator, that shows he does not know that companies carry debt.

Charles Chauvel: Is the introduction of a tax-free threshold the most effective way of delivering tax relief to those on low and modest incomes?

Hon Dr MICHAEL CULLEN: I previously thought it would be, and, indeed, advice was developed along those lines to Cabinet. But officials are making it clear that up to 90 percent of people on incomes below $18,000 per annum are to be characterised as being on temporary low taxable income or on benefits or superannuation for which the tax rate at that level is not a particularly important factor. There is an excellent discussion of this matter in a book called Unfinished Business by, apparently, the late Sir Roger Douglas, given that somebody pretending to bear his name has put out a completely different policy this afternoon.

Gordon Copeland: Does the Minister accept that if he had adjusted the tax bracket thresholds for inflation between 1 April 2000 and 1 April 2008, as I have been advocating for some years now, he would be leaving in excess of $1 billion in the purses and pockets of Kiwi taxpayers in this fiscal year, compared with the present position?

Hon Dr MICHAEL CULLEN: I think from the figures I gave previously the number would be somewhere around $1.8 billion, which clearly does not translate into a tax cut of $38 a week unless one structures that in quite an unusual fashion.

/NR/rdonlyres/98865779-D8F4-4CB7-8166-B56076F2C6DE/83262/48HansQ_20080513_00000010_.pdfFull transcript of Questions for Oral Answer for Tuesday, 13 May 2008 [PDF 173k]

2. Finance, Minister—Confidence

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

2. JOHN KEY (Leader of the Opposition) to the Prime Minister: Does she have confidence in the Minister of Finance; if so, why?

Hon Dr MICHAEL CULLEN (Acting Prime Minister) : Yes; because he is a hard-working and conscientious Minister.

John Key: How can she have confidence in a Minister who first promised, then cancelled, personal income tax cuts in 2005, saying that they were “only small” and were “not worth having”, when he is doing it all again—promising personal income tax cuts that are small and probably not worth having, and, no doubt, plotting to cancel them soon after the election?

Hon Dr MICHAEL CULLEN: The Minister of Finance is promising sensible, sustainable, and realistic tax cuts. I look forward to the Leader of the Opposition doing the ultimate flip-flop and voting for a policy he supports—tax cuts.

Sue Moroney: Does the ability of the Minister of Finance to express a view on issues such as the purchase of assets that is consistent with Government policy contribute to the Prime Minister’s confidence in him?

Hon Dr MICHAEL CULLEN: Yes. As a leader, it is important to know that one’s deputy is not contradicting one publicly—and, indeed, vice versa. The Prime Minister certainly would not like to be in the position of the Leader of the Opposition, who constantly has to overrule his finance spokesperson.

John Key: If the Prime Minister said that her Minister of Finance’s tax cuts will be, to quote him a few seconds ago, “sustainable”, is that a bit like the rest of the Government’s sustainable promises—huge promises, delayed for 2 years, soon to be cancelled, and the only thing they get to take home with them is a 7-series BMW?

Hon Dr MICHAEL CULLEN: It is a bit rich for Mr Key to attack BMWs; he carries one in the boot of his own car!

John Key: If the Prime Minister’s Minister of Finance promised tax cuts in 2005 but cancelled them in 2007 because they were unaffordable, although they would have cost under $500 million, why is her Minister of Finance promising tax cuts next week costing well in excess of $2 billion?

Hon Dr MICHAEL CULLEN: The member can make up whatever figure he likes at this particular time, but I can tell him that the tax cuts will be legislated for. He will have the chance to put his mouth where his money is—or vice versa, as the case may be, in his example. I look forward to his once again voting against tax cuts, just as he has voted against every tax cut under this Government.

John Key: If the driving force behind the Government’s tax cuts is not that it is election year and Labour is 15 points behind in the polls, could the Prime Minister explain why her Government did not cut taxes when surpluses were large, inflation was low, and it was capable of doing it, but now seems hell-bent on cutting taxes when surpluses are reducing and inflation is, at least, above the Reserve Bank target?

Hon Dr MICHAEL CULLEN: Clearly, now the Leader of the Opposition is arguing we should not have tax cuts because the surplus is coming down and inflation is relatively high; he is about to build up the argument as to why there should be no tax cuts. Whatever position the Government takes, he takes the opposite position, except that 6 months later he says “That actually was my position all the way along.”

John Key: Does the Prime Minister remember her Minister of Finance, in 2005 on the campaign trail, going what can be described only as troppo because the National Party had promised $2 billion worth of personal tax cuts at a time when the surplus was large and inflation was relatively low, yet in a week’s time he is about to promise tax cuts that are even larger than that?

Hon Dr MICHAEL CULLEN: We have made it clear for something like a year now that there will be tax cuts in the 2008 Budget. They will be sustainable. They will have some implications for ongoing Government spending. I look forward to the National Party voting for those tax cuts, and winding back on the very large spending promises that it has already made.

John Key: Can the Prime Minister confirm for New Zealand taxpayers today that their tax cut next week, under her Government, will at least be more than $30 per week, given that they are facing interest rates having doubled under Labour, fuel prices having gone through the roof, the cost of filling up their supermarket trolley having gone through the roof, and every other cost having gone up; or is the No. 1 priority of her Government to get more bureaucrats for the Ministry of Foreign Affairs of Trade and buying a train set for hundreds of millions dollars more than it is worth?

Hon Dr MICHAEL CULLEN: We will take the last point. This man dismisses the desire of the great majority of New Zealanders for an effective rail system by calling it “buying a train set”. I think the member should get with the message: people want an effective rail system in this country, they want a decent health system, and they want a decent education system. That member is promising to spend billions of dollars to subsidise Telecom!

/NR/rdonlyres/ADD6E351-5F87-453D-AE1F-AC032866E09D/83264/48HansQ_20080513_00000076_.pdfFull transcript of Questions for Oral Answer for Tuesday, 13 May 2008 [PDF 173k]

3. Working for Families—Number of Families Benefiting

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

3. RUSSELL FAIRBROTHER (Labour) to the Minister for Social Development and Employment: What reports has she received regarding the number of families benefiting from Working for Families?

Hon RUTH DYSON (Minister for Social Development and Employment) : The Prime Minister and I launched a new evaluation of Working for Families, which shows that 371,000 families received Working for Families tax credits in the last tax year. Working for Families was designed to significantly reduce poverty, and early results show that it is reaching families and is making a difference. Forty-six percent of those families were beneficiaries, and three-quarters of those families had incomes under $50,000. Our Government is committed to continuing to support New Zealand families and we will continue to identify ways to target support at those most in need.

Russell Fairbrother: What reports has she seen regarding the Government’s progress in reducing the number of families living in poverty?

Hon RUTH DYSON: I have seen, and welcome, a report from the Child Poverty Action Group, which indicates that child poverty in New Zealand is the result of policies implemented by the National Government in the 1990s. The report identifies areas of progress made by this Government, including “substantial reductions in poverty as a result of the Working for Families package”. It also identifies areas where there is still work to do to eliminate child poverty, and our Government is firmly committed to continuing that work. I have seen a number of responses that welcome the focus on child poverty, but there has been a noticeable silence from the National Party—perhaps because it wants to hide its current policy that would freeze benefit rates and refuse emergency support to those in need.

Judith Collins: How can this Minister be so out of touch with ordinary Kiwis that she can give those sorts of answers, when 80,000 children go to school hungry every single day—and whatever happened to the Agenda for Children and the 2002 pledge to end child poverty?

Hon RUTH DYSON: I am delighted to continue to report to the House on the reduction in the number of children, in New Zealand families, who are living in poverty. That number is estimated to be 130,000 fewer children than when that member’s party was leading the Government.

Sue Bradford: Why does the Government continue to think that Working for Families is working for beneficiary families, when a Ministry of Social Development report, released last weekend, shows that the value of the benefit is even lower now than after the benefit cuts of 1991, and when Working for Families itself continues to offer less support to beneficiaries than it does to those in paid work?

Hon RUTH DYSON: As identified in the answer to the primary question, 46 percent of families who benefited from the Working for Families package were actually families who were on primary benefits. The total package of Government support provided for our poorest families includes not only income support but also helps to reduce essential costs, such as costs of going to the doctor, collecting prescription items that families need if they have been prescribed medication, and also the costs of child care. The 20 free hours’ early childhood education actually adds $4,500 directly into the pockets of our lowest-income families.

Dr Pita Sharples: Tēnā koe, Madam Speaker. Tēnatātou katoa. How will the Government defend the case being brought by the Child Poverty Action Group to the Human Rights Review Tribunal next month; a case that challenges the Government’s Working for Families package and its discriminatory effects for the families with greatest needs—those families who have been excluded from the minimum family tax credit, and who have been denied the in-work tax credit and who are currently trapped in a non-caring cycle of poverty?

Hon RUTH DYSON: Because that matter is in a judicial process, I am not able to comment on it.

Sue Bradford: What, if anything, does the Government plan to do to assist beneficiary families and individuals who are trapped in poverty at levels of around 30 to 40 percent of the median equivalised disposable household income—way below the Government’s own poverty lines and as reported by the Ministry of Social Development itself this past weekend?

Hon RUTH DYSON: Our Government is certainly aware of the financial pressure that a number of families are facing at the moment and we will continue to focus our support on those who are in need.

Dr Pita Sharples: What comfort can the Minister give to the families of the 466 staff of the Oringi sheep and lamb processing facility near Dannevirke who not only will suffer the negative economic consequences of being laid off but will then face the additional humiliation of having the $60 a week in-work tax credit also taken off them; how would she suggest this additional penalty benefits families who were once working?

Hon RUTH DYSON: I appreciate the sentiments expressed by the member in his question and I know that most members of this House would feel a lot of empathy with those who have lost their job at Oringi as per the announcement at Dannevirke today. It is my understanding that many of those workers will be offered immediate support by both the Ministry of Social Development and the Department of Labour, and I hope they will not lose their in-work tax credit because they will be able to find jobs. Every support that this Government is able to give those workers to find work—as some of them already have, because it is the off season at the moment at Oringi—will be given.

/NR/rdonlyres/E9D7F8B4-4558-4C14-B25F-C0BFB6910379/83266/48HansQ_20080513_00000152_.pdfFull transcript of Questions for Oral Answer for Tuesday, 13 May 2008 [PDF 173k]

4. Toll NZ Rail and Ferry—Purchase Price

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

4. Hon BILL ENGLISH (Deputy Leader—National) to the Minister of Finance: What is the Government’s best estimate of the final purchase price for Toll New Zealand’s rail and ferry business?

Hon Dr MICHAEL CULLEN (Minister of Finance) : It is $665 million.

Hon Bill English: Can the Minister tell the House and the public whether that figure includes the Government taking on somewhere around $100 million to $200 million of debt, Toll New Zealand having access to rent-free depot space in prime locations for 6 years, and, as rumoured, a special discount for Toll New Zealand’s own freight?

Hon Dr MICHAEL CULLEN: On the first point, clearly, the company carries some debt. It also has a finance lease over the Arahura. The price being paid is slightly above the per share price with which Toll New Zealand bought out the minority shareholders, so a premium was paid to obtain control. That share price, of course, reflected also the existence of debt and the Arahura finance lease. On the other matters, the member is free to invent what he likes for the next few weeks; the full details will be released when the final deal is completed, and I think members will discover that a lot of what has been said in the public area is greatly exaggerated.

Hon Mark Gosche: Has he received any reports on support for the purchase of New Zealand’s rail asset?

Hon Dr MICHAEL CULLEN: Yes. I received a report last week from a Mr John Key stating that he had supported the Government’s purchase of the rail track in 2004. However, at the time he said that he opposed it vehemently, saying it would lead to pork barrel politics. So I am sure the report that National is opposed to Toll New Zealand’s rail and ferry assets being bought by the Government will be followed by an expression of support—indeed, by his claiming sooner or later that the National Party was responsible for it.

Hon Bill English: Can the Minister confirm that the reason he has not told the public the full price of the Toll New Zealand purchase is that although taxpayers are hurting, he has committed well over $1 billion to investment in Toll New Zealand—to expenditure of taxpayers’ money for purely political reasons?

Hon Dr MICHAEL CULLEN: I thought it was supposed to be for nostalgia reasons, according to Mr Key, who dismissed rail as a completely out-of-date mode of transport. I note also that the Opposition has committed $1.5 billion to subsidise Telecom as a monopoly provider of fibre-optic cable to the home. The cost of the rail transaction is significantly less than that, and it will lead to profits—if there are any—being retained in New Zealand, it will not lead to continued demands from foreign ownership for increased subsidies, which is what New Zealand was facing under private ownership.

Hon Mark Gosche: Has he received any reports about New Zealanders supporting the Government’s buy-back of the rail system?

Hon Dr MICHAEL CULLEN: I continue to receive correspondence from people who support the buy-back of the rail system, and I have no doubt that the public understands why the rail system is so important for the future of the economy. The Leader of the Opposition, however, continues to accuse these people of suffering from nostalgia, and keeps making silly jokes about train sets.

Hon Bill English: The Minister having raised the matter of subsidies for overseas owners, why did he do a deal—including secret sweeteners—that meant that Australian shareholders benefited from an increase in the value of their shareholdings of a quarter of a billion dollars? As one Australian said, “You get only one Helen Clark moment in your lifetime.”?

Hon Dr MICHAEL CULLEN: I have many of them, almost every day, so that clearly is not true! The ridiculous thing about that statement is that Toll New Zealand was continuing to seek ever larger subsidies from the Government to operate a business from which it expected to make not a minimal rate of return but a very substantial rate of return, after having received Government subsidies. Mr Key claimed that we should have a national rail access agreement; we have had one for 4 years, and all we have had is endless arguments about what it means and enforcing it.

Hon Bill English: When will the Minister make public the Government’s best estimates of the new subsidies that will have to apply to the rail system, and its best estimate of the investment requirement that the taxpayer has now taken on, or did he buy this company on a whim because he thought he would get a political headline out of it?

Hon Dr MICHAEL CULLEN: Clearly, from the way the National Party’s members are going on in the House this afternoon, it has hurt the National Party that we have bought back the rail system,. But there is no secret agreement. We are in negotiations on the final details, and when they are concluded—and I assume they will be successful—we will release the full agreement, and, once again, most of Mr English’s many claims will be proven to be wrong.

Hon Bill English: Does the answer to that question mean that the Minister does not know the answer to the question I asked, which was when the public will reveal the full amount of the subsidy that it will have to apply to the company it now owns, and when he will reveal the full amount of the investment that he has committed on behalf of hard-up taxpayers, so that we can all know how much this reckless decision will cost taxpayers?

Hon Dr MICHAEL CULLEN: Let me first tell the member that taxpayers support this decision, by a very clear majority; I have to tell him that he is on the wrong side of the tracks on this one. Second, he did not hear what I said. I am certain that the public will not be revealing anything about this! The Government will be telling the public the full details of the agreement when the agreement is finalised. As to the future cost, does the member mean the next 5, 10, or 50 years of investment? One thing I am quite sure of is that the investment in the track, and in measures associated with the track, is actually far higher than the investment in rolling stock that is required over the next 5-year period.

Peter Brown: Does the Minister agree that with the purchase of the rail system and with a positive shipping plan, the Government would be in a position to make a comprehensive assessment of transport infrastructure in this country, incorporating road, rail, sea, and air transport; if he does agree, would he confirm that that is the best way forward, both economically and socially, for this country?

Hon Dr MICHAEL CULLEN: I agree with the member. The Minister of Transport will be making further announcements around sea freight issues within the near future. Clearly, Government ownership of the rail system, through statement of intent procedures, gives a much greater chance of better integration of road, rail, and sea transport modes.

/NR/rdonlyres/7D1EC7DA-3FA8-497F-B469-59AE71D602FC/83268/48HansQ_20080513_00000226_.pdfFull transcript of Questions for Oral Answer for Tuesday, 13 May 2008 [PDF 173k]

5. Emissions Trading Scheme—Costs to Households

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

5. Hon PETER DUNNE (Leader—United Future) to the Minister responsible for Climate Change Issues: What will be the additional costs to households of the introduction of the emissions trading scheme?

Hon DAVID PARKER (Minister responsible for Climate Change Issues) : The regulatory impact statement that accompanies the legislation notes that once all energy sectors are in the scheme in 2011, the impact on households is between $170 and $300 a year, or from 0.5 to 0.8 percent of total household expenditure. Of course, if the emissions trading scheme did not proceed, the total bill would be much higher, and would be incurred by New Zealanders via their taxes.

Hon Peter Dunne: Is it intended that New Zealand households will be compensated for those additional costs—if so, how will that occur; if it is not intended that that is the case, why not?

Hon DAVID PARKER: The intention is to have some compensation in respect of electricity, and that is one of the issues the Government wishes to talk about with support parties for the legislation.

Su’a William Sio: What has the Government done to ease the impact of already high oil prices on New Zealanders?

Hon DAVID PARKER: The Government is mindful of the rising costs of petrol and diesel, which are already having an effect on New Zealanders’ driving habits, and which have put pressure on inflation and therefore on interest rates also. For these reasons, the Government has proposed delaying the entry into the emissions trading system of the fuel sector from 2009 to 2011. Other measures to help New Zealanders to lower their costs and reduce emissions include fuel efficiency labelling at the point of sale and a 12-fold increase in funding for public transport.

Hon Dr Nick Smith: Does the Minister stand by his statement in December: “We do not have the luxury of time. If I or this Government mistakenly delay our response to climate change, that will be in the poor interests of New Zealand economically. It will leave our children a legacy of climate change. You know, the Government will have failed its duty.”?

Hon DAVID PARKER: Yes, I absolutely do. The fundamentals of the emissions trading scheme are that we need to create a cost for increases in emissions across the whole of the economy. The emissions trading scheme fundamentals lie unchanged. By the end of 2012 the whole of the economy faces a marginal cost for increases in emissions and is rewarded for decreases in emissions.

Jeanette Fitzsimons: Does the Minister think that New Zealand’s effort to mitigate climate change is fairly spread across the community, when a Sustainability Council report shows that 90 percent of the cost of the emissions trading scheme would be borne by those producing only a third of the emissions—mainly, households, small business, and foresters; and is the basic principle of emissions trading not meant to be that the polluter pays, rather than the general public paying?

Hon DAVID PARKER: Yes, I do think that the balance that is struck by the legislation is about right. It would serve no environmental purpose in terms of global emissions for New Zealand to drive this so hard that we caused energy-intensive businesses to shut in New Zealand and move to China.

Hon Peter Dunne: Is the Minister telling the House that the only areas in which New Zealanders can expect increased household costs are energy-related, with no consequential impact in any other areas; if so, is he prepared to make that a commitment to the people of New Zealand?

Hon DAVID PARKER: No, I did not say that.

Jeanette Fitzsimons: Is the Minister now regretting that the Government listened to United Future in 2005 and abandoned its proposal for a simple, fair, and transparent carbon charge—as first proposed by the Greens in 1993—that by now could be helping Kiwi families to reduce their energy and fuel bills in warmer homes, and to use more fuel-efficient cars and much better public transport?

Hon DAVID PARKER: The carbon tax would have been a good step at the time. We did not have the numbers for it, and it was also problematic in its design in that it had too many exemptions under the negotiated greenhouse gas agreements that lay under it. The emissions trading scheme now proposed is a better instrument.

/NR/rdonlyres/0E748570-5FC9-43B1-A820-221855EB38C1/83270/48HansQ_20080513_00000310_.pdfFull transcript of Questions for Oral Answer for Tuesday, 13 May 2008 [PDF 173k]

6. Methamphetamine—Availability

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

6. SIMON POWER (National—Rangitikei) to the Minister of Justice: Does she stand by her statement in a Cabinet paper from March 2008, that “Current efforts to reduce the availability of methamphetamine and prevent the diversion of pseudoephedrine into the manufacturing of methamphetamines do not appear to have had an impact on the price, purity or availability of methamphetamine.”; if not, why not?

Hon ANNETTE KING (Minister of Justice) : Yes; but I do not stand by the assertion in John Key’s speech at the weekend that I had conceded that the Government was losing the war on P. I can concede that National certainly was not losing the war against P in its last term in Government, because it had not even engaged in the battle. Nine clan-labs were busted in 2000, and around 200 were busted last year. I think that the facts speak for themselves.

Simon Power: Does the Minister agree with the Prime Minister’s claim yesterday regarding her admission that the Government is losing the war on P: “We are doing a significant revamp in police, ah, with the organised crime strategy. We have, ah, brought in stronger legislative measures.”; if so, why did she recommend that Cabinet reject or defer a whole range of so-called stronger legislative measures against gangs, including controls on precursor chemicals?

Hon ANNETTE KING: Because a whole range of tools is being given, and has been given, to the police in the battle against P and also against organised crime. So, in terms of what we are presenting, I look forward to the National Party supporting it.

Hon Jim Anderton: Can the Minister tell the House what positive actions the Government has taken over the last 5 years against the illegal manufacture and sale of methamphetamine?

Hon ANNETTE KING: First off, this Labour-Progressive Government has reclassified methamphetamine as a class A controlled drug, in 2003. This gave the police powers to search and seize without warrant, and the reclassification increased the maximum jail term for manufacturing or supplying methamphetamine from 14 years to life imprisonment. Further amendments to the Misuse of Drugs Act set out the presumption of supply for methamphetamine at 5 grams, and provided police and the Customs Service with enhanced powers to deal with methamphetamine and precursors. A further $55 million has been allocated to the police, the Customs Service, the Institute of Environmental Science and Research, and the community drug action programmes to tackle P labs and the import of drug components, and to support community measures, just to name some of the things that the Government has done.

Ron Mark: Has the Minister heard these comments of the president of the Police Association: “It doesn’t matter how many policies you put in place you’ve got to be prepared to resource them. Press releases are fine but what we’re going to be looking for is the resource to do actually something about it.”; and can she confirm that the 1,250 extra police officers recruited, along with the $500 million worth of funding boost, represents the largest single addition to police resourcing in this nation’s history?

Hon ANNETTE KING: I certainly can confirm that. I think that if we were to speak to the Police Association, we would hear it say that more has been done under this Government with the assistance of our confidence and supply partners than has ever been done before in this respect. In fact, I would remind this House that the previous National Government sought to cut the number of police officers by 500 before the 1999 election.

Simon Power: Does she stand by her statement in a Cabinet paper from March this year that “I consider that the establishment of controls over access to precursor chemicals used in the manufacture of methamphetamines is of critical importance to any efforts to combat organised crime within New Zealand.”; if so, why does she think the public can wait another year for her to take action on this?

Hon ANNETTE KING: Because quite a lot of work needs to be done in this respect. I need to say to the member that he may not know exactly what is in the making of methamphetamine. I have to say that I am quite a good cook myself, but I have certainly never made this sort of product. If the member were to look at what is involved in the production of methamphetamine, then he would find he would have to have control over some very ordinary products that people in this House buy every day of the week. It is not just a simple matter of having control over all the precursors; it is the way one works through that control.

Hon David Benson-Pope: Can the Minister tell the House what further reports she has received in relation to P?

Hon ANNETTE KING: I have received a number of reports, including reports of a speech made by Mr Key where he claimed a number of things that he would do, particularly about giving the police greater powers for surveillance. All I can say to the member is that he is supporting the Government’s position. In fact, if the member had looked at the speech I made to the Sensible Sentencing Trust, made on the same day that he made one, he would have seen the work—

Simon Power: Eight months after we suggested it.

Hon ANNETTE KING: No. He would have seen the search and surveillance work the Law Commission had done over 2 years and the Government’s commitment to legislation, which is being drafted right now. Those members can never think of their own policy. They have to pinch everybody else’s.

Ron Mark: Has the Minister heard the views expressed by the President of the Police Association yesterday, that the P scourge emanates from poor focusing of police resources during the 1990s—a time when Ministers like Tony Ryall, David Carter, Bill English, Maurice Williamson, Lockwood Smith, Nick Smith, and Murray McCully were slashing police numbers in favour of a white elephant called the INCIS computer—and is that not the legacy that we have all been trying to repair ever since?

Hon ANNETTE KING: The member has hit the nail on the head exactly, and that is why nobody believes those members when they say they are committed to getting rid of methamphetamine. National had 9 years in which to do something, and by 2000 the police did not have the resources to tackle this issue. I have just outlined some of the measures that have been taken under this Government with the assistance of our confidence and supply agreement partners. [Interruption] They do not like it, Madam Speaker. They do not like good news.

Hon Phil Goff: I raise a point of order, Madam Speaker. As you will notice, I am sitting right next to the Minister but I could not hear a word she was saying, over the barrage of noise from the other side. That is not good enough.

Madam SPEAKER: The member has a point. The level of intervention to prevent others from being heard is rising.

Simon Power: Can she confirm that the legislation she is proposing for controlling the precursor chemicals for P will include end-user declarations and mandatory reporting of suspicious transactions; and why does she think that these measures can wait another year, when One News last night showed that some retailers are selling ingredients in what seemed to be the apparent knowledge that they would be used to make P?

Hon ANNETTE KING: I looked at that programme last night and I have to say that I was appalled at the behaviour of that shop owner. Nobody in this House would support that behaviour. But I do have to say to the member that if an innocent member of the public who goes into a supermarket or a shop to buy methylated spirits or some other precursor to making methamphetamine has to sign some sort of a declaration, then I think that we will have a problem.

Simon Power: When will she introduce legislation to combat P and increase the penalty for participating in a gang and make it an aggravating factor in sentencing, when it was agreed by Cabinet on 9 July last year for it to be given high priority in the legislative programme; and what bills have been introduced since then that have been deemed more important in the fight against gangs and P?

Hon ANNETTE KING: There has been much legislation in this House against many issues, all important to New Zealanders. However, one of the bills the member is talking about is due for introduction now and the other, which is sitting on the Table of the House, gives additional powers to the organised and financial crime agency and I look forward to support from the National Party for it.

Simon Power: Can the Minister confirm that Labour’s policy at the last election regarding P was to make the deliberate use of illegal drugs while committing an offence an aggravating factor at sentencing, as well as offending in the presence of a child for those manufacturing P in the home; and can she also confirm that neither of those policies have been implemented?

Hon ANNETTE KING: The policies will be implemented and they will be introduced in legislation by this Government. The bill is ready for introduction and I look forward to support for it from National, because one of the things we know is that National votes against every measure we bring into this House in an attempt to streamline the justice system to help ensure better justice for people. All National members do is talk about it—no action; they talk about it.

/NR/rdonlyres/D106854C-C24B-4EB4-99CB-1C106A8CAEEA/83272/48HansQ_20080513_00000378_.pdfFull transcript of Questions for Oral Answer for Tuesday, 13 May 2008 [PDF 173k]

7. Emissions Trading Scheme—Proposal

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

7. MOANA MACKEY (Labour) to the Minister responsible for Climate Change Issues: Why is the Government proposing an emissions trading scheme to tackle polluting greenhouse gases?

Hon DAVID PARKER (Minister responsible for Climate Change Issues) : Because it will work. Climate change is real. The tragedy in Myanmar caused by tidal surges is a reminder of the kind of misery the world can expect to see more of, as the climate changes due to human activity. New Zealand signed and ratified the Kyoto Protocol to work with other countries to reduce greenhouse gas emissions. The emissions trading scheme we are proposing is an effective and fair way for New Zealand to meet our Kyoto commitments and reduce our emissions at least cost to businesses and households. It applies the same core principles as the European scheme and the proposed schemes in various states in the USA and Australia.

Moana Mackey: What does the Minister think of calls for New Zealand to delay the emissions trading scheme legislation in order to see what Australia does?

Hon DAVID PARKER: I have heard calls for New Zealand to wait for Australia to finalise its emissions trading scheme before we do anything on ours. In previous years, and from the same source, I have heard calls to follow Australia and renege on Kyoto commitments. Likewise, we have had calls to follow Australia into the disastrous Iraq war. The then Government in Australia got it wrong. This Labour-led Government got it right then and now. But once again we have people calling to say that we should let the Australians do our thinking for us and delay what we already know is good for New Zealand now.

Hon Dr Nick Smith: Why would New Zealanders who are concerned about greenhouse gas emissions and climate change trust this Government, when over the recess the latest figures on emissions revealed that yet again emissions grew by a record amount, and that far from emissions being 20 percent less by 2005—as Labour promised—New Zealand’s increase in emissions is the 38th worst of developed countries during the 9-year record of his Government?

Hon DAVID PARKER: I rise with pleasure to respond to the half-billion-dollar bungle by Dr Smith. In fact, what happened last week was that the estimated deficit for the first Kyoto period halved: it went down from a billion dollars to half a billion dollars. In fact, the emissions deficit during the first commitment period has more than halved. Not only is that the case, but for the first time in our history our transport emissions have levelled off. Our transport emissions have been going up through time essentially since the motorcar was invented. Under this Government for the first time, as a consequence of rising petrol prices as well as of what we are doing with public transport, rail, fuel economy information at point of sale, and other things to improve people’s state of being in New Zealand, transport emissions have levelled off. We have turned the corner.

Peter Brown: Noting those answers, does the Minister agree that in order to effectively address climate change globally it will take more than New Zealand introducing an emissions trading scheme and must involve countries such as China, India, the USA, and Brazil, and if he does agree with that will it come as a surprise to him to learn that on the recent Speaker’s tour the Prime Minister of the Czech Republic informed the delegation that at the recent Brussels conference on climate change only he emphatically made the point that maximum effort needs to be made to bring those countries on board, or otherwise all our efforts will amount to not very much; and can the Minister explain why New Zealand is not standing shoulder to shoulder with such an advocate?

Hon DAVID PARKER: I absolutely agree that all major emitters have to be part of the future action on climate change and that New Zealand cannot do it alone. None the less, it remains true that New Zealand is proportionately a far higher emitter than China, India, or any other developing country, and that it is important that we and other developed countries do what we have promised to do under Kyoto. The way we can do that at least cost is through an emissions trading scheme.

Hon Dr Nick Smith: In the course of the Minister’s answer he accused me of making a $500 million mistake. I seek the leave of the House to table, firstly, the Government’s own official papers that say the liability was $1,026 million, and, secondly, a statement from 2 days later that reduces that by $500 million.

 Leave granted.

/NR/rdonlyres/95BB186E-B5F3-4C83-AEA6-FBF9A7A6E093/83274/48HansQ_20080513_00000476_.pdfFull transcript of Questions for Oral Answer for Tuesday, 13 May 2008 [PDF 173k]

8. Immigration Service—Mary Anne Thompson

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

8. Dr the Hon LOCKWOOD SMITH (National—Rodney) to the Minister of Immigration: When was a Minister of Immigration first informed about allegations relating to Mary Anne Thompson’s involvement in assisting family members from Kiribati with immigration matters?

Hon Dr MICHAEL CULLEN (Leader of the House) on behalf of the Minister of Immigration: The Minister was advised that it was sometime in April 2007.

Dr the Hon Lockwood Smith: What action did the Minister of Immigration take at the time to address the serious allegations raised about the involvement of the head of the Immigration Service in securing immigration assistance for her family members?

Hon Dr MICHAEL CULLEN: My understanding is that the Minister was informed that an inquiry was about to be undertaken. It was not therefore a matter for the Minister to take action on; action was already under way.

Dr the Hon Lockwood Smith: What action, then, did the Minister take on receipt of the Oughton report in July last year—a report that clearly identified senior managers within the Immigration Service directing staff members to break Government policy?

Hon Dr MICHAEL CULLEN: The matters involved in that respect, of course, are employment matters within the Immigration Service and they are the responsibility of the chief executive, under section 33 of the State Sector Act.

Dr the Hon Lockwood Smith: Why was the Oughton report not publicly released upon its completion in July last year, and why was so much effort made to prevent the Oughton report becoming public, given the great difficultly experienced by Television New Zealand in securing the report under the Official Information Act?

Hon Dr MICHAEL CULLEN: The chief executive advised that theOughton report pertained to matters relating to individual employees. Therefore, of course, it is not a matter for Ministers to become involved with; it is a matter for the chief executive to make decisions on.

Dr the Hon Lockwood Smith: Does the secrecy surrounding the Oughton report from July last year until its grudging release in April this year demonstrate Government Ministers were complicit in an attempted cover-up of repeated breaches of immigration policy—I repeat, immigration policy—by departmental managers; if not, why not?

Hon Dr MICHAEL CULLEN: No; the matter related to individual employees and therefore is the responsibility of the chief executive. I note yet again the implication from the National Party that if in Government it will break the law and intervene in employment matters.

/NR/rdonlyres/E1894DB6-F2BE-47C4-A4A9-838A8DF087B6/83276/48HansQ_20080513_00000520_.pdfFull transcript of Questions for Oral Answer for Tuesday, 13 May 2008 [PDF 173k]

9. Bail Decisions—Police Involvement

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

9. RON MARK (NZ First) to the Minister of Police: Is she satisfied that police support for, or opposition to, bail conditions are given appropriate consideration in bail decisions made by the High Court?

Hon ANNETTE KING (Minister of Police) : As Minister of Police it is not appropriate for me to comment on decisions made by our independent judiciary. Police have the opportunity to put before the High Court their views on bail for particular individuals. The High Court judge in each case will consider the police views along with other relevant information.

Ron Mark: Can she confirm that police did oppose the relaxation of bail conditions for Tame Iti that allowed him to go dancing around the world; if so, why did they oppose it?

Hon ANNETTE KING: It is my understanding that the police did oppose bail for Tame Iti, but I am not able to give the reasons why they did that. It is their duty to put before the High Court judge their reasons regarding bail; it is up to the judge to decide on it.

Ron Mark: Is she satisfied that police would take account of genuine reasons for relaxing bail conditions, such as allowing travel to visit sick relatives, receiving medical treatment, or attending a tangi, and would she agree that it would be consistent with the public interest for police to oppose bail conditions that would allow a suspect to take part in a jaunt through Europe at the taxpayers’ expense?

Hon ANNETTE KING: I do not think it is appropriate for me to comment on an individual case, but I would like to say that it is not unnatural for the police to have one view on the merits or otherwise of a particular bail application, and for the judiciary—who have the responsibility to come to a decision—to come to a decision different from that of the police.

Ron Mark: Is she aware that the High Court’s decision to ignore police opposition to amending these bail conditions has been wholeheartedly endorsed by the Leader of the Opposition, and would she see his comments as a slap in the face for police?

Hon ANNETTE KING: No, I am not aware of that. I certainly think that all members of Parliament need to be incredibly careful in commenting on decisions made by the court. We do hold to the principle that we have the separation of powers in New Zealand, and the independence of the judiciary is an important independence, just as this Parliament holds to itself the right to make laws.

/NR/rdonlyres/422E4828-780B-4A6F-A970-85D1289130D5/83278/48HansQ_20080513_00000570_.pdfFull transcript of Questions for Oral Answer for Tuesday, 13 May 2008 [PDF 173k]

10. Unemployment—Reports

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

10. JUDITH COLLINS (National—Clevedon) to the Minister for Social Development and Employment: Does she stand by her statement in relation to the largest quarterly decline in employment in 19 years “Ah, well I, I don’t think that this is bad news at all actually.”; if so, why?

Hon RUTH DYSON (Minister for Social Development and Employment) : Yes, I do stand by my statement; because it would be very hard to describe an economy that has 350,000 more jobs, that has had an unemployment rate of under 4 percent for 15 straight quarters, that has the third-lowest unemployment rate ever recorded in the history of the household labour force survey, and that has 140,000 fewer people on benefits as being bad news.

Judith Collins: Will she now go to Dannevirke to tell—

Hon Dr Michael Cullen: Aw!

Judith Collins: —well, Mr Cullen might not find it very interesting—the 466 workers at PPCS Ltd who have lost their jobs today that she does not think that that is bad news, at all, that “things go up and down”, and that she does not “expect people to overreact”; is she going to go and tell them not to overreact?

Madam SPEAKER: It is impossible to hear, given that the sound system is not working properly. I will have to ask people to ask and answer questions in silence, unless members keep the noise level down.

Hon RUTH DYSON: I find it personally distasteful to have my words in relation to the New Zealand economy distorted to reflect the proposition that I find it pleasant that individuals are being made redundant. That is not true, at all. I feel very sorry for any person who is made redundant. Our Government ensures that both the Ministry of Social Development and the Department of Labour have staff on the spot on the day, to give those workers every support possible, and I remain committed to doing that.

Sue Moroney: What reports has she seen regarding the unemployment rate in New Zealand?

Hon RUTH DYSON: The current unemployment rate is 3.6 percent. That means that unemployment has remained below 4 percent for nearly 4 years. No other country in the OECD has achieved that record, including Australia, which has just announced that unemployment has increased to 4.2 percent. Our current unemployment rate is quite a significant contrast to the unemployment rate of 7.1 percent in 1999, when the member opposite’s party was in Government.

Dr Pita Sharples: Tēnā koe, Madam Speaker. Would the Minister say to Māori people that the fact that the unemployment rate of Māori has shot up from 7.3 percent in December to 8.6 percent, compared with 3 percent for Europeans, is not “bad news at all actually” and how high does unemployment amongst Māori have to climb before it becomes bad news?

Hon RUTH DYSON: Any unemployment is bad news for the individual, but the fact that unemployment—[Interruption]

Madam SPEAKER: We will have the answer in silence. I have warned members three times. Because of the problem with the sound system, it is impossible for me to hear.

Hon RUTH DYSON: The fact is that unemployment amongst Māori has halved in the last 8 years. This Government has overseen an economy in which over 1,000 jobs per week have been created—not just in one week but in every week of every year in which we have been in Government. We will continue our commitment to active labour market policies to ensure that every New Zealander who is able to work is supported into a job, but also to ensure that every person who is not able to work has the financial security to be able to live, which is exactly the opposite, from both perspectives, of that member’s party.

Judith Collins: Can the Minister explain why the experts think a fall of 29,000 in the number of employed people is an absolute shocker and very grim, but she does not think that it is “bad news at all”, and thinks that people are overreacting, or has she been too busy lately singing silly little songs to venture out into the real world?

Hon RUTH DYSON: I thought it was blindingly obvious to anyone who heard that song that neither a lot of time nor effort had not been put into either the preparation of it or the practice, frankly. The fact is that the household labour force survey for the previous quarter the female labour force participation rate went up to exactly the same extent that it then went down. It was not about job losses; it was about labour-market participation. The female labour participation rates are very volatile. The member made no positive comment about the increase in the previous quarter, and that is why the New Zealand public reflect that she has only a negative gene and never looks at any positive news.

Judith Collins: Can the Minister explain why she is so out of touch that she believes that there “haven’t been significant job losses to date in the construction industry”, when Westpac has reported that there has been a loss of 11,000 jobs in the construction industry in the past year; and has she told those builders who have lost their jobs that that is not significant?

Hon RUTH DYSON: The member is mis-speaking. She is not reporting my interview accurately, and I will challenge her on the specificity of that, as I always do, after question time. She has not been proven to be factually correct on a single occasion to date. I know that there is a decline in the construction industry, but I can also confirm that there are 350,000 more jobs in our economy than there were in 1999, and that the household labour force survey statistics to which the member is referring are about not the number of jobs but the number of people within the labour market, which is quite a different statistic.

Judith Collins: Why does the Minister not spend less time being slippery with the figures and more time thinking about how to help the people affected by the 11,000 job losses in the construction industry, the 6,000 job losses in the manufacturing industry, and the meatworkers who have lost their jobs today; does she agree that ordinary Kiwis expect her to spend a bit more time being focused on the future prospects of the people affected by these job losses, and a little less time indulging in singing silly songs; and is it not time that she stopped trying to cover up for the bad news, as well?

Hon RUTH DYSON: In stark contrast to the proposition in the member’s question, a number of people have contacted me following the said song being publicised and said “Don’t give up your day job.”, which is not what that member’s colleagues say about her.

Judith Collins: They have got a day job! Following the challenge by the Minister, I seek leave to table the transcript of the Minister’s interview on Radio New Zealand on 9 May 2008, in which she made those statements.

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

Judith Collins: I seek leave to table the Westpac bank’s report showing that 11,000 jobs have been shed from the construction industry.

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

Judith Collins: I seek leave to table a statement entitled “PPCS expect to slash jobs at Oringi”.

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

Judith Collins: I seek leave to table a report from Statistics New Zealand entitled “Employment declines”.

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

Judith Collins: I seek leave to table a Dominion Post article entitled “29,000” from the.

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

Judith Collins: I seek leave to table a Radio New Zealand Newswire article entitled “Gloomy Dyson”.

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

/NR/rdonlyres/AD83F3CF-2364-4718-A3FA-6117AEDA34D7/83280/48HansQ_20080513_00000612_.pdfFull transcript of Questions for Oral Answer for Tuesday, 13 May 2008 [PDF 173k]

11. Air Force—Helicopter Fleet

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

11. DARIEN FENTON (Labour) to the Minister of Defence: What progress has been made in modernising the Royal New Zealand Air Force’s helicopter fleet?

Hon PHIL GOFF (Minister of Defence) : There has been enormous progress. Last week, I signed a contract to purchase AgustaWestland A109 light utility and training helicopters to complement the Government’s earlier decision to purchase NH90 medium utility helicopters. The purchase moves our much-used helicopter fleet several generations forward—from technology that was employed in the Korean War and Viet Nam War—to the current century. It will give our air force state-of-the-art technology. This is a further example of the Labour-led Government’s rebuilding of the defence force, after a decade of neglect under the former National Government.

Darien Fenton: How do the capabilities of the AgustaWestland A109 compare with the current Sioux training helicopter?

Hon PHIL GOFF: There really is no comparison: one is a basic training aircraft that carries two people; the other is a 21st century aircraft. The AgustaWestland A109 is twin-engined and has an integrated digital cockpit, which is necessary for high-level training. It is equipped with ballistic protection to make sure our defence force personnel are well looked after. It has a secure communications system. It has automated auto-pilot and is configured for night flying. The other real advantage of this aircraft is that it is wheeled and therefore can be used on our naval fleet, which of course will expand by six further ships this year.

Darien Fenton: How versatile are the new helicopters compared with those they are replacing?

Hon PHIL GOFF: Rather than just being used for basic training, this aircraft can be used for a variety of purposes. Obviously it can be used for advanced training for the NH90s and the Seasprites—the Sioux certainly could not have been used for that. It can be used for counter-terrorism, search and rescue, deployment of forces, and disaster relief. This aircraft flies twice as fast for twice the distance, carrying three times as many people as the old Sioux, and it is capable of carrying under-slung loads of up to 500 kilograms. This is a great purchase. The Royal New Zealand Air Force is very grateful that it has a Government that looks after its equipment needs and does not leave obsolete equipment in place, like the National Government did for 9 years and for which it is still apologising.

/NR/rdonlyres/274F6C8A-A03D-4EC3-84B6-13ED37DAC3E3/83282/48HansQ_20080513_00000690_.pdfFull transcript of Questions for Oral Answer for Tuesday, 13 May 2008 [PDF 173k]

12. Election Advertising—Government Departments

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

12. Hon BILL ENGLISH (Deputy Leader—National) to the Minister of Justice: Is it Government policy that Government departments may not publish election advertisements; if so, why?

Hon ANNETTE KING (Minister of Justice) : It is not only Government policy but also the wish of Parliament, as set out in section 67 of the Electoral Finance Act 2007.

Hon Bill English: Does she agree with the statement made by Labour Party president Mike Williams that it is “a damn good idea” for the Labour Party to use Government department pamphlets for the purpose of electioneering; and if she does not agree, then why not?

Hon ANNETTE KING: No, I do not agree, and I think the Prime Minister has made it clear to Mr Williams that she does not agree, either. It is not a good idea, because Government departments are there to inform the public legitimately about what programmes are available for them. They are not there to electioneer on behalf of any political party.

Hon Bill English: Can she confirm that the Prime Minister described the person responsible for running Labour’s election campaign as “loose and confused”, and that those words also describe Labour’s strategy with the Electoral Finance Act—that is, to make everyone confused so they do not do anything, while Government departments run loose with public money?

Hon ANNETTE KING: I have no responsibility for what the Prime Minister says to the leader of the Labour Party, but I can say to the member that the only person who has tried to cause confusion is that member himself. He has put a lot of effort into it, and has done quite a good job. But let me say to him that there was nothing stopping the National Party, from 1 January, advertising—authorised as National Party advertising for the election campaign—so long as National was prepared to pay for it and follow the law. But National has put up a smokescreen because it wanted to spend $5 million worth in the run-up to the election saying: “We’re not election campaign advertising; this doesn’t count.”

Hon Bill English: Can the Minister tell the House whether it is Government policy that Government departments should use their websites to publish political statements made by Government Ministers during the regulated period—for instance, the Schools Plus website, and also the string of websites now operated by the Ministry for the Environment, which look a lot like the political advice given by political appointee, and now Labour candidate, Clare Curran?

Hon ANNETTE KING: Government departments putting up Government policy that is being implemented is, I believe, the role of Government departments. What they cannot do is to run an election campaign on behalf of the Government.

Hon Bill English: Has the Minister of Finance sought advice from her as to whether the Budget publicity planned by the Government, including pamphlets and mail-outs, comply with the Electoral Finance Act, given that this is the first Budget that has been given during the regulated period laid out in the Electoral Finance Act; and if he has not asked her advice, does she think he should have?

Hon ANNETTE KING: No, the Minister of Finance has not sought my advice, any more than that member has sought my advice on some of the things that his members are doing in their electorates now. I think the best thing to do, for every member, whether a Minister or a member of Parliament, is go to where he or she can get proper advice, and it is certainly not from me.

Hon Dr Michael Cullen: Is the Minister aware that Treasury has, in fact, sought Crown Law advice to ensure that all Budget documentation is compliant with the Electoral Finance Act?

Hon ANNETTE KING: Yes I am, and that is what I would call proper advice—not some sort of bush lawyer advice that we get from Bill English, which is usually distorted. That is what I mean about members of this House trying to tell other members how they ought to run their affairs. It is not the role of the Minister of Justice to tell other members and other parties what they should have in their election campaign advertisements.


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