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Questions And Answers - Wednesday, May 14 2008

Questions And Answers - Wednesday, May 14 2008

1. Innovation and Regional Economic Development—Government Action

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

1. SUE MORONEY (Labour) to the Minister for Economic Development: What action has the Government taken to support innovation and regional economic development?

Hon PETE HODGSON (Minister for Economic Development) : The Government has moved from the 1990s policy of treating innovation with disdain and ignoring it as something that only the market could provide, to a point where innovation is now a vital part of this country’s economic transformation. In recent weeks, for example, I have announced up to $4 million for the Enterprising Partnerships Fund to the Waikato Innovation Park in Hamilton, which is aimed at helping innovative business in agricultural technology, agricultural engineering, and the food-related sectors to become established and to grow in the Waikato, and similarly, up to $1.9 million for the Otago institute of design, aimed at establishing an applied design research centre to provide design services, research, and education to business in that region and across New Zealand.

Sue Moroney: How will the $4 million for the Waikato Innovation Park be used to help the Waikato and the nation?

Hon PETE HODGSON: Up to $2 million of it will be available to support the construction of a new purpose-built building for the park, and a further $2 million will be available for Innovation Waikato’s business development services. This funding will be matched by $2.4 million of cash contribution from the Hamilton City Council. It is an excellent example of how Government can work together in partnership with local communities, even though the National Party, by its interjections, clearly does not like it. I would like to thank the member for her ongoing support and good efforts in bringing this partnership to fruition.

R Doug Woolerton: Is the Minister concerned at the steady stream of manufacturers and processing plants closing their New Zealand operations, particularly in rural communities, and has he looked at the influence of our high interest rates and high dollar on these closures; if not, why not?

Hon PETE HODGSON: For the past 20 years or so the number of New Zealanders employed in manufacturing has vacillated between 250,000 and 300,000 jobs. It is currently at about 270,000, I think. That is a level of activity that, although lower than most economies, means that New Zealand has not been subjected to the hollowing out in commodity manufacture that has afflicted the various rust belts around other Western economies.

/NR/rdonlyres/722A369C-7ECA-46F4-879C-AB72EDFF4AE1/83376/48HansQ_20080514_00000062_2.pdfFull transcript of Questions for Oral Answer for Wednesday, 14 May 2008 [PDF 193k]

2. Immigration, Minister—Confidence

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

2. Hon BILL ENGLISH (Deputy Leader—National) to the Prime Minister: Does she have confidence in the Minister of Immigration; if so, why?

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

Hon Bill English: Does the Prime Minister stand by her “no surprises” policy, which expects public servants “to advise Ministers in advance of issues likely to impinge on the Government’s responsibilities or likely to attract political comment”; if so, is it not likely that the chief executive of the Department of Labour advised her Minister of Immigration well before April 2007 that the Prime Minister’s former chief policy adviser and head of the Immigration Service was under investigation for improper behaviour?

Hon Dr MICHAEL CULLEN: If I follow that somewhat contorted question fully, I think the answer is yes and no.

Hon Bill English: Why does she have confidence in a Minister of Immigration who certainly knew about the investigation of the head of the Immigration Service in July 2007, who almost certainly must have known—

Hon Dr MICHAEL CULLEN: I raise a point of order, Madam Speaker. I think we have to be clear about which Minister we are talking about here. I was asked whether I had confidence in the Minister of Immigration, who is, of course, the Hon Clayton Cosgrove. I suggest that the member cannot then build upon that any supplementary questions relating to a Minister who may have held that office before the Hon Clayton Cosgrove did, otherwise that opens up the ability, for example, to ask the Prime Minister a question about confidence in the Minister of Finance, then to ask me as Acting Prime Minister about Mr English.

Gerry Brownlee: Notwithstanding the example Dr Cullen gave, the reality is that the Minister of Immigration in this case would always be presumed to be the Minister of Immigration in the current Government, and there should be no separation of the role of Minister of Immigration even if the personalities holding that particular portfolio change. There is one Minister of Immigration. To suggest that suddenly a new Minister will not be responsible for, or accountable for, actions in that department prior to that time is, I think, a little bit of a stretch for the House to accept. In any case, does that mean that the Prime Minister is unable to express confidence in the work of the Hon David Cunliffe?

Hon Dr MICHAEL CULLEN: I think the last point is totally irrelevant. The point is that I cannot be asked questions in my prime ministerial role about the actions of the Minister of Immigration previously who is not the current Minister, when the primary question asked me for confidence in the Minister of Immigration who is the current Minister of Immigration, not all those people who have held office as Minister of Immigration in this Government.

Rodney Hide: This is a problem, Madam Speaker. I am sure the Hon Dr Michael Cullen will agree that we have to be able to ask questions about decisions made by a previous Minister, because if we cannot, then obviously the Government could just rotate Ministers through and there would be no responsibility. I think the difficulty we have is with the wording. I suggest, Madam Speaker, that you allow this question to proceed but give us some advice, because how to actually phrase the wording has been an ongoing problem.

Madam SPEAKER: I thank members for their contribution. Ministers are responsible for their portfolio areas, so a question relating to confidence in the Minister of Immigration—although it would be to the current Minister of Immigration—about issues relating to immigration outside the scope of the current Minister’s time in office, would be relevant to be asked. I think the issue is about the naming of specific Ministers, as opposed to about the responsibilities relating to the Minister of Immigration. So it is more, I think, Mr English, about the way in which you phrase your question, please.

Hon Bill English: How can the public have confidence in the operation of her Government, when it appears that the Minister of Immigration knew about the investigation in July 2007 but sat on it until media attention in May 2008; and that previous Ministers of Immigration almost certainly knew about these events when they occurred in 2005?

Hon Dr MICHAEL CULLEN: I am still not quite sure what bit of non-existent dirt the member is trying to dig up, but if he is trying to imply that any Minister knew about the latest allegation surrounding the previous head of the Immigration Service, then I can assure him that he is completely wrong.

Hon Bill English: Does she stand by her statement: “It is a bit surprising that the matter was dealt with in the way it was.”, when it would be a surprise if we were expected to believe that the chief executive of the Department of Labour investigated improper conduct by the head of the Immigration Service in 2005 and never told anybody; that the stand-in chief executive commissioned a report by Mr Oughton and never told anybody; and that Ministers did not find out until November 2007?

Hon Dr MICHAEL CULLEN: I must say I do have a PhD in history but I am having real trouble following what the member is trying to get at in terms of time lines here. The chronology seems to be—

Hon Members: The Minister is covering up.

Hon Dr MICHAEL CULLEN: Not at all; the previous question implied that Ministers were trying to say they knew nothing about something until May 2008; now the member is trying to say “November 2007”. The fact that there was an inquiry undertaken by Mr Oughton is a well-known fact. There is no dispute about that, and that was in relation to matters of employment issues and certain actions by Miss Thompson. The member seems still to be trying, in some way, to link this to some much more recent accusations, which are the subject of police investigations, which Ministers knew nothing about until other people did.

Hon Bill English: Can the Prime Minister confirm that the activities of the head of the Immigration Service, which were investigated by the Department of Labour, occurred in 2004-05, about the same time as Taito Phillip Field was obtaining large numbers of discretionary approvals from the Associate Minister of Immigration; and is it not possible that the behaviour of Ministers and MPs around immigration matters created an environment where officials felt they too could break the rules with impunity, because her only standard for behaviour is “Don’t get caught.”?

Hon Annette King: Rubbish!

Hon Dr MICHAEL CULLEN: That is not merely rubbish; it is very close to being paranoid rubbish. There is no linkage between those events, at all. I point out to the member that investigations have occurred. In one of those cases those investigations led to police investigations, and deposition hearings are being carried out. In the second case, matters have now been referred by the State Services Commission to the police. The other matters are employment matters, which came to an end, obviously, with Miss Thompson’s resignation. But there are now other matters under police investigation, and I have no intention of satisfying the member’s desire to try to prejudge the outcome of those.

Hon Bill English: Can the Minister explain why these events are following a particularly similar road to those surrounding Taito Phillip Field—namely, that the Minister of Immigration at the time, David Cunliffe, knew about it and did nothing, that the Government then attempted to cover up the activity, then denied that anything happened, then denied the need for an investigation, then, under media—[Interruption] I raise a point of order, Madam Speaker. Can I start again?

Madam SPEAKER: No, just continue, please, because there were interruptions all the time. It was very difficult to hear the answer to the following questions, so would you please just continue.

Hon Bill English: I raise a point of order, Madam Speaker. My colleagues are telling me they could not hear the question.

Madam SPEAKER: In which case, then, we will—but we will have the answer in silence, too.

Hon Bill English: Can the Prime Minister tell the House why the Government is going down the same road as it did with Taito Phillip Field, namely that the Minister of Immigration at the time, David Cunliffe, knew about these activities and did nothing, that the Government then tried to cover that up, denied anything happened, then denied any need for investigation, then under media pressure caved in and shoved the matter off to the police to try to avoid any further political damage?

Hon Dr MICHAEL CULLEN: That question makes Mr Ian Wishart look like a raving rationalist compared with that member. What actually happened in this case was that certain events came to light, an investigation was undertaken by Mr Oughton, and those related in the end to employment matters—the responsibility of the chief executive—were dealt with. The chief executive subsequently, after further questioning by the current Minister, sought legal advice as to whether he was able to re-open the initial investigation about employment matters and was advised that he was not. Subsequent to that it was determined the State Services Commission could investigate the investigation itself, which is what the State Services Commission has been doing. In the course of that investigation, matters have emerged, previously unknown to Ministers, questioning Miss Thompson’s credentials that she claimed in applying for appointments both in 1990 and in 1998 in the Department of the Prime Minister and Cabinet, and because of the nature of that evidence, that evidence has been referred to the police for investigation. That is not some kind of conspiracy.

Hon Bill English: So is—

Hon Trevor Mallard: I raise a point of order, Madam Speaker. Three separate National members interjected after a clear direction to all members of the House not to interject on questions or answers. I ask you to reflect on whether reminding them three times as you did, not to, during that question, by calling order, is enough.

Madam SPEAKER: I thank the member and I also noticed there was an interjection from members on the Government side of the House as well. However, I will say to members we now have zero tolerance. I will be asking members to leave if they do not observe the rulings of the Speaker.

Hon Bill English: So is the Prime Minister now expecting the public and the Parliament to believe that everything is fine, and was fine when, in the Department of Immigration in the period 2004-2005, the department was caught lying in unison by the Ombudsman, a member of the Labour Government was caught indulging in activities that have now landed him in a corruption trial in court, and the head of the Immigration Service was caught influencing officials on behalf of family members and apparently David Cunliffe knew nothing about it, the Prime Minister knew nothing about any of this, and the public is expected to think that high standards of public behaviour have been imposed by her?

Hon Dr MICHAEL CULLEN: Clearly not. How Mr Cunliffe could be accused of knowing nothing when an investigation was under way while he was the Minister, even that member’s strange, contorted mind cannot possibly arrive at. I remind the member yet again that both the case of Mr Field, where charges are being laid and the matter is now in front of the court, and the case of Miss Thompson, where the police are undertaking investigations, would scarcely suggest the Government does not take the matters seriously. But these are now matters that are outside the ability of this House to start making comment on, and if we show respect for the legal process, then we should actually maintain some silence about those processes now.

/NR/rdonlyres/7C6A7331-5D61-46F2-BA3D-381E03057BDD/83378/48HansQ_20080514_00000098_2.pdfFull transcript of Questions for Oral Answer for Wednesday, 14 May 2008 [PDF 193k]

3. Emissions Trading Scheme—Transport Sector

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

3. JEANETTE FITZSIMONS (Co-Leader—Green) to the Minister responsible for Climate Change Issues: Why has the Government delayed the inclusion of the transport sector into its proposed emissions trading scheme?

Hon PETE HODGSON (Minister for Economic Development) on behalf of the Minister responsible for Climate Change Issues: In short, because the rapid and significant rise in the price of world oil is doing the job for us.

Jeanette Fitzsimons: If inclusion in the emissions trading scheme is dictated by consumer affordability—in this case, the price of oil—why on earth has the Government further delayed, rather than brought forward, the obligation of the agriculture and energy sectors, when the dairy payout is up 60 percent on last year’s and export coal prices have recently tripled, leading to rapidly increasing emissions from cows and coal?

Hon PETE HODGSON: As the Minister responsible for Climate Change Issues has said on many occasions, the emissions trading legislation is a matter of striking a balance between many competing interests. The Government thinks that the balance that has been expressed in recent days is at about the right point, and I look forward to the support, I hope, of all the members of this House for the passage of the legislation on its return from the select committee.

Charles Chauvel: Does the changed entry date for certain sectors alter the fundamentals of the emissions trading scheme?

Hon PETE HODGSON: No, it does not. The fundamentals remain intact. Let us remind ourselves of what they are. The fundamentals are all gases and all sectors, and—in some respects, a more important fundamental—participants will face the full price of their emissions at the margin. In other words, the marginal signal comes into effect from the outset.

Hon Dr Nick Smith: How will the emissions trading system now work, when officials advise that the originally designed scheme carefully balanced the market of 100 million tonnes of buyers and 100 million tonnes of sellers of credits from forestry, but now, with the deferral of the transport fuels, there is 40 million fewer tonnes of buyers, leaving foresters with no one to buy their credits, and does not this illustrate that the decision to defer the transport fuels was a knee-jerk reaction made outside of a proper policy process?

Hon PETE HODGSON: No, there has been no knee-jerk reaction. But the answer to the essence of the member’s question is that the emissions trading scheme is not a domestic scheme but an international one, and the world is a big place.

Jeanette Fitzsimons: Why does the Minister think it will be easier to bring in transport fuels in 2011—which is another election year—when oil prices will be much higher than they are now; or does he think that because emissions are not rising, it is OK to stabilise transport emissions at their current level of 60 percent above our 1990 target?

Hon PETE HODGSON: I thank the member for acknowledging that transport emissions have at last stabilised. I think the member and I in earlier years were wondering whether that would ever happen; well, it has. But I think the member raises a good point, and I suspect that the best way to answer it is to remind the member that behaviour is driven by not just the level of oil prices but also the pace of change, and the pace of change has been dramatic. The price of oil 3 or 4 years ago was about one-quarter of what it is now. It has been a really dramatic change

Peter Brown: Noting the Minister’s plea for support for the bill when it comes back to the House, is he aware of the concerns of the New Zealand Shipping Federation that failing to exempt local shipping companies from the emissions trading scheme will hand international ship operators a substantial cost advantage at a time when there is a clear environmental and transport need to grow our domestic shipping industry; if he is aware of that, can he advise how the issue will be rectified?

Hon PETE HODGSON: I am afraid I am not able to give the member a thorough answer to his question at this point, in my role as an acting Minister. But I will say that the member raises one of many different points of view about who should be excluded, included, exempted, given a special deal, or not given a special deal, and that is the debate before us. The question is whether this House believes we have struck the right balance and will support the legislation on its return from the select committee. It is now 11 years since the Kyoto Protocol was signed. It is now 6 years since the Kyoto Protocol was ratified. It is time—sooner or later—to move.

Jeanette Fitzsimons: Does the Minister agree with the statement of the Nobel Peace Prize - winning scientist and chair of the UN Intergovernmental Panel on Climate Change, RajendraPachauri—who, incidentally, will be the feature guest of the Government next month, when the world spotlight will be on New Zealand hosting World Environment Day—that “If there’s no action before 2012, that’s too late. What we do in the next two to three years will determine our future. This is the defining moment.”; and what are the implications of that statement for the half of our emissions that are totally exempt until 2013?

Hon PETE HODGSON: I think that Dr Pachauri has put his finger on it, and I think that the Intergovernmental Panel on Climate Change, as a body of knowledge, has done this globe an amazing service. However, the member overlooks the fact that there is the idea of a full charge and there is the idea of a marginal charge for additional emissions. The marginal cost—the marginal price signals—is something that will come into play in this country ahead of its coming into play in most countries. If we can get it through, we can say that we have shown some degree of leadership in this area.

Peter Brown: Can I outline a few facts to the Minister: New Zealand coastal vessels already face costs that foreign vessels do not—

Madam SPEAKER: Is this the question, please? Would the member just ask the question.

Peter Brown: Is the Minister aware of these concerns: New Zealand coastal vessels already face costs that foreign vessels do not, fuel costs represent a significant proportion of a vessel’s operating costs, and a coal-burning vessel would be exempt while a liquid-fuel vessel would not be exempt? Does the Minister agree that that does not make sense and something must be done about it?

Hon PETE HODGSON: I am aware of the first two facts that the member posits; I was unaware of the third. But, then again, I do not know of a coal-fired vessel. Maybe we still have them; I am not sure.

/NR/rdonlyres/3F1442D7-37B2-4DFE-AAE3-59F497A8F8F3/83380/48HansQ_20080514_00000191_2.pdfFull transcript of Questions for Oral Answer for Wednesday, 14 May 2008 [PDF 193k]

4. Immigration Service—Mary Anne Thompson

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

4. GERRY BROWNLEE (National—Ilam) to the Minister of State Services: When will the State Services Commissioner complete his investigation into concerns about the handling by the Department of Labour of matters relating to family members of the former head of the Immigration Service?

Hon Dr MICHAEL CULLEN (Leader of the House) on behalf of the Minister of State Services: The State Services Commissioner advises that his investigation is making good progress but he is not yet in a position to provide a date for the completion of the investigation.

Gerry Brownlee: When did the Minister of State Services become aware of allegations of inappropriate behaviour relating to the head of the Immigration Service?

Hon Dr MICHAEL CULLEN: I am not sure I can answer that question. I am not quite sure what the member is referring to. If it is the matter in relation to family members, then I have no information on that matter. If it is in relation to the more recent accusations, that would be within the last couple of days or so.

Gerry Brownlee: Why cannot the Minister give a straight answer to the very important question of when the Minister of State Services first found out about allegations relating to Mary Anne Thompson and the advantage that may or may not have been given to her family; and why is his memory so unreliable when there are public statements from Clayton Cosgrove, David Cunliffe, and the Prime Minister on this matter?

Hon Dr MICHAEL CULLEN: One of my colleagues has helped me by advising that probably the Minister found out when he became the Minister in November last year, and when he was presumably briefed on matters concerning the State services.

Gerry Brownlee: Why did the Minister of State Services not then launch an immediate investigation into the allegations and how they were dealt with, rather than waiting for Television New Zealand (TVNZ) to uncover the wrongdoing and for the Prime Minister to indicate that an inquiry should be undertaken, in an obvious effort to avoid further embarrassment around the Public Service in New Zealand?

Hon Dr MICHAEL CULLEN: I will try to run through the chronology again. Some matters were raised, as I understand it, which led to the Chief Executive of the Department of Labour commissioning an inquiry. That was appropriate, because the chief executive was the person responsible for employment matters in relation to Mary Anne Thompson. That investigation was carried out, and reported to the chief executive. The report was his property. He took the action he deemed appropriate. In the light of subsequent information coming to light—the other information coming to light—there was obviously significant further concern. Eventually the State Services Commission decided to investigate the investigation itself—that is, had the chief executive carried out his functions properly? It is not a matter for the Minister; it is a matter for the State Services Commissioner, because the commissioner is the responsible person for the employment of chief executives.

Gerry Brownlee: Can the Minister confirm that the Chief Executive of the Department of Labour, Dr Buwalda, became aware of these allegations sometime towards the end of 2006 or in 2005; that he subsequently required Mr Oughton to undertake an inquiry; that, first, Mr Oughton reported on an interim inquiry to the Minister in May 2007 and, second, he gave a final report in July 2007; that the Minister decided to sit on that report until it was handed over to the new Minister in December 2007 and the new Minister also decided to sit on that report; and that it was not until investigative journalism by Television New Zealand uncovered the full extent of the potential for corruption here that the Prime Minister finally decided to give up the cover-up and undertake a further investigation?

Hon Dr MICHAEL CULLEN: I think there are roughly about two yeses at the start and the rest of the answers are nos, because the member made one significant change during the course of his question. The chief executive ordered the inquiry. The inquiry was carried out by Mr Oughton. Mr Oughton reported to the chief executive, not to the Minister. The Minister did not receive the report.

Gerry Brownlee: Is the Minister asking the House to accept that very serious allegations about the head of the Immigration Service were investigated by Mr Oughton at the behest of the Chief Executive of the Department of Labour, that at no point did the Chief Executive of the Department of Labour tell the Minister of Immigration, the Minister responsible for the Department of Labour, the State Services Commissioner, or the Minister of State Services, and that when the Minister finally got the report in July he saw no particular reason to be surprised or concerned or to ask a few more questions?

Hon Dr MICHAEL CULLEN: The then Minister of Immigration did not receive that report. I find it extraordinary that a party that for the last 2 years has been chasing any number of stories, partially true or completely untrue, about ministerial interference in the employment of staff should suddenly turn round and say that the Minister of Immigration should have had his fingers all over an issue relating to the employment of staff within the Department of Labour.

Gerry Brownlee: Can the Minister not see the position that we are trying to get to here and, perhaps, the double standard that his Government operates under: we have serious allegations of corruption against a senior public servant, and Ministers want to dismiss that as being an operational matter and nothing to do with them, but just last year a person working in a ministry had Ministers meddling all over the top of it, not because she had done anything wrong but simply because she knew a person the Government did not like?

Hon Dr MICHAEL CULLEN: Well, I think that the double standard was actually brought right into that question, if I understood the question correctly. The member needs to understand that this was entirely a matter for the chief executive. It was not a matter for the Minister—not a matter for the Minister—who did not receive the report. If one does not receive a report, then it is very hard to cover it up.

Gerry Brownlee: Can the Minister of State Services explain why the Prime Minister said that the Hon Clayton Cosgrove had received the report, that that report was handed to him by the Hon David Cunliffe, and that the Hon Clayton Cosgrove, like the Hon David Cunliffe, was keeping his colleagues informed, or was the Prime Minister simply desperately saying anything she could say to avoid the allegations of a cover-up?

Hon Dr MICHAEL CULLEN: There is no cover-up. There is no report handed by—

Hon Dr Nick Smith: Why did it take TVNZ to open it?

Hon Dr MICHAEL CULLEN: One has to make special allowances for that member. There is no report handed by the previous Minister of Immigration to the incoming Minister of Immigration. When new facts became available, then the State Services Commission launched an inquiry into whether the former chief executive had carried out his investigation properly. The chief executive, in Mr Cosgrove’s understanding, tried to see whether, in fact, he could reopen the original investigation and was advised by Crown Law that he could not do so because of employment law matters.

Gerry Brownlee: Does the Minister think it is appropriate that all that now appears to be on the record as Government action in this case is the ordering of an investigation into an investigation, and no particular investigation into the validity of the allegations that are being made, and as to whether there is widespread corruption inside the Immigration Service?

Hon Dr MICHAEL CULLEN: We have moved from one set of allegations about actions by Ms Thompson to, I assume, another set of allegations about Ms Thompson, and to a much wider set of allegations about the entire department. At this point, of course, like all conspiracies, it is feeding off itself. However, I am sure the member is aware—he ought to be—that in fact the current chief executive has ordered a full review of the operation of the Pacific branch of the Immigration Service.

/NR/rdonlyres/DE357102-B449-4454-B13B-3B5930482E75/83382/48HansQ_20080514_00000274_2.pdfFull transcript of Questions for Oral Answer for Wednesday, 14 May 2008 [PDF 193k]

5. Roading—Waterview Connection

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

5. PETER BROWN (Deputy Leader—NZ First) to the Associate Minister of Transport: Is Transit going to ensure that the fumes from the venting stacks of the proposed motorway tunnels project through Waterview in Auckland are filtered; if not, why not?

Hon JUDITH TIZARD (Associate Minister of Transport) : Transit’s proposal to build twin tunnels to connect State Highway 20 at Mount Roskill with the north-western motorway at Waterview is only at a preliminary design stage. The community has recently been consulted on Transit’s preferred option. The final design of any proposed ventilation system will be subject to international best practice and local consent processes, including compliance with the New Zealand air quality standards.

Peter Brown: Is the Minister aware that there is a school in close proximity to the proposed tunnel, and that that school, as well as others, is prohibited from incinerating rubbish in order to reduce emissions of tiny particles, yet Transit is considering building a chimney stack that is unfiltered; is that acceptable to the Minister?

Hon JUDITH TIZARD: Yes, indeed, I am. In fact, I met with Waterview School principal, Brett Skeen, and the board of trustees, together with Transit officials, about a fortnight ago to consider a range of issues around community consultation over this project. I was delighted at the agreement that was reached, that the local community will be consulted on all stages of design, and I expect that to happen.

Dave Hereora: What is the Government doing to reduce vehicle emissions and improve air quality?

Hon JUDITH TIZARD: The Government has undertaken an extensive range of work to improve air quality from vehicles. This includes the 2007 vehicle emissions rule improving fuel qualities—especially for diesel—which introduces a visible smoke check at warrant of fitness level, and public education campaigns. The Government is also exploring further measures to reduce the level of harmful emissions, especially those from diesel vehicles. I make the point on this specific, that having the motorway at surface level would certainly not result in better air quality than having the tunnels. All of these issues are being investigated as this project proceeds.

Peter Brown: Will the Minister give a straight answer; is it satisfactory to her that billions of dollars can be spent on a tunnel, yet consideration can be given to building a chimney without a system for filtering air particles?

Hon JUDITH TIZARD: This project is at the design stage. Transit New Zealand works to the best international levels that it can find. Transit is aware of many tunnels around the world that have unfiltered systems and it is aware of one filtered tunnel system in Japan, but the filtering is actually to remove soot to improve the air quality within the tunnel, rather than to improve the air quality above the tunnel. All of these issues are being considered. Transit will work with the local authorities, including the Auckland Regional Council, which is responsible for air quality, and we will do our best to provide Auckland with a good motorway system and the people of Waterview with the cleanest air possible.

Peter Brown: Noting that the Minister has already met with the school, is she aware that there is huge public concern about this issue, and will she front up to a public meeting and explain what she has just explained to us in this House?

Hon JUDITH TIZARD: Transit New Zealand reports that 75 percent of the people who responded to its proposal favoured the Waterview Connection tunnel proposal, 8 percent were neutral, and about 17 percent opposed the proposal. Transit New Zealand’s board intends to have an open meeting in Auckland early next month to consider the submissions and the proposals. All of that will be in public. I am very happy to front at any stage, but I suggest that the best process is for the Transit New Zealand board to be open in its discussions as the design proceeds.

Keith Locke: Following the admission of the Minister responsible for Climate Change Issues during question No. 3 that transport emissions have stabilised and will presumably decline as the petrol price rises, at what point does the Government think that spending $2 billion on 4.5 kilometres of a motorway to Waterview is not cost-effective or of net benefit to the community, including the local school?

Hon JUDITH TIZARD: This Government is determined to provide Auckland with a decent public system of roading that will include busways, walkways, and cycleways. For the first time we have put social and environmental concerns into the road building process. Buses could well use these tunnels and, given that the vast majority of people consulted prefer the tunnel option because it will not destroy several suburbs as most of the National Party’s motorway projects have, I think it is a great step forward.

/NR/rdonlyres/4C53CFFD-390C-437F-9738-E045628E79BE/83384/48HansQ_20080514_00000370_2.pdfFull transcript of Questions for Oral Answer for Wednesday, 14 May 2008 [PDF 193k]

6. Climate Change—Statement

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

6. Hon Dr NICK SMITH (National—Nelson) to the Minister responsible for Climate Change Issues: Does he stand by his statement regarding climate change on Radio New Zealand’s Checkpoint that “I am absolutely clear, in my own mind, that I could make mistakes in a lot of my portfolio areas”?

Hon PETE HODGSON (Minister for Economic Development) on behalf of the Minister responsible for Climate Change Issues:The Minister—[Interruption]

Madam SPEAKER: The question has been asked; members are entitled to hear the reply.

Hon PETE HODGSON: The Minister responsible for Climate Change Issues has always known that he has feet of clay, unlike the member opposite, who believes he can walk on water.

Hon Dr Nick Smith: To the Minister—[Interruption]

Madam SPEAKER: Right, we are back to silence. The question will be heard in silence, as will the answer.

Hon Dr Nick Smith: Was it a mistake or the intent of the emissions trading legislation that the Government would get a windfall gain, as advised by officials, of between $6 billion and $22 billion from the sale of permits, at the expense of consumers and businesses, over the design period of the scheme; and of what benefit will any tax relief in the Budget be if it will be taken back through the emissions trading scheme?

Hon PETE HODGSON: The answer to the second part of the question is that the member will need to wait until next week. The answer to the first part of the question, I regret to advise, is that I do not know.

Hon Dr Nick Smith: I raise a point of order, Madam Speaker. The issue of whether the Government makes a profit of between $6 billion and $22 billion was included in the Cabinet papers around the design of the emissions trading scheme. The member concerned is a member of the Cabinet, and I find it extraordinary for a Minister to say he simply does not know.

Madam SPEAKER: The Minister did address the question.

Hon Peter Dunne: Do the mistakes the Minister referred to include yesterday giving the House information on increased household costs arising from the emissions trading scheme that was based on a carbon price of around $25 per tonne, when the current secondary price is already around $35 a tonne and rising; and will he now concede that the figures he gave the House were less than half the actual increased costs that households are likely to bear, and that the real figure is nearer $25 to $30 a week rather than the $2 to $4 a week he told the House yesterday?

Hon PETE HODGSON: I doubt that the figure will be anywhere near as high as that. But in respect of the future price of carbon, I would simply offer that at the moment there is more than one price around the world for carbon. This Government prefers to rely on Treasury advice in respect of the price of the carbon, and $35 is higher than that advice.

Hon Dr Nick Smith: Was it a mistake, or was it intended that the emissions trading scheme require domestic refrigeration and heat pump manufacturers to have to pay for the considerable cost of synthetic refrigerants, but importers of overseas manufacturers’ fridges and heat pumps with exactly the same synthetic refrigerants do not have to pay, which is a policy that will put at risk thousands of New Zealand jobs in companies like Temperzone, Fisher and Paykel, and Skope Industries; if so, why?

Hon PETE HODGSON: The legislation is before the select committee. The member is on the select committee. The member may wish to take up that argument with other members of the select committee. That would be the best way for him to earn his salary.

Moana Mackey: What reports has the Minister received regarding support for action on climate change in the form of an emissions trading scheme?

Hon PETE HODGSON: Support for emissions trading continues to grow in New Zealand, and, in fact, continues to grow around the world. Only a day or two ago I was pleasantly surprised to learn that the likely Republican presidential candidate, John McCain, proposes a “cap and trade” system, and wants to take it—should he be elected to the presidency—to the American political apparatus. And, of course, the recent change of Government in Australia means that Australia is now moving to an emissions trading scheme, which is scheduled to start in about 2 years’ time. Federated Farmers, who are long-time opponents of many aspects of climate change policy, are now firmly of the view that they will support an “all gases, all sectors” approach to emissions trading. It is the National Party members who have not yet made the shift. They say they want to, but they always say that it is not perfect yet and more time is needed. They have been doing that since 1997, and it is time they stopped.

Hon Dr Nick Smith: Was it an error, or was it intended that Holcim, a cement company that operates 27 cement plants within the European emissions trading system and one in New Zealand’s emission trading system, would have to pay 16 times as much per tonne of carbon in New Zealand that it does under the European system; and what does he think the impact of this detailed design issue of the emissions trading scheme will do to that company’s proposed half-billion-dollar investment in a far more efficient cement manufacturing facility in New Zealand?

Hon PETE HODGSON: There they go again. The National Party members say they want to do something about climate change, only there is this problem that they say we need to fix, so that they can come up with the next problem for us to fix, and actually we never get anything done! Let me answer the question. The cement industry will face a reduction in its allotment of, if you will, freedom to emit emissions from 2019. That is 11 years from now. I suggest that members opposite, if they were fair in their thinking, would agree with me that by then we are almost certain to have a sector by sector approach globally in areas such as cement, because unless we do it that way, we almost certainly will never be able to bring in enough of the Third World in time. Only a week ago we pushed it out a further 5 years, to give more certainty to companies such as the one the member has just mentioned, but still he cannot stop bitching and grizzling about it, because in his heart he does not want anything to happen.

Hon Dr Nick Smith: Can the Minister explain how the global environment would benefit from the closure of the Bluff smelter, when 100 percent of the electricity used there is renewable, and if the plant was relocated to an area like South-east Asia, where the electricity is most likely to come from the burning of coal, we would have the scenario of New Zealand losing 1,000 jobs and an increase in global emissions—how is that going to help things?

Hon PETE HODGSON: I have pretty much the same answer. I agree with the member that carbon leakage does not do anybody any good. I agree with the member; I understand that. But, you see, that is why the attempt has been made to strike a balance, so that the smelter does not begin—begin—a reduction in its free allocation until 2019. The smelter has been improving its efficiency for some years now, and it is doing a really good job of it. If it cannot make further efficiencies between now and 2019, I would be surprised. But, almost certainly, by then the aluminium smelters of the world will be subjected to some form of agreed regulatory world best-practice. One can smell it coming. So we can move ahead with the emissions trading regime now, wait until it starts to bite in 2019, and around about 2017 check back on the 28 comments I have just made to see whether they were right. I reckon they will be.

Peter Brown: Noting the Minister’s earlier answer that John McCain, if he became President, would look favourably at an emissions trading scheme, that Kevin Rudd in Australia—

Madam SPEAKER: Would the member please just ask a question. You are prefacing it with statements.

Peter Brown: Noting the Minister’s earlier answer along those lines, does it not make sense that New Zealand work in tandem with some of these countries, rather than try to lead the field; if not, why not?

Hon PETE HODGSON: I have just been invited to work in tandem with Australia and the US. Here is a fact: only three Western countries have signed but not ratified. They are Monaco, Australia, and the US. They are the laggards. We were the 102nd country to ratify—hardly leaders of the pack—yet the member invites us to delay our progress still further. It is time we came to a decision.

Rodney Hide: Does the Minister agree with the analysis by the Federation of Māori Authorities that the emissions trading scheme will provide a hit on the balance sheet of Māori of $2 billion; if not, what does he suggest the hit on the balance sheet of Māori will be, given that it has to be a positive number?

Hon PETE HODGSON: I regret I do not have an answer to the member’s question, but it is clear that Māori are big players, and getting to be bigger players, in the forestry sector, and, depending on the age of their trees, they can benefit.

/NR/rdonlyres/F9F8EF81-F077-43FB-9722-CF71144C0315/83386/48HansQ_20080514_00000432_2.pdfFull transcript of Questions for Oral Answer for Wednesday, 14 May 2008 [PDF 193k]

7. Competition Law—Crown Companies

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

7. Hon PAUL SWAIN (Labour—Rimutaka) to the Minister of Commerce: How is the Government changing competition law to promote effective use of public investment in Crown companies?

Hon LIANNE DALZIEL (Minister of Commerce) : The Government is announcing today our intention to amend the Commerce Act to allow State-owned enterprises and Crown research institutes to cooperate for mutual benefit under ministerial direction without being subject to the competition requirements in the Commerce Act. Although the Government recognises the general benefits of competition, this proposal was targeted at areas where a collaborative approach would be in the public interest.

Hon Paul Swain: Can the Minister advise how the Commerce Act currently provides for interconnected companies to collaborate without breaching the competition provisions of the Act?

Hon LIANNE DALZIEL: The Act already allows interconnected private sector companies to work together, as they are treated as a single entity under the Act. This essentially exempts them from the prohibitions against anti-competitive behaviour. The Government’s decision will see State-owned enterprises and Crown research institutes other than Meridian Energy, Mighty River Power, and Genesis Energy treated as interconnected bodies in terms of the Act. This is a very positive announcement in terms of the potential benefits of maximising cooperation within the public sector as currently occurs in the private sector.

/NR/rdonlyres/2ADEFA3D-4158-40DE-8814-9145335A4DE6/83388/48HansQ_20080514_00000530_2.pdfFull transcript of Questions for Oral Answer for Wednesday, 14 May 2008 [PDF 193k]

8. Blue Lake Track—Logging

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

8. Hon Dr NICK SMITH (National—Nelson) to the Minister of Conservation: What will be the impact on the Department of Conservation’s Blue Lake Track in Rotorua of the proposed logging of the 90-year-old Douglas Firs on the side of the lake?

Hon STEVE CHADWICK (Minister of Conservation) : There is a track on the scenic reserve near the logging area and there will be some restrictions on public access during the logging for safety reasons. However, public access will be maintained during the evenings and the weekends and the scenic reserve itself will not be affected.

Hon Dr Nick Smith: Why, after the National Party candidate in Rotorua, Todd McClay, raised the issue publicly did the Minister issue a Government press release stating that she had been working for some time to resolve the issues, when in fact she had told constituents there was little that she could do?

Hon STEVE CHADWICK: Actually I have been working on this issue for some considerable time—long before the National candidate was selected. I meet regularly with the district council, and on this issue we have been working to preserve access for recreational use of this beautiful iconic forest. That is my role as the MP for Rotorua, and I will continue to do that.

Hon Dr Nick Smith: What did the Minister mean when she emailed a constituent, in response to devastating photos of the logging: “God, Ray, get the tree huggers there. There is little more that I can do.”?

Hon STEVE CHADWICK: I understand that Nick Smith has been in the region just recently hugging a tree, so it is good to know he was there to support us on this issue, which is incredibly important to us in Rotorua. On this issue, that gentleman, as a recreational cyclist, works with me to try to ensure that we preserve access for walkers and mountain bikers into our beautiful Blue Lake, Green Lake, and Whakarewarewa Forest. That is my job as the MP for Rotorua and I will carry on doing it—and I will be a tree hugger, too.

Hon Dr Nick Smith: What faith can New Zealanders have in their Minister of Conservation when confronted with the logging of 100-year-old trees on the Department of Conservation’s very popular Blue Lake track at one of the most iconic tourism spots in New Zealand, and in her own electorate, when her response is: “God, Ray, get the tree huggers there. There is little more that I can do.”?

Hon STEVE CHADWICK: This forest is managed by Timberlands forestry. It is interesting to see an Opposition member now saying that the Government should interfere in relation to forestry farmers felling trees selectively in our area that have grown around Rotorua for as long as I have been there. We are not in the business of telling an industry how to manage itself.

Hon Dr Nick Smith: Does the Minister think she has her ministerial priorities right when the very day she sent the email saying to get the tree huggers and that there was nothing she could do was the Friday prior to the Labour congress, when she was putting together the ditty for the congress attacking National leader, John Key; and does she think that if she were perhaps a little more focused on her electorate and ministerial duties we might have saved some of those trees?

Hon STEVE CHADWICK: I wish I could sing, as an MP, about the values of our fantastic community, which is working on preserving the values of the trees in our area, and also our pathways and recreational reserves. This logging is not happening on Department of Conservation land, let me correct the Opposition.

Hon Dr Nick Smith: Is the Minister aware that the Conservation Act provides an advocacy role for the Minister, that Professor Hamilton from Waikato University has said that this pristine, iconic lake may die as a consequence of the runoff from the logging, and that the covenants, held by the Crown on the forest, state: “shall promote the natural and intrinsic values and landscape amenity of the forest”; and, noting that, what specifically will she and her department do to ensure that these great trees are not lost?

Hon STEVE CHADWICK: These trees are Douglas firs, and we need to be very clear on that issue. These Douglas firs have been grown for the purpose of forestry farming. We love these trees—absolutely. I am not the Minister responsible for the covenant but I am the member for Rotorua, and am very much responsible for ensuring ongoing access to these cycleways and walkways, while at the same time working with the forestry company to know its forward-forestry management plans and making sure we can adjust our tracks. That is what I have done in respect of the mountain track in our community. In terms of the water quality of the lake, I met last week with the chief executive of Environment Bay of Plenty, who assured me that the organisation is regularly monitoring the runoff into the water, as is its responsibility for monitoring lake-water quality.

Hon Dr Nick Smith: I have in my hand the email stating: “God, Ray, get the tree huggers there. There is little more that I can do. Cheers, Steve.”—

Madam SPEAKER: Does the member wish to table this?

Hon Dr Nick Smith: I seek leave to table that email.

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

Hon STEVE CHADWICK: I seek leave to table the harvesting operation plan, which shows that this operation is not on Department of Conservation land.

 Leave granted.

/NR/rdonlyres/AB0908F5-8135-4D69-BFAB-2B83CBA169F8/83390/48HansQ_20080514_00000557_2.pdfFull transcript of Questions for Oral Answer for Wednesday, 14 May 2008 [PDF 193k]

9. Home-based Support Workers—Funding

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

9. Hon MARK GOSCHE (Labour—Maungakiekie) to the Minister for ACC: What recent announcements has she made regarding funding for home-based support workers?

Hon MARYAN STREET (Minister for ACC) : I am pleased to have recently announced that in Budget ’08 this Labour-led Government will allocate an additional $46.5 million over 4 years to support injured New Zealanders, affecting some 14,000 claims a year. This additional money will fund non-agency providers of home-based support, who are predominantly friends and family members of injured people who have given up parts of their own lives in order to care for them.

Hon Mark Gosche: How does this additional funding build on previous increases in funding for the home-based support sector?

Hon MARYAN STREET: In February, contracted home-support workers received a funding boost of an additional $25 million a year. Both of these increases ensure that carers’ pay rates are fair, and they will also encourage more stability in the workforce.

Pansy Wong: Is the Minister not aware of many complaints that home-based support workers are opting to exit the sector, despite the so-called extra funding, due to many of them not being able to comprehend the changes that were introduced to make them independent contractors?

Hon MARYAN STREET: The increase for non-contracted caregivers represents a substantial improvement on their rates of pay. It is designed particularly to improve low pay, and to improve the retention of those workers in that sector.

/NR/rdonlyres/69102DDB-4376-4F91-B47F-49AD923FDD74/83392/48HansQ_20080514_00000621_2.pdfFull transcript of Questions for Oral Answer for Wednesday, 14 May 2008 [PDF 193k]

10. Immigration, Department—Policy Breaches

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

10. Dr the Hon LOCKWOOD SMITH (National—Rodney) to the Minister of Immigration: Are breaches of Government immigration policy by his own department a matter of responsibility for the Minister of Immigration?

Hon CLAYTON COSGROVE (Minister of Immigration) :As the Minister of Immigration I am responsible for determining policy direction. Where immigration policy is incorrectly applied by staff—for example, when an immigration officer approves an application that does not meet policy—it is not the policy that is wrong; rather, the officer’s actions exceed his or her authority. This is a performance matter, which is the responsibility of the chief executive.

Dr the Hon Lockwood Smith: I raise a point of order, Madam Speaker. In asking this next question, I wish to quote a wee bit of the Oughton report, and because bits of it have been deleted, I have to make reference to missing bits. I will use the words “blanked out”, so that my question makes sense.

Madam SPEAKER: The member will proceed.

Dr the Hon Lockwood Smith: Is it correct that the Oughton report, as released, states: “The [blanked out] and a national office [blanked out] were directly involved in instructing staff at the PAC branch to override the policy.”; if so, what action did the Minister take to ensure that his Government’s policy was being implemented appropriately?

Hon CLAYTON COSGROVE: The Oughton report speaks for itself. What action did I take? As Minister, I was briefed on 14 December 2007 by the chief executive, for the first time. I expressed my concerns to him, but I also noted, quite properly, that these were employment matters, which pertain to his responsibility. The chief executive—new at the time—took my concern seriously. He advised me that he was looking into the matter himself, and that he had informed the State Services Commissioner of the issues. Therefore, at the time there was no need to engage the State Services Commissioner—he was already on to it. The chief executive subsequently advised me that he had taken legal advice from Crown Law as to whether, if he was of a mind to reopen the matter, he had the ability to do so. As a result, the chief executive was advised that the matter had occurred, been dealt with, and been closed by previous chief executives, and in the absence of new information he was legally precluded from reopening the matter. I finally ask the member to note that section 33 of the State Sector Act requires chief executives to act independently on individual employment matters, and, explicitly, that chief executives are “not … responsible to the appropriate Minister”.

Dr the Hon Lockwood Smith: Can the Minister confirm that under the Immigration Act only the Minister of Immigration can grant residence to people who do not meet Government policy requirements; if so, why did he do nothing when confronted with clear evidence that his department was usurping his ministerial authority, as detailed in the Oughton report?

Hon CLAYTON COSGROVE: In danger of being shrill, I will repeat what I said before and add to it. When advised of the matters on 14 December, I expressed concern to the chief executive, but I noted that these were explicit employment matters, and were for him to deal with. He was in contact with the State Services Commissioner at that point. He then engaged Crown Law to advise him whether he could reopen the matter; he could not. Subsequently, when the Oughton report was released—again, under section 33 of the State Services Act it could not be demanded by me or released to me—there were wider issues. At that point I asked—through the Minister—the State Services Commissioner to look at both the Thompson issue and the wider issues around it. Subsequent to that, the chief executive on 17 April initiated a review of the full Pacific branch, and, subsequent to that, we now have the State Services Commissioner referring to the police matters that it is not appropriate for me to comment on.

Dr the Hon Lockwood Smith: Does the Minister expect this House to believe his claim that this is just an employment matter, when the department was totally ignoring Government policy in terms of immigration policy requirements, and when his department was making illegal decisions; is the Minister claiming that he is not in any way accountable for his department ignoring Government policy and making illegal decisions?

Hon CLAYTON COSGROVE: The beliefs of that member are his and his alone. He quotes the whole of the department, as if there is some sort of clandestine conspiracy. We now know that one individual acted, and has resigned. We also know that the Oughton report identified that perhaps there were other issues, and we know that I at that point, having first seen the Oughton report at that point, engaged the State Services Commissioner, which is the appropriate course of action. If the member is saying that I, as Minister, should break the law—breach section 33 of the State Services Act—and place my fingers firmly within employment and individual matters, then I say this to him: I will not break the law, but we know what he would do if he ever had the chance to become Minister.

Dr the Hon Lockwood Smith: Is it correct that had the matter of Mary Anne Thompson’s immigration assistance to her family members not been made public by Television New Zealand (TVNZ), he would have taken no further action to deal with key officials in his department breaching Government policy and making illegal decisions on immigration matters? In other words, he would have supported a cover-up, and the only reason why anything has happened is TVNZ made it public.

Hon CLAYTON COSGROVE: I will do it more slowly this time. When I first was privileged enough to see the Oughton report, which I could not demand to see— and which the member has demanded that I release, in breach of the law—at that point, given the wider issues contained within it, I asked the State Services Commissioner to become involved and investigate the matter. The member knows this as I have told him that legal advice was sought as to whether the matter could be reopened by the chief executive. That legal advice clearly told the chief executive he could not reopen it. The report was released, and I engaged the State Services Commissioner. I cannot see how anything could be covered up when we have a number of inquiries going on, and when I was first informed of the issue at a time when the new chief executive had already been in touch with the State Services Commissioner.

Dr the Hon Lockwood Smith: Why, then, did the Minister allow his department to fight so hard against the public release of the Oughton report, and why did his department, instead of releasing that Oughton report, contract a private consultancy public relations firm to try to spin this issue to the public?

Hon CLAYTON COSGROVE: My advice is that the department did not fight against releasing the Oughton report. The advice I have from the chief executive, because—[Interruption]

Madam SPEAKER: Order! Members wish to hear the answer. Please continue.

Hon CLAYTON COSGROVE: Madam Speaker—

Dr the Hon Lockwood Smith: We want some honest answers.

Hon CLAYTON COSGROVE: Members either want the answer or not. The advice I have is that the Official Information Act request was to the department, not to the Minister, because it was about employment matters. The new chief executive, Mr Blake, took due time to look at it, took due time to examine it, and it was subsequently released in a form that was correct.

/NR/rdonlyres/B352F57E-1F53-4892-99B9-EB7D002DB18D/83394/48HansQ_20080514_00000655_2.pdfFull transcript of Questions for Oral Answer for Wednesday, 14 May 2008 [PDF 193k]

11. Carers—Withholding Tax

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

11. Hon TARIANA TURIA (Co-Leader—Māori Party) to the Minister for ACC: What feedback has she received from clients and caregivers on the decision to withhold tax on attendant care, home help, and childcare payments made by the Accident Compensation Corporation, which will come into effect on 1 July 2008?

Hon MARYAN STREET (Minister for ACC) : I have had some concerns raised with me. However, the previous tax situation was inequitable and uncertain, and this administrative change should ensure that all carers are being treated equally while at the same time making it easier for them to fulfil their tax obligations.

Hon Tariana Turia: Were all caregivers and clients involved in attendant care relationships personally advised that their status has changed to that of being self-employed, and will the Accident Compensation Corporation (ACC) increase the payments to cover all the additional costs imposed, such as GST, fringe benefit tax, PAYE, accountants’ fees, and administration, or is this another attempt by the Government to increase the tax take?

Hon MARYAN STREET: The truth of the matter is that informal carers have always been obliged, as is everyone, to pay tax on their income. The administrative change that has happened has ensured that this will occur via the Accident Compensation Corporation (ACC). It is an administrative change brought about by the Inland Revenue Department legislation. However, at the same time, this Government has seen fit, quite separately, to increase the rates of pay to carers.

Su’a William Sio: What support is the Labour-led Government providing to the sector to ensure caregivers such as those cited in the primary question are paid adequately?

Hon MARYAN STREET: As I informed the House a moment ago, Budget 2008 will allocate an additional $46.5 million over 4 years to fund non-agency providers of home-based care. This, in fact, moves the hourly rates from $11.28 to $13.82 for level 1 care, and from $13.54 to 16.59 for level 2 care.

Hon Tariana Turia: What action will the ACC take to ensure that accident compensation clients and caregivers will not be faced with retrospective tax deductions on ACC attendant care payments made prior to the tax changes being introduced, which now treat all ACC attendant care payments as income rather than compensation?

Hon MARYAN STREET: It is not the ACC’s job to gather taxation or to pursue any tax that has not been paid previously. The administrative process in place now is to require the ACC to withhold tax at source and thereafter remit it to the Inland Revenue Department. That is the only change.

Hon Tariana Turia: What response will the Minister make to a client who has written to the Māori Party, advising us that she receives ACC payments to enable her to care for her son whose disability was caused by an adverse medical event, that she receives these payments not as income earned from being employed to do a job, and that the potential threat of being required to register for GST in order to meet provisional tax obligations and other requirements may, in fact, jeopardise her ability to take care of her son?

Hon MARYAN STREET: I would be very happy to respond to that particular case if the member referred it to me. The truth again of the matter is that informal carers are paid; they are paid via the person who is the injured person. They are paid to provide that service, and there are ordinary taxation rules that apply accordingly.

/NR/rdonlyres/FDF27AE5-2B38-4240-87E6-3BA5DEC7C194/83396/48HansQ_20080514_00000736_2.pdfFull transcript of Questions for Oral Answer for Wednesday, 14 May 2008 [PDF 193k]

12. Hospitals—Safety

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

12. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: Does he have any concerns about the safety of provincial hospitals; if so, which ones?

Hon DAVID CUNLIFFE (Minister of Health) : I always treat allegations about patient safety seriously. All complex systems are capable of improvement, but I am satisfied that our hospitals are among the safest in the world. However, for example, I am aware of allegations that have recently been made at the West Coast District Health Board. The district health board and, at my request, the Ministry of Health are investigating this as a matter of urgency.

Hon Tony Ryall: Why has the health system so failed that a senior doctor at Grey Base Hospital was forced to advise her board that the hospital cannot guarantee patient safety as most systems have broken down, and that patient care is at times dangerous?

Hon DAVID CUNLIFFE: While we take all complaints of this nature very seriously, the fact that a clinician has laid a complaint in a hospital does not amount to any sort of system failure.

Jill Pettis: Can the Minister advise the House what he is doing to ensure quality and safety in our hospitals?

Hon DAVID CUNLIFFE: The Government has moved the health system from the previous Government’s obsession with the financial bottom line to one where quality and safety matter most. Since becoming Minister I have sent strong messages to the board to this effect and introduced a mechanism whereby district health board funding is tied to quality performance. I have accelerated work on system safety through the regional collaboration in clinical networks across district health board boundaries, have strengthened the work of the quality improvement committee, and facilitated an agreement with senior doctors that allows us to engage them in the quality and safety agenda.

Barbara Stewart: Is he aware that Palmerston North Hospital is facing financial problems because of strikes, staff shortages, and a sewerage leak, and is he concerned about the impact of these on patient safety at this provincial hospital; if not, why not?

Hon DAVID CUNLIFFE: I am aware that senior clinicians at Palmerston North Hospital have categorically rejected claims by the Resident Doctors Association that the hospital was in danger of closure around the time of the previous strike. I would add, however, that the situation of strikes in the health system is far from ideal, and any disruption to patient safety or scheduling is a matter of some concern. However, in the case of the junior doctors it would be of equal concern to see a settlement in the order of 40 percent, which would only set off a further round of wage claims across the sector.

Hon Tony Ryall: What assurances can he give to the people of the West Coast when Dr Forbes says that waiting lists for operations have been taken off doctors and nurses and been given to the information technology department without any clinical supervision, resulting in patients being put on the waiting list for the wrong operation with the wrong anaesthetic, patients prepped for the wrong operation, and a man needing a knee replacement was booked for a dental procedure; how can that be safe care for the patients of the West Coast?

Hon DAVID CUNLIFFE: It is normally the member who has foot and mouth problems. But the assurance I can give West Coast constituents is that we are taking these claims seriously, and that an urgent review has been mounted. I suggest that the member opposite, rather than get hysterical, should wait for the outcome of that report.

Chris Auchinvole: What assurance is the Minister able to give the people of the West Coast now, that our hospital in Greymouth is in fact safe?

Hon DAVID CUNLIFFE: It is very nice to hear from that member. The assurances I can give him are that all the proper processes are in place to treat Dr Forbes’ allegations very seriously, that an urgent review is under way, that contact has already commenced between the chief medical adviser of the Ministry of Health, Dr Forbes, and the district health board, and that my chief medical adviser will very shortly be travelling to Greymouth to further that inquiry.

Barbara Stewart: Does the Minister consider it satisfactory that hospitals need to constantly upgrade contingency plans in order to cope with possible strikes, including deferring non-urgent surgery and discharging patients early, and that under these circumstances patient safety will eventually be compromised in every hospital in New Zealand?

Hon DAVID CUNLIFFE: As I said in response to the member’s previous question, any event, such as a strike, which disrupts patient scheduling or potentially impacts on safety, is of significant concern. However, I am not aware of any particular safety crises that have arisen during the course of the last two strikes. I would reiterate, however, that of equal or greater concern would be a settlement in the order of 40 percent. That would set off a whole new round of claims throughout the sector, and I call upon both sides to take a long-term view of the good of the health system as they progress those negotiations.

Chris Auchinvole: Is it not an indictment of Labour that after its 8 years in office the West Coast health infrastructure is still being run down by bureaucrats who keep pushing doctors and nurses aside?

Hon DAVID CUNLIFFE: No. This is a Government that has doubled public investment in the health system, including that on the West Coast. The member may have some aversion to bureaucrats, but I can assure him that both the managers and the clinicians in the health system give of their very best to ensure that patients are treated well, in the interests of all people’s health.


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