Questions And Answers – Tuesday, 20 May 2008

1. New Zealand - Japan—Trade Relationship

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

1. MARTIN GALLAGHER (Labour—Hamilton West) to the Minister of Trade: What recent progress has been made towards improving New Zealand’s trade relationship with Japan?

Hon PHIL GOFF (Minister of Trade) : Last week the Prime Minister, Helen Clark, secured from Japanese Prime Minister Fukuda, agreement to undertake a joint Japanese - New Zealand study into an economic partnership arrangement, which is a free-trade agreement between the two countries. This agreement is a major breakthrough with Japan, which is our third-largest export market. It takes New Zealand exports to the value of about $3.4 billion a year. It is the first time that Japan has signalled readiness to enter into discussions about, potentially, removing trade barriers to New Zealand goods and services. That is a great step forward.

Martin Gallagher: What would the value to New Zealand be of a free-trade agreement with Japan?

Hon PHIL GOFF: If the agreement were to be as high quality and comprehensive as our recently signed free-trade agreement with China, the economic benefits would be very significant indeed. Although the Ministry of Foreign Affairs and Trade has not done its own detailed analysis of it, independent analysis by University of Otago economists this year estimated the benefits at around US$395 million a year, and that is simply the gain from removing tariffs. If one considers the benefits of reducing non-tariff barriers, and the dynamic benefits from trade, such as competition and investment effects, one finds that the gains are likely to be much greater.

Martin Gallagher: If the benefits to New Zealand are so significant, what benefits will accrue to Japan; and how does the Minister account for Japan’s change in position in agreeing to a study on a free-trade agreement?

Hon PHIL GOFF: I think the major benefit to Japan is that a free-trade agreement with New Zealand would give that country assurance of access to our high-quality, safe foods. Japan produces only about 39 percent of its own food, and is a net importer of food. Previously, it was concerned that, without protection, its farmers would be swamped by more efficient suppliers, such as New Zealand dairy farmers. But with the long-term trend of demand exceeding supply in commodities like dairy, Japan’s major concern is now food security. Japan is also beginning to see that a close trade relationship with New Zealand is certainly of benefit to its consumers but also, potentially, through collaborative relationships, of benefit to its producers.

2. Ministers—Confidence

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

Rt Hon HELEN CLARK (Prime Minister) : Yes; because they are all hard-working and conscientious.

John Key: Well, I suggest she watches TV tonight. What does it say about the competence of Mr Cunliffe that when he was told in April 2007 that there were serious allegations regarding the head of the Immigration Service breaching the department’s own rules to benefit her family, he decided to do nothing to protect the integrity of New Zealand’s residency process?

Rt Hon HELEN CLARK: I am advised that Mr Cunliffe was advised in general terms of the issue. It was, of course, a matter for the chief executive.

John Key: What does it say about the competence of Mr Cosgrove that when he was told in December 2007 that there were serious allegations regarding the head of the Immigration Service breaching the department’s own rules to benefit her family, he also decided to do nothing to protect the integrity of New Zealand’s residency process?

Rt Hon HELEN CLARK: Mr Cosgrove was also briefed in general terms, and was told that it was an employment matter being dealt with by the chief executive.

John Key: If the public is to believe that neither Minister was fully briefed about the serious misconduct issues within the Immigration Service, what does it say about their competence that they failed to ask further questions, despite being partly briefed about matters that surely must ring alarm bells with any Minister of any competence?

Rt Hon HELEN CLARK: Ministers expect chief executives to deal with staff issues. Ministers get into trouble when they start interfering with them.

John Key: Does the Prime Minister expect New Zealanders to believe that both Ministers Cunliffe and Cosgrove knew and were briefed about the many examples of serious misconduct, including bribery, conflict of interest and theft, and that both chose to do nothing about what was going on in the New Zealand Immigration Service because, simply, it was an employment matter?

Rt Hon HELEN CLARK: The member has now broadened his question beyond Ms Thompson to wider issues within the Pacific division of the department. I can say that neither Minister was briefed about the Buddle Findlay report on that matter.

Rt Hon Winston Peters: In terms of parliamentary accountability and reporting to Parliament, what should a Minister do: take the advice of the National Party that one should not interfere with ministerial appointments or staff matters, à la Benson Pope, or that now, on immigration matters, Mr Cunliffe should do so; which of those two totally opposite positions should a Minister take?

Rt Hon HELEN CLARK: I thank the member for his question, because it points out the utter flip-flop in the attitude of the National Party on this issue. Clearly, the right advice is not to interfere in staffing matters.

John Key: Well, is the Prime Minister telling us that she expects the New Zealand public to believe that two young Ministers, looking to make their name in her Cabinet, were briefed about highly irregular actions from the head of the Immigration Service, Mary Anne Thompson, and chose to do absolutely nothing about it; and is the reason why she thinks the public should believe that the same reason they should believe her when she says that despite the head of her department—a woman who was briefing her on a daily basis—applying for a job and then withdrawing the application, she, the Prime Minister, who is known for her love of gossip, did not ask why?

Rt Hon HELEN CLARK: I have much more sense than the member when it comes to standing well apart from staffing matters.

Rt Hon Winston Peters: Did the Prime Minister take any comfort on this matter from the fact that the first prime ministerial appointment in respect of the person in question was actually made by one Jenny Shipley, when the National Party was in Government? [Interruption] I raise a point of order, Madam Speaker. There has been a tirade of comment from my right over there that could be put to rest by my explaining that when the person in question worked for me, she had been working for the department for well over a year. That of course is the truth; some members do not like it.

Madam SPEAKER: If members ask a question, they are entitled to be able to hear the reply.

Rt Hon HELEN CLARK: Indeed, I inherited Ms Thompson from Mrs Shipley, as indeed the Labour Government inherited Ms Thompson after she had been through Te PuniKōkiri under the National Government and the Treasury under the National Government, and had ended up in the Department of the Prime Minister and Cabinet.

John Key: Why, if this was an employment matter solely, are there now four inquiries under way since this matter has come into the public domain?

Rt Hon HELEN CLARK: Because the Government is tired of being blind-sided, and I state for the record—

Madam SPEAKER: If the level of noise does not come down, then we will have to have the answer in silence.

Rt Hon HELEN CLARK: The Government is tired of being blind-sided around the issues of Ms Thompson and the Immigration Service, of hearing that doubt was raised about the qualifications but that the matter was not adequately investigated, and of hearing about Buddle Findlay reports that were never brought to our attention. Indeed, as recently as this morning on the radio I had yet another allegation put that I had never heard of. That is why the Cabinet has determined that a full and independent inquiry by the Auditor-General is appropriate.

John Key: Does the Prime Minister have confidence in Phil Goff, who not only thinks that it is time for a change but who is publicly telling people on Alt TV that the Prime Minister’s leadership is “toast”?

Rt Hon HELEN CLARK: As the member is the fifth leader of the National Party I have dealt with, I would say there are rather more loyalty issues over there, including one from the person sitting next to him.

John Key: Is the Prime Minister in any way concerned that according to Phil Goff, Phil Goff is the future and the Prime Minister is the past?

Rt Hon HELEN CLARK: Given that the Labour Party has had one leader in 15 years and National has had five, I would not be raising issues of loyalty if I were Mr Key.

Gerry Brownlee: I have a document known as Ka Awatea, the flagship of Winston Peters’ time as Minister of Māori Affairs, which was authored by one Dr Mary Anne Thompson. I seek leave to table that document.

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

3. Excise Duties, Road-user Charges, Levies, and Fees—Increases

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

3. GORDON COPELAND (Independent) to the Minister of Finance: Has the Government since November 1999 increased excise duties on tobacco and alcohol, increased road-user charges, and imposed new levies or fees on electricity, gas, telecommunications, buildings, fire services, passports, and car ownership?

Hon Dr MICHAEL CULLEN (Minister of Finance) : The Government has increased some charges and reduced others. With the exception of the indexation of alcohol and tobacco excise duties, increases have reflected the costs of services provided. On the other hand, since 1999 accident compensation employers’ levies have been reduced, Government charges for conveyancing have dropped, and charges for filing company annual reports have been abolished, and statistics that were charged for in 1999 are now available for free.

Gordon Copeland: Can the Minister confirm that since November 1999 the Government has increased the accident compensation levy on petrol from 2.3c per litre to 7.33c per litre, which is an increase of 5.03c per litre, and has increased the petrol excise duty from 32.708c per litre to 42.524c per litre, which is an increase of 9.816c per litre, thereby increasing the cost of petrol by a total of 16.7c per litre once GST on those increases is added?

Hon Dr MICHAEL CULLEN: I do not question those figures. The accident compensation levies are to pay for the cost of motor vehicle accidents, and have to be provided for under the accident compensation legislation, which provides for full funding. Had those levies not increased, there would have had to be transfers out of general taxation into the accident compensation funds. In terms of the other matters that the member raised, petrol until recently was indexed. As opposed to the situation in 1999, all the excise duty on petrol, other than things like the accident compensation levy and the local government levy, goes into the land transport account to pay for roading and public transport. There is no transfer into the Crown account.

Charles Chauvel: What initiatives has the Government taken to reduce the cost of services since 1999?

Hon Dr MICHAEL CULLEN: Since 1999 the Government has taken action that has seen the charges for doctors’ visits and prescriptions drop dramatically; it has introduced 20 hours’ free early childhood education; the rates rebate scheme has been significantly enhanced to reduce the burden of rates; income-related rents have been reintroduced to reduce the cost of housing for many vulnerable families; and subsidies for nicotine replacement therapy have been introduced, making it cheaper than it was in the 1990s. The list goes on and on.

Gordon Copeland: Why, then, given that the increases in these duties, charges, levies, and fees have increased the cost of living for all New Zealanders, has the Minister never in over 8½ years seen fit to give an offsetting income tax cut to the 2.5 million taxpayers in this country who are excluded from the relief given through the Working for Families package?

Hon Dr MICHAEL CULLEN: I have good news for the member: on Thursday I will be announcing such tax cuts. I look forward to his support for them; they are consistent with the views he has expressed over many years.

Gordon Copeland: I seek leave to table a complete schedule of changes in duties, levies, and charges since November 1999.

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

4. Finance, Minister—Confidence

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

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

Rt Hon HELEN CLARK (Prime Minister) : Yes; because he is a hard-working and conscientious Minister.

John Key: Is the Prime Minister aware that the family assistance in Australia is in fact considerably more generous than Working for Families, and that therefore over the last 9 years Australians have had not only personal income taxes cut but have had family assistance well in excess of what her Government has been offering?

Rt Hon HELEN CLARK: I am absolutely delighted to see that the Australian Labor Government has introduced a working families’ support package, just like our Labour Government did here. I note of course that the National Party has at all times voted against Working for Families tax relief.

John Key: Is the Prime Minister aware—

Hon Trevor Mallard: Is that good or bad, John?

John Key: I tell the member that it is better than being 27 points behind. Is the Prime Minister aware that successive Treasurers in Australia have been progressively chipping away at personal income taxes over the same period in Government that she has had in Government, and that someone earning $80,000 in Australia has had tax cuts over the last 9 years that mean that that person is better off by $200 a week?

Rt Hon HELEN CLARK: I am aware that right-wing Governments in Australia prioritise tax cuts over other areas of spending. I am also aware that in our own country the net tax position of a single-earner family on the average wage and with two children under 12 is today under half of what it was when Labour came into office and inherited a poor situation from the National Party.

John Key: Is the Prime Minister aware that someone earning $30,000 a year in Australia has had tax cuts over the last 9 years—the same amount of time that her Government has been in office—and that that person is now better off to the tune of $75 a week; if she is aware, has she not cut taxes because she simply does not believe that New Zealanders are worthy of a tax cut under her Government?

Rt Hon HELEN CLARK: I am also aware that in Australia the pension is means tested, there is no paid parental leave from the Australian taxpayer, and there is no 20 hours’ free early childhood education, and that our Government has built up education, health care, living standards for superannuitants, and taken a much broader approach to a social wage than the National Party ever would.

John Key: Does the Prime Minister agree with her Minister of Finance that on Thursday, when he finally delivers his long-awaited personal tax cuts, they need to be passed into legislation immediately because if they are not he cannot be trusted to not take them away—the way he did last time he promised a tax cut?

Rt Hon HELEN CLARK: It is a matter of record that the Labour Government has delivered considerable tax relief to families, to people who save in superannuation schemes, and to businesses to encourage investment and growth. Every one of those tax cuts was voted against by a National Government.

5. Emissions Trading Scheme—Reports

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

5. MOANA MACKEY (Labour) to the Minister responsible for Climate Change Issues: What reports has he received on how important an emissions trading scheme is towards making progress on climate change?

Hon DAVID PARKER (Minister responsible for Climate Change Issues) : I have seen two apparently irreconcilable reports. The first is from Nick Smith and says: “The sooner we get an emissions trading system in place the sooner we can make progress on climate change.” The second is from John Key last Sunday and says: “I’m calling for a delay in the passage of this legislation.”

Moana Mackey: Who bears the cost of growing emissions if the emissions trading scheme is deferred?

Hon DAVID PARKER: It is absolutely clear that without the emissions trading scheme New Zealand’s emission will increase and the taxpayer will have to bear the additional hundreds of millions of dollars of cost. These are the same taxpayers whom National is simultaneously pretending it would help.

Hon Dr Nick Smith: Why did he welcome only 2 weeks ago the 2-year delay announced by the Prime Minister in the implementation of the emissions trading system but go “aplectic” over the weekend proposal from John Key that Parliament—

Hon Member: Go what?

Hon Dr Nick Smith: I will start again for the benefit of the Ministers. Why did the Minister welcome only 2 weeks ago the 2-year delay in the implementation of the emissions trading system announced by the Prime Minister, but go “aplectic” over the weekend proposal—[Interruption]

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. I do not know what that word means, but it could be an insult, and I would like the member to explain it to the House if he wants to carry on with that question. I am certain he knows what it means. I do not, but maybe he does.

Madam SPEAKER: Would the member please continue. Not all members always pronounce words the way others wish them to be pronounced, so please continue.

Hon Dr Nick Smith: I will reword it for the Minister: why did he welcome only 2 weeks ago the 2-year delay announced by the Prime Minister in the implementation of the emissions trading system but not welcome the weekend proposal from John Key that Parliament use this window of opportunity and take the time to get the emissions trading legislation right?

Hon DAVID PARKER: That one is easy. The reality is that the increase in the price of petrol and diesel is far more influential because of the very rapid rise we have had in petrol and diesel prices far outstripping what would be the cost of carbon through the emissions trading scheme. So the effect of delaying transport into the emissions trading scheme has very little effect on emissions during the first commitment period and does not come at great cost to the taxpayer.

Judy Turner: Has the Minister seen the April 2008 New Zealand Institute of Economic Research report, which states that the emissions trading scheme will reduce employment by 22,000 jobs in 2012, and how does this Government plan to compensate those whose jobs will be lost due to the imposition of an emissions trading scheme?

Hon DAVID PARKER: Yes, and I addressed that issue in question time last week when I noted that there is a flaw in the New Zealand Institute of Economic Research analysis. The Treasury analysis comes to a different conclusion. The main difference in the two approaches is that the New Zealand Institute of Economic Research includes an assumption that increased subsidies would increase net welfare in New Zealand, which flies in the face of the New Zealand experience and general economic theory.

Moana Mackey: What other reports has he seen about cause for a delay in the emissions trading scheme?

Hon DAVID PARKER: The Sunday Star-Times editorial last week stated: “It is vital, however, that the scheme goes ahead, and it would be extraordinarily reckless for National to pull the plug on it for merely electoral reasons. Today John Key is to give an important speech on his party’s position. This is a real test of Key’s statesmanship and of his ability to resist the reactionary rump of his own party.”

Hon Dr Nick Smith: Are not his claims yesterday that slowing the process of this legislation through Parliament would cause massive deforestation a sign of his desperation and panic, when the provision in the bill is already backdated to 1 January 2008 and the timing of the passage of the bill is irrelevant to when it actually takes effect?

Hon DAVID PARKER: Not at all. The reality is that last year there were 19,000 hectares of deforestation in New Zealand.

Hon Dr Nick Smith: Under your Government.

Hon DAVID PARKER: Correct. Without the emissions trading scheme, deforestation would return to New Zealand at similar levels to that, but rather than there being no cost to the taxpayer, as was the case last year, there would be a cost of hundreds of millions of dollars.

Jeanette Fitzsimons: Was it his intention, when the emissions trading scheme legislation was designed, that a trade-exposed industry could receive a free allocation of 90 percent of its 2005 emissions, then reduce its production to a small fraction of its 2005 output and sell its surplus credits if that was more profitable than continuing to trade at the same level; and if that was not his intention, will he remove that opportunity?

Hon DAVID PARKER: Free allocation addresses a number of issues. One of them is carbon leakage but the other is sunk investment costs. So it is not quite as simple as one not getting any allocation if one reduces one’s output. But I am sure that this is one of the issues that will be considered further at the select committee.

Rodney Hide: Given that the Earth has been getting warmer for 18,000 years, that it has been getting cooler since 1998, and that even if New Zealand shut its entire economy down, it would have no impact on the world’s climate, will the Minister consider delaying this legislation until after the election so that its effects can be considered properly; if not, why the rush?

Hon DAVID PARKER: I think that can be easily answered by saying that the world has not been getting cooler since 1998.

Judy Turner: How does he expect New Zealanders to suffer the still unquantifiable economic and social costs of the emissions trading scheme when global food demand and emissions leakage mean that this country’s agricultural emission reductions will actually lead to a global increase in agricultural emissions of more that the equivalent of 3 million tonnes of carbon dioxide; and does he agree that this is one of the many failings within the limited framework of the current emissions trading scheme legislation?

Hon DAVID PARKER: No, I do not accept those assertions. Agriculture does not come into the scheme until the start of 2013, and then it receives free allocation covering 90 percent of its 2005 emissions. In addition to that, I do not accept the proposition that there are no emission reduction opportunities in agriculture. It is true that they are limited, but they are not nonexistent.

6. Tax Cuts—2005

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6. Hon BILL ENGLISH (Deputy Leader—National) to the Minister of Finance: Does he stand by his statement, in relation to the tax cuts he announced but then cancelled: “The difficulty we’ve had obviously with the 2005 announcement is that we didn’t legislate” and that “Other priorities took charge after that”?

Hon Dr MICHAEL CULLEN (Minister of Finance) : Yes.

Hon Bill English: Can the Minister therefore confirm that he is planning to legislate Budget tax cuts this year because the public do not trust him to keep any promise on tax cuts; and, worse than that, that it is clear from those comments that he does not trust himself to keep a promised tax cut, unless there is a law against his breaking that promise?

Hon Dr MICHAEL CULLEN: One of the differences is that at least I can go 24 hours with the same promise, unlike the member’s leader, who gave three different promises within 24 hours on tax cuts.

Hon Paul Swain: Did he promise during the 2005 election to deliver tax cuts; if so, were they delivered?

Hon Dr MICHAEL CULLEN: Yes. We promised tax cuts for families worth some $500 million. These were delivered as promised, and opposed by National. We have also delivered tax cuts to business and tax cuts to savers. Every one of those tax cuts was opposed by National. I look forward to, on Thursday evening, the National Party opposing tax cuts again and again.

Hon Bill English: If the Minister believes that he can go 24 hours without changing his promise, will that period be long enough to have the legislation passed to make sure that he does not break it 36 hours later?

Hon Dr MICHAEL CULLEN: I would love to promise that we could pass the legislation in 24 hours. Of course, if for once National members actually vote for what they support—that is, tax cuts—the legislation could be passed within a matter of minutes.

Hon Bill English: Can the Minister confirm that he cancelled the tax cuts promised in the 2005 election campaign because he needed the money to pay for the expensive promises that had been made during that election campaign, and does that not mean that the public is right to believe that it is highly likely that he will do it again—make expensive promises during the campaign, and cancel tax cuts afterwards if he is re-elected?

Hon Dr MICHAEL CULLEN: I thank the member for his confidence that the current Government will be re-elected. I will refer that to my colleague Mr Goff.

Hon Bill English: Does the Minister think Mr Goff will change his mind?

Hon Dr MICHAEL CULLEN: I do not think Mr Goff has ever changed my mind, but we tend to be of the same mind on most issues, so it is not a problem.

7. Cancer, Cervical—Protection

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7. LESLEY SOPER (Labour) to the Associate Minister of Health: What steps has the Government taken to increase protection for women from the risk of cervical cancer?

Hon STEVE CHADWICK (Associate Minister of Health) : Recently the Prime Minister, along with David Cunliffe and I, announced a major immunisation programme to fight cervical cancer. Over the next 5 years the human papillomavirus—HPV—immunisation programme will be offered free to more than 300,000 young women aged 12 to 18 years and over. Trials have shown that this vaccine is highly effective against the most common causes of cervical cancer—two types of the human papillomavirus.

Lesley Soper: What is the Government committing in Budget 2008 to the human papillomavirus immunisation campaign?

Hon STEVE CHADWICK: The Labour-led Government is committing around $164 million in new funding to this immunisation programme. It is expected to save around 30 lives every year. We also expect to see a reduction in the number of abnormal smear results. Although the National Cervical Screening Programme has been a huge success, screening alone can never prevent all cancers. The human papillomavirus vaccine is another prevention strategy that along with screening can reduce the burden of this disease even further.

Barbara Stewart: What steps has the Government taken to increase protection for men from the risk of prostate cancer, considering that the number of deaths annually from this type of cancer is now greater than the annual New Zealand road toll?

Hon STEVE CHADWICK: When we have access to good new technologies that are cost effective and have proven benefits then we should use them. To date, the expert clinical advice is that technology is not effective enough to support a prostate cancer screening programme. However, if men are concerned about their health they should talk to their family doctor or nurse.

Lesley Soper: What responses has the Associate Minister received to the launch of the human papillomavirus immunisation initiative?

Hon STEVE CHADWICK: The Cancer Society has welcomed the initiative, saying that it will not only ensure equitable access to the vaccine but it will mean that those women who are at increased risk of developing and dying from cervical cancer can be immunised. Although I hear that the National Party is in favour of women these days, I note that we are yet to hear whether it would continue to fund this programme.

8. Immigration Service—Oughton Report

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8. Dr the Hon LOCKWOOD SMITH (National—Rodney) to the Minister of Immigration: Does he stand by his statement to the House on Thursday, 15 May 2008 that he could not release the Oughton Report because it related to individual employee matters?

Hon Dr MICHAEL CULLEN (Leader of the House) on behalf of the Minister of Immigration: The Minister of Immigration stands by what he did say to the House on 15 May 2008, which was that he had been advised by the chief executive that the Oughton report pertained to matters involving individual employees. That is why he was not given the Oughton report, and why he could not instruct the chief executive to release the report.

Dr the Hon Lockwood Smith: Is it correct that David Oughton’s report of 27 July 2007 identified three issues that he believed required further consideration, the first of which related to applicants for residence who met all the requirements of Government policy, but for whom residence permits were not available because of the unlawful decisions surrounding Mary Anne Thompson’s family, and said: “These people need to have their applications considered for special treatment …”, which is something within the power of the Minister only; if that is correct, what action did the Minister take on being briefed on that first recommendation of the Oughton report?

Hon Dr MICHAEL CULLEN: I am advised that the then Minister was not briefed about those matters in the Oughton report.

Taito Phillip Field: Can the Minister enlighten this House as to whether exception to immigration policy by way of ministerial discretion is the only way that a decision can vary from New Zealand immigration policy or law, or is that power also given to immigration officials?

Hon Dr MICHAEL CULLEN: That is my understanding of the law.

Dr the Hon Lockwood Smith: Is it correct that the third of Dr Oughton’s three recommendations was that “If … the decisions that have been taken are outside policy or delegations then the matter is more serious. The actual situation can only be determined by an in depth examination by experienced personnel”; if so, what action did the Minister of Immigration take to ensure that Government policy was being implemented in his department, when the Minister was briefed on that third recommendation by David Oughton?

Hon Dr MICHAEL CULLEN: I am advised that those matters were not raised directly with the Minister. One of the reasons why the Government has asked the Controller and Auditor-General to undertake a full inquiry is that there is, clearly, dissatisfaction with a number of these matters, and we wish to get to the bottom of them.

Taito Phillip Field: Given the Minister’s answer in regard to the powers of a Minister to vary a decision from policy, how can the Government continue to say that this matter is only an employment matter, when, in fact, the power under the law is afforded only to the Minister of Immigration, yet over these matters it has been exercised by immigration officials?

Hon Dr MICHAEL CULLEN: I am advised that although the law states that those matters are matters of ministerial discretion, as in a number of pieces of legislation such ministerial discretion is able to be delegated. Indeed, the Minister of Finance delegates a range of matters to officials.

Dr the Hon Lockwood Smith: When the Minister of Immigration told Radio New Zealand this morning that “Ministers are reliant at the end of the day on their chief executives, and it’s plain we were not briefed on particular issues.”, was he expecting Parliament to believe that when the then Secretary of Labour, James Buwalda, first briefed David Cunliffe in April last year, when the acting chief executive, Graham Fortune, briefed David Cunliffe, again, on receipt of the final Oughton report in July last year, and when he himself was briefed by the new Secretary of Labour, Chris Blake, in December last year, all three chief executives incorrectly advised Ministers that the Oughton inquiry covered only individual employee matters?

Hon Dr MICHAEL CULLEN: To correct one statement, my understanding is that the briefing from Mr Fortune was in August, not in July. But I am advised that the briefings were of a general nature, and, indeed, of course, the incoming chief executive who briefed Mr Cosgrove had a great deal to get on top of before being able to advise the Minister. It is one of the reasons why we are having a fully—fully—independent inquiry. Nobody could possibly pretend the Auditor-General is somehow or other in the Labour Party’s pocket.

Dr the Hon Lockwood Smith: Why, when first asked by the media about the Oughton inquiry, did the Minister of Immigration refuse to comment, stating that it was simply an “operational matter”; then, when the report was released, claim that it covered employment matters; then, following public concern over the report, accept that there were wider issues requiring a wider State Services Commission inquiry; and why does he now accept that there is a need to bring in the Auditor-General, when he and his predecessor, David Cunliffe, following briefings from three separate chief executives, were happy to sit on the matter and do nothing?

Hon Dr MICHAEL CULLEN: As I have already said, the Oughton report was not made available to either of the two Ministers—neither Mr Cunliffe nor Mr Cosgrove—but they were assured that these were employment matters and had been settled. The incoming chief executive sought to reopen—

Dr the Hon Lockwood Smith: Three separate secretaries were wrong!

Hon Dr MICHAEL CULLEN: Just because the member’s rolled Nick Smith does not mean he has to take me on as well! The incoming chief executive tried to reopen the employment matters issue, and was advised that there was no legal basis to do so. Subsequent to the release of the report and to other matters being raised within the media, a series of other inquiries have been undertaken. The Auditor-General’s inquiry will be a comprehensive and independent inquiry, and the Government wishes to see that inquiry completed as quickly as possible. But it is a matter for the Auditor-General what the terms of reference are, who is questioned, and how long the inquiry takes; he is totally independent.

Taito Phillip Field: Supplementary question—

Madam SPEAKER: Sorry, you have no supplementary questions left.

Dr the Hon Lockwood Smith: Can the Minister absolutely assure the House that no reference to issues of conflict of interest regarding Mary Anne Thompson and her senior staff, or to issues of misconduct and corruption in the Pacific division, was withheld from the publicly released briefing to the incoming Minister dated 31 October 2007; if so, will the Minister table that briefing in its entirety?

Hon Dr MICHAEL CULLEN: I have no information in front of me in respect of that, at all. I am sorry but I cannot answer the member’s question.

9. Accident Compensation Corporation—Human Rights Review Tribunal Ruling

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9. Hon TARIANA TURIA (Co-Leader—Māori Party) to the Associate Minister of Justice: Does she agree with Chief Human Rights Commissioner, Rosslyn Noonan, that the recent Human Rights Review Tribunal ruling on ACC is “a landmark in human rights law in that it shows how any New Zealander can challenge legislation they believe to be discriminatory and impacts upon them adversely”; if so, what action will she be taking with relevant Ministers to advise them of this landmark ruling?

Hon LIANNE DALZIEL (Associate Minister of Justice) : Yes, the Minister for ACC is already aware of the decision of the Human Rights Review Tribunal and has legislation in front of the House that addresses the issue of access to vocational rehabilitation.

Hon Tariana Turia: Is the Minister aware that the Child Poverty Action Group has initiated legal proceedings regarding the Government’s in-work tax credit, claiming the policy is discriminatory on the basis of parental work status, and does she believe that more work should be done to advise Ministers how to remove discriminatory effects from their policies?

Hon LIANNE DALZIEL: Yes, I am aware that proceedings have been filed, which means it would be inappropriate for me to comment.

Hon Tariana Turia: What impact does the Minister think the ongoing human rights proceedings concerning the discrimination in Government policies such as the in-work payment and the in-work tax credit have on the credibility of that scheme in the Government’s work programme?

Hon LIANNE DALZIEL: That is the matter that is still the subject of proceedings, and therefore it would be inappropriate to make a determination as to whether that is in fact the case. If it is in relation to the matter that was determined in the case in the substantive question, the matter is being addressed by Parliament. There is a bill in front of the select committee right now.

Hon Tariana Turia: Is the Minister aware that the Human Rights Commission has received complaints in relation to the spelling of Wanganui, prompting the Race Relations Commissioner, Joris de Bres, to conclude that “revisiting the names and spelling of place names and the correct use of te reo Maori is part of an ongoing process of negotiation and reconciliation between Maori, government, and non-Maori community members”, and what advice will she be providing to the Wanganui District Council in light of this finding?

Hon LIANNE DALZIEL: No, I was not aware that the Race Relations Commissioner had made that announcement.

10. Emissions Trading Scheme—Economic Effects

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

10. Hon Dr NICK SMITH (National—Nelson) to the Minister responsible for Climate Change Issues: Does he stand by his statement in the House last Thursday that “the emissions trading scheme does not create any cost for the economy”?

Hon DAVID PARKER (Minister responsible for Climate Change Issues) : Yes. As I went on to say, and as I have said on many occasions, the emissions trading scheme minimises the cost of New Zealand meeting its obligations under the Kyoto Protocol. That cost arises from the need to reduce emissions. Our share of the global cost is set by the Kyoto Protocol, which National agrees with, and the emissions trading scheme is a mechanism that both reduces that cost and distributes it fairly rather than both increasing the cost and leaving the whole cost with taxpayers.

Hon Dr Nick Smith: Does he agree with the analysis by his officials that the Government would receive a windfall gain of at least $7 billion and up to $21 billion from the sale of emission permits, and in stating there is no cost to the economy in that, has he become a recent convert to the Social Credit movement?

Hon DAVID PARKER: This is, for those who want to inquire into it, yet another billion-dollar bungle by Dr Smith. The advice of officials to the select committee is not as he characterises it. There is no great surplus to the Government, and there is no windfall to the Government.

Hon Dr Nick Smith: Is the Minister telling Parliament that there are no windfall profits for the Government from the emissions trading scheme in the first commitment period to 2012?

Hon DAVID PARKER: Yes. Indeed, I think that is abundantly clear from the revised net position report that was tabled in Parliament last week, which shows that even with the emissions trading scheme there is a deficit for the Government.

Jeanette Fitzsimons: Does the Minister support the view expressed by many submitters to the committee, and by some other political parties, that we can fix climate change with an emissions trading scheme where no one has to pay anything—or, at least, not them—and where all business and personal behaviour continues exactly as before; and if that were true, why would we need a price on carbon at all?

Hon DAVID PARKER: That question really does cut to the nub of the matter—it really does. One cannot change behaviour through prices without changing the prices. Of course, the intention is to create an incentive to reduce emissions and discourage increases in emissions.

Hon Dr Nick Smith: Why did the Minister just tell the House that there were no windfall profits from the emissions trading scheme, when the emissions trading scheme Cabinet paper states: “The increased revenues for Government associated with the increased costs of electricity will give windfall profits to the Government of an estimated $450 million to 2012.”; and is it not time for the Minister to be honest with the public about the fact that this scheme is designed to profit the Government by many millions of dollars, at the expense of homeowners and businesses?

Hon DAVID PARKER: It is true than an increase in electricity price results in additional revenue to electricity companies, some of which flows to the Government. We have never hidden that; that is one of the issues that lies behind considerations of what needs to be done in terms of compensation for those vulnerable people who pay electricity bills. But that is no excuse for the member’s party to back away from the truism that he previously expressed, which was “The sooner we get an emissions trading scheme in place, the sooner we can make progress on climate change.”

Hon Dr Michael Cullen: Can the Minister confirm that the State-owned enterprises that are anticipating increased profits have already planned to use those increased profits as part of their investment programme in renewal energy production, and that without that increased investment there is not the slightest prospect of meeting our targets?

Hon DAVID PARKER: It is true that one of the sources of emissions in New Zealand is from electricity that uses thermal generation. In order to reverse the trend we have to build more renewables, as we are doing this year. In order to build renewables we have to spend money, and that money from State-owned enterprises comes from the revenues that they collect from people who buy electricity from them.

Peter Brown: Noting the earlier answer to Dr Smith about a change of prices, what does the Minister expect will change as a result of imposing an emissions trading tax on New Zealand ships but letting foreign ships off scot-free?

Hon DAVID PARKER: The issue there is whether there would be some competitive disadvantage for New Zealand - based ships facing a cost of carbon on their fuels, compared with foreign-based ships that might have picked up their fuel overseas. That, of course, is one of the issues that will be considered by the Minister of Transport in respect of the support for coastal shipping, which of course is part of our transport strategy.

Hon Dr Nick Smith: How can the Minister—[Interruption] Settle down, Winston. How can the Minister pretend that he is being upfront with New Zealanders about the cost of the emissions trading scheme, when only today he has denied in the House that there are windfall profits for the Government in the emissions trading scheme—a point reinforced by the Minister of Finance—and when the Cabinet paper states: “Estimates of the windfall profits that are likely to be received by the SOEs are in the order of $150 million per year.”?

Hon DAVID PARKER: I have already addressed the substance of that question, and I would note that some of the figures that the member bandies about are just incredible. He was, just a couple of weeks ago, suggesting that the surplus to the Government was between $13 billion and $24 billion. That is just being in cloud-cuckoo-land.

Hon Dr Nick Smith: I have the official estimates here from the Government on the surplus, which use those exact figures. They show that the surplus ranges from a maximum of $22 billion. I seek leave—

Madam SPEAKER: Is the member seeking to table this document, or not?

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

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

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. With respect, that is not a way someone should seek leave to table a document—making a short speech with no reference to it whatsoever. You asked the member whether he was seeking leave to table the document, and he said “Yes.” That is not the way he should be allowed to conduct business in this Parliament.

Madam SPEAKER: I perfectly understand what is happening. People are using points of order to table documents in order to make extra speeches. That is not what is intended in the Standing Orders. So I just remind members that of course they have a right to know what the document is that is being tabled, but the strategy of giving a long explanation and then saying “I table it.” is not appropriate. As I said, when members are tabling documents they should seek leave, give the purpose for the leave, and then identify the document they wish to table so that other members can make an informed judgment on whether they should accept that. That is my understanding of what the Standing Orders and Speakers’ rulings say, and that is what I will be applying.

Gerry Brownlee: I raise a point of order, Madam Speaker. We are delighted to have that clarification of a ruling from you today, because for a long period members have noted that if they used the words “I wish to seek leave”, the leave was put before there was any explanation of what the document was.

Madam SPEAKER: No, that is not true, actually. I went through Hansard, because I know that that has been the feeling of members of the Opposition. The trouble is that members give long speeches and use the point of order as a mechanism for a point of debate. All members in this House must in fact succinctly identify the document that they wish to have tabled in the House. If they do that, they will certainly be able to do it without any intervention from the Speaker.

Hon Dr Nick Smith: I am in a difficult position, in that the Minister responsible for Climate Change Issues has challenged the correctness of the figures I have used. So, again, I seek leave to table the report of the Emissions Trading Group on its advice on the flow of revenue to the Government under the emissions trading scheme.

Madam SPEAKER: Was that a point of order?

Hon Dr Nick Smith: I sought leave.

Madam SPEAKER: The member is seeking leave. Is there any objection? There is objection.

Hon DAVID PARKER: I seek leave to table Dr Smith’s press release that states “The sooner we get an emissions trading scheme in place, the sooner—

 Leave granted.

Hon Dr Nick Smith: I seek leave to table Cabinet paper No. 58907, which shows that the expected windfall profits to the Government from the State-owned enterprises are $150 million per year.

 Leave granted.


11. Racing Industry—Funding

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

11. SUE BRADFORD (Green) to the Minister for Racing: Why is the Government putting $9 million into high-stakes racing in this week’s Budget, given that in 2006 the racing industry received a tax windfall worth approximately $32 million a year?

Rt Hon WINSTON PETERS (Minister for Racing) : As my friend Mr Maharey said, it is all good news. [Interruption] Oh, the foreign affairs budget is great as well. [Interruption] Well, it has actually doubled in 5 years—we do not lose our debates like that member used to. The answer, Madam Speaker, is because this initiative will return New Zealand to the forefront of international racing. It will help attract world-class overseas competitors, enhance breeding values and export sales, and revive public interest in racing. The net result will be a fairer but greater fiscal dividend to the Government. The matter about which the member spoke in terms of the 2-year-old change to the taxation regime has seen this outcome: overall, premier sales at Karaka this year were up by 36 percent, by $111 million; select sales were up as well, by 33 percent; and the festival sales were up by a massive 81 percent. That is a return in dividends to the Government, as well.

Sue Bradford: What makes the Minister think that gifting taxpayer money to prestige racing stakes should be a priority, when according to a New Zealand Racing Board press release on 15 April this year the board currently has an operating surplus of $75 million and net assets of over $115 million?

Rt Hon WINSTON PETERS: Because anyone who knows about racing knows that the board has to have certain reserves and a contingency reserve for certain events. The board has always had itself in a reserve situation, so that at any given time the racing establishment, for capital development or for fighting a potential outbreak of equine flu if it were to happen in this country, would be in a position to handle it. That is why we have had that, which is nothing new. But what is new, of course, is a fairer tax regime, some confidence in the industry, and some enlightened policy that will see a massive return for this country in the immediate, short-term, and long-term future.

R Doug Woolerton: What has been the economic impact on the racing industry since the changes initiated in Budget 2006?

Rt Hon WINSTON PETERS: As I said, we have received reports of an economic impact that has seen some massive changes. I have just given the House, for example, the Karaka sales results, which are of premier, select, and festival sales, and they are up a staggering percentage from what they were just a year ago. We also might note that as a consequence of having confidence in this country’s racing industry, we have won nearly every decent race in Australia in the last 6 months.

Sue Bradford: Why does the Minister not do something about ensuring that the New Zealand Racing Board’s extensive reserves—or at least some of them—are released to enable clubs like Avondale and other struggling clubs to upgrade and maintain their infrastructure, rather than see it as a priority to put badly needed taxpayer money into races that he calls the crème de la crème of New Zealand racing?

Rt Hon WINSTON PETERS: The reality is that the New Zealand racing industry is built on the provinces. That is why we have, for example, a safety fund, and it is why so many breeders and people associated with racing in the provinces of New Zealand, from whence these horses come, are so keen on this idea. For example, the biggest race in New Zealand is a co-sponsorship race in the Hawke’s Bay sponsored by Sam Kelt; its stake is $2.2 million. The reality is that with some co-sponsorship we can put ourselves back on the radar screen and have a better environment in which to sell our horses, and that the Government in the long term will be the big winner.

Ron Mark: Has the Minister received any reports regarding the industry’s reaction to his latest announcements?

Rt Hon WINSTON PETERS: All I can say is that the industry has been overwhelmingly positive. I want to make the point to some members here, who do not seem to understand this industry, that there are thousands of young people—teenagers—who get up in the morning at 4 o’clock, go out to the stables, and do the business because they are keen on this sort of employment. Because of the change in the racing industry’s economic environment, they are today better rewarded. We will see young jockeys and apprentices stay in New Zealand because there is more opportunity as a consequence of a very enlightened policy—so enlightened that the National Party thought it would steal it 2 days before the last election.

Sue Bradford: Will the Minister turn his attention to the way in which over $20 million a year of pokie money is being diverted away from some of our poorest communities, in places like South Auckland, and into some of our richest, like racing owners and trainers, and will he advise his colleague the Minister of Internal Affairs that racing stakes should be removed as a legitimate purpose for the distribution of pokie profits?

Rt Hon WINSTON PETERS: That is a matter for the Minister of Internal Affairs, but I will just say that under the Gambling Act racing is an authorised purpose and has been for a long, long time. I make one point to some of the people lining up on that issue: I personally do not see why someone who never goes near a pokie machine but has some highfalutin, self-dreamt-up public scheme should have more access to this money than the people who do go near pokie machines and are supporters of races. It comes down to fairness and equity. Of all the hundreds of millions of dollars that are picked up in racing, that is a very small amount to promote an industry that could be—and, in a short time, will be—a significant exporter of horses from this country.

12. Unemployment—Reports

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

12. JUDITH COLLINS (National—Clevedon) to the Minister for Social Development and Employment: Does she still stand by her statement, in relation to the largest quarterly decline in employment in 19 years, “Ah well, 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, an unemployment rate of under 4 percent for 15 straight quarters, the third-lowest unemployment rate ever recorded in household labour force survey history, and 140,000 fewer people on benefits, as being bad news.

Judith Collins: Has the Minister told the 138 meatworkers in Dunedin who lost their jobs yesterday that “this is [not] bad news at all actually”, “there’s a bit of an up and down”, and that she does not expect people to “overreact”; if she does not expect people to overreact to losing their jobs, then how should they react?

Hon RUTH DYSON: I have not personally told them that, but I am sure they are aware of the economic situation. I understand that redundancies are difficult not just for the individual workers but also for their families and their communities. I would like to quote the chief executive of the Otago chamber of commerce, who said “one thing we know is that those who have been made redundant in other areas have found work relatively quickly”. Skilled staff are being made redundant in an area where there are vacancies for skilled workers, and I am ensuring that our Government agencies are available to help the redundant workers make that transition.

Hon Mark Gosche: How does the Government support those affected by redundancy announcements?

Hon RUTH DYSON: As I have said, we do accept that redundancies are very difficult for workers, their families, and their communities. The help that is offered by Government agencies includes literally searching for work; preparing a CV and practising for interviews; examining individual workers’ skills, assessing their options, and retraining them if required; and meeting accommodation, childcare, and other costs throughout the transition. With support from the Government, their employer, and their union, many workers have successfully transitioned into new jobs.

Judith Collins: Has she told the 300 Sealord employees in Nelson who are also expected to lose their jobs that this is “not bad news at all actually”, that they are not to overreact, and that this is just figures jumping around; and whilst to her it might just be figures jumping around, does she not know that this is actually about real people losing real jobs?

Hon RUTH DYSON: Yes, I do. I will continue to ensure that Government departments and agencies give every support possible to ensure that those skilled workers are transitioned into new jobs where their skills can be used.

Rt Hon Winston Peters: Has the Minister received any reports of public bodies or political parties advocating making a change to the Reserve Bank of New Zealand Act so that we do not go on having a horribly inflated currency, which is so damaging to exporters, or are we just hearing crocodile tears in this House once more again today?

Hon RUTH DYSON: I am aware of that member’s consistent advocacy for making changes in the Reserve Bank of New Zealand Act and I am certainly aware, as member in this House is aware, of the crocodile tears of Judith Collins, who asked the primary question.

Judith Collins: I raise a point of order, Madam Speaker. I take offence at that statement, and I would ask you to ask that Minister to withdraw and apologise.

Madam SPEAKER: The member has taken offence. Will the Minister please withdraw and apologise.

Hon RUTH DYSON: I withdraw and apologise.

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. Surely we do not have members in this House who are so lily-livered that they object to being accused of shedding crocodile tears. If we go along with that sort of request, most unreasonable as it is, given the behaviour of that member and other members on her side of the Chamber, then we will turn this place into a docile, saccharine farce. I think a number of us are against that, even those members in the National Party as well.

Judith Collins: It is highly offensive to say about people who have lost their jobs that when members on this side of the House raise it, they are simply shedding crocodile tears. These are real people, real jobs, and real families.

Hon Dr Michael Cullen: Given that the party opposite increased the tax on redundancies in the 1990s and this Government has reduced it, I think “crocodile tears” is a perfectly appropriate phrase.

Madam SPEAKER: Everyone has had his or her say. The Speaker intervenes if phrases do cause disorder in the House, but as members know, if some members do take offence at comments made they may ask for them to be withdrawn and apologised for. That is what has happened in this instance.

Judith Collins: Does she stand by her statement in the House last week that a fall of 29,000 in the number of people employed was not about job losses; if so, how does she explain the loss of 11,000 jobs in the construction industry and 6,000 jobs in the manufacturing industry in the past year alone, and if these are not job losses, then what are they?

Hon RUTH DYSON: As I endeavoured to explain to the member last week, the household labour force figures were not a reduction in the number of jobs in the New Zealand economy, they were a reduction in the number of people who were in paid employment, and had those people been looking for work, or registered as unemployed, then those figures would have reported that. They did not. Overall, the decrease in jobs in that quarter is nearly exactly the same as the increase in those jobs in the previous quarter, and therefore that sort of volatility in quarterly surveys should be treated with caution.

Judith Collins: Is she still saying that there have not been significant job losses in the construction industry; if so, can she explain why she does not consider as significant the loss of 11,000 jobs?

Hon RUTH DYSON: I advise the member again to look at all those figures within the overall context, and then she might reflect on the fact that approaching quarterly trends with caution is appropriate.

Hon Jim Anderton: Has the Minister received any reports that the last time the National Party came from Opposition into Government it promised to halve unemployment and doubled it, and at the same time, has she received reports on the number of jobs that this Government has created since it was elected in 1999?

Hon RUTH DYSON: Yes, I certainly can. Despite the calls and barrage of abuse from the Opposition, the public record will show that unemployment did double during the 1990s and exactly the reverse has happened since 1999.

Judith Collins: I seek leave to table “More than 300 jobs go at mussel factory”—an article today.

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

Judith Collins: I seek leave to table “PPCS halfway there as 138 jobs go”.

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

ENDS

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