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Questions And Answers – Tuesday, 1 June 2008

Questions And Answers – Tuesday, 1 June 2008

1. Toll Holdings—Rail and Ferry Purchase

1. JOHN KEY (Leader of the Opposition) to the Minister of Finance: What is the full and final cost of the Government’s purchase of Toll NZ Ltd’s rail and ferry business?

Hon Dr MICHAEL CULLEN (Minister of Finance) : The total purchase price, including transitional arrangements, is $690 million, as appropriated in Budget 2008. As is usual, the purchase of a company involves taking over existing debt, which in this case will be around $140 million. This includes an additional $18 million debt that has enabled the Government to obtain full ownership of all the buildings and to charge land and building rents at market rates from day one, and to move to commercial rates for freight forwarding.

John Key: What is the Government’s best estimate of the cost of purchasing or upgrading rolling stock that taxpayers will now have to fund?

Hon Dr MICHAEL CULLEN: As I indicated this morning, a steady-state case—in other words, no improvement in business—would involve roughly $80 million over the next 5 years. I will be taking a paper to Cabinet in a few weeks’ time, probably at the end of this month, with a longer-term, more aggressive investment programme. Of course, Toll was looking for some form of subsidisation of any investment that it might undertake into rolling stock in any case, had it retained ownership. It needs to be remembered that the youngest locomotives in the fleet are already something like 20-odd years old.

Hon Mark Gosche: What reports has he seen on New Zealanders who support the buy-back of the rail system?

Hon Dr MICHAEL CULLEN: It is clear that most New Zealanders have responded with enthusiasm to the buy-back of the rail system. They know it is a vital system in terms of our future and that only Government ownership will guarantee the investment we need. Some have mocked this as misplaced nostalgia for the glory days of rail. With oil at US$140 a barrel, I thought perhaps even Mr Key had caught up with the fact that life had changed.

Rt Hon Winston Peters: Can the Minister confirm that such a buy-back would have been obviated had National not, on 20 July 1993, sold New Zealand Rail not for $400 million but $328 million, and given it carried a $30 million debt; that they were the recipients of a promise of $200 million of capital development by the buyers—Fay Richwhite and Wisconsin Central Transportation—that did not happen, and that ended up, after recapitalisation, driving the shareholdership down from $9 - plus to, at its lowest, 28c; and is this a case of gall or amnesia, or both, that such a question could be asked by National today?

Hon Dr MICHAEL CULLEN: To be fair I think Mr Key was on his overseas experience at that particular point in time, but in fact it was worth noting that this morning the Rt Hon Jim Bolger, the new chair of KiwiRail, did state very clearly in his speech there had been gross under-investment in rail over recent years by the private owners and there was a need to catch up in that regard.

John Key: If the Minister of Finance thinks the National Government is to blame and got the decision wrong and lacked the business acumen when it sold Rail in 1993, why has it reappointed the person who was Prime Minister at that time, to run the new rail service?

Hon Dr MICHAEL CULLEN: Some of us are capable of learning from our mistakes. The member makes his so quickly in response to questions, as he did this morning with the media, he has not time to learn from them.

Rt Hon Winston Peters: Can the Minister confirm that in 1993 the Booz Allen report stated that railways was in that year making a profit of $36 million; that it was forecast in 1994, 1 year later, to make $100 million profit, at which point National sold it off to its mates, and it did not go to the market, just directly to its mates on that fateful day, 20 July—

Hon Member: Dreadful!

Rt Hon Winston Peters: It is daylight robbery. It is dreadful. It is awful, and that member is the kind of sucker who goes for it.

Madam SPEAKER: Will the member just ask his question.

Rt Hon Winston Peters: That being the case, can the Minister please describe to this House why on earth he would put in charge someone who made that sale—namely, Jim Bolger—for the same reason that Labour put him in charge of KiwiBank, even though he sold the New Zealand bank, the BNZ?

Hon Dr MICHAEL CULLEN: What I can say is the Rt Hon Jim Bolger has proved to be a very successful chairman of State-owned enterprise boards, and New Zealand Post and KiwiBank have been highly successful. I have every confidence he will achieve the same success for KiwiRail.

John Key: What is the Government’s best estimate of the cost of upgrading the national rail network over the next 5 years?

Hon Dr MICHAEL CULLEN: I do not have that figure in front of me. I know that ONTRACK has put out a figure of a $460 million investment over the coming period of years. That investment, of course, would be required whether or not the Government bought the rolling stock operation.

Rt Hon Winston Peters: Can the Minister give us any reports that he may have received as to the costs to New Zealand of having sold New Zealand Rail back in July 1993, not in an open market, any tenderer situation, but exclusively to the then National Government’s mates, in this case Fay Richwhite, and could he quantify what we may have lost as a consequence of that, given that within 3 weeks the sharemarket showed an uplift of $188 million when the world markets heard about the value of New Zealand Rail after the buy-out?

Hon Dr MICHAEL CULLEN: I do not have reports that enable me to quantify those numbers, but clearly New Zealand Rail was sold for far less than its value at the time. Equally clearly what was demonstrated by the success of New Zealand Rail previously, and its subsequent history, is that State-owned enterprises are perfectly capable of being run as successful, commercial enterprises. Private sector businesses in the infrastructure area do not always invest sufficiently in that infrastructure.

John Key: Can Dr Cullen confirm that the reason the trains were painted red is so that they can be a constant reminder to the taxpayers of New Zealand that that is the colour of the ink that will be flowing through the books, post this purchase?

Hon Dr MICHAEL CULLEN: If the member is so opposed, why does he not come straight out and say that if National is elected it will sell KiwiRail? I ask John to say—to have the courage, to get the bottle, and to come out with it—that he is opposed to State ownership of the rail system.

Hon Jim Anderton: Has the Minister received any reports about parties in this House that predicted the failure of the Kiwibank and how much money that would lose for the people of New Zealand; and is there any report at the moment on parties in this House that are saying similar things about New Zealand rail, and what is the likelihood that they are right on this?

Hon Dr MICHAEL CULLEN: We were assured by Mr Key and his associates that Kiwibank would be a failure; it has succeeded. We were assured that KiwiSaver would be a dud; it has succeeded enormously well. National members are telling us that KiwiRail will be a failure, and I am sure within at least 3 months Mr Key will be claiming full credit for the success of the takeover.

John Key: Does the Minister of Finance accept that the Government has paid far too much for the assets of KiwiRail, and in fact the happiest people today are not the taxpayers of New Zealand but the shareholders of Toll Holdings?

Hon Dr MICHAEL CULLEN: Toll certainly needs to cash up—there is no question about that particular fact of life; there is no question the Government has paid a premium price. But the alternative is continuing to subsidise a foreign-owned company failing to invest sufficiently in basic infrastructure, increased expenditure required on roading, increased accidents on the roads, and increased greenhouse gas emissions at a direct cost to the taxpayer. Which part of all of that does Mr Key not understand in his desperate desire to ensure that his mates in Merrill Lynch and elsewhere can make millions out of privatisation?

Rodney Hide: If it is correct that rail was sold, according to Mr Peters, for $328 million, and it was then run into the ground with no investment, how on earth has the taxpayer been hit with a $690 million cost to buy it back, plus $140 million in debt; or did this Minister get suckered?

Hon Dr MICHAEL CULLEN: Having made the most profitable purchase according to the accountants of New Zealand history in one area, certainly not. I think we bought the track for $1 and it is now valued at $10.5 billion.

/NR/rdonlyres/0E822A32-99EB-4C64-A18A-A3AB58774FCB/86161/48HansQ_20080701_00000040_.pdfFull transcript of Questions for Oral Answer for Tuesday, 01 July 2008 [PDF 194k]

2. Rail—Reports

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

2. CHARLES CHAUVEL (Labour) to the Minister of Finance: What reports has he received on the Government’s plan to revitalise New Zealand’s rail system?

Hon Dr MICHAEL CULLEN (Minister of Finance) : Today, 15 years after New Zealand’s rail system was sold off, it is back in the hands of New Zealanders. The rail assets of Toll NZ have been transferred to the Government, and will be managed by a transition board headed by a former Prime Minister, the Rt Hon Jim Bolger. The organisation is now called KiwiRail.

Charles Chauvel: What reports has the Minister received on the benefits of a strong rail system?

Hon Dr MICHAEL CULLEN: At a time of rising concern over climate change and the huge increases in the price of petrol, it is clear that rail has a big role to play in the future of our transport system. The fuel efficiency of diesel-powered trains is four times better than that of road transport used to carry the same load; electric trains, when they can be used for freight, are 10 times more fuel efficient. With the price of oil passing US$140 a barrel recently, I think all members of the House know that it is time that something must be done to make the transport system more efficient—particularly, more environmentally efficient.

Charles Chauvel: What reports has the Minister received on opposition to Government ownership of New Zealand’s rail system?

Hon Dr MICHAEL CULLEN: I have seen reports that suggest that the Government purchase of the rail track was a bad idea; then, later, that it was always “a pretty sound idea”; that Government ownership of the rail network is “a dumb idea”; that rail is not at all superior to bus transport; that the Government should not be buying the rail network; and that any future Government should wait 3 years before selling it off. All of that collection of confusing reports comes from Mr John Key, who must have thought he was being push-polled at the time he was being asked those questions.

/NR/rdonlyres/FA312B5C-4885-42BE-8A7E-4CB1A61995C7/86163/48HansQ_20080701_00000162_.pdfFull transcript of Questions for Oral Answer for Tuesday, 01 July 2008 [PDF 194k]

3. Climate Change (Emissions Trading and Renewable Preference) Bill—Changes

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

3. Hon BILL ENGLISH (Deputy Leader—National) to the Minister responsible for Climate Change Issues: What changes does he propose to make to the Climate Change (Emissions Trading and Renewable Preference) Bill to gain sufficient votes for it to pass?

Hon DAVID PARKER (Minister responsible for Climate Change Issues) : As I said in response to the same question last week, the bill was reported back to the House in very good shape, and talks with other parties are continuing.

Hon Bill English: Does the Minister plan to compromise on the phase-in dates for agriculture or liquid transport fuels in order to meet the Greens’ demands, so as to have the emissions trading scheme go through?

Hon DAVID PARKER: Talks with other parties are continuing.

Hon Marian Hobbs: What reports has the Minister seen on calls for delaying the emissions trading scheme?

Hon DAVID PARKER: The NZ Energy and Environment Business Week newsletter last week said: “National’s call for further delay is illogical. The issues have already been thrashed to death during the consultation and submission process. The implication from National is its version of the ETS will give business and farmers an easier ride. If this is so, then inevitably a higher cost will fall on taxpayers. National is simply trying to have a dollar each way.”

Hon Bill English: Will the Government consider reversing the delays announced by the Prime Minister, in order to meet the Greens’ demands in return for having the emissions trading scheme go through?

Hon DAVID PARKER: Talks with other parties are continuing.

Hon Bill English: Do the talks with other parties include discussion about the compensation that householders might receive for the costs put on New Zealand households as a result of the emissions trading scheme, and is the Government seriously considering the levels of compensation requested by New Zealand First?

Hon DAVID PARKER: As I have said repeatedly, as the Prime Minister has said repeatedly, and as the Minister of Finance has said repeatedly, that is one of the issues that are being discussed with the support parties.

Hon Bill English: Is the Government contemplating proposals that superannuitants receive compensation for the impact of the emissions trading scheme, but other groups, such as low-income families and beneficiaries, do not, because of the expense of compensating everybody?

Hon DAVID PARKER: Talks with other parties are continuing.

Hon Bill English: Can the Minister confirm whether the length of time that it has taken to conduct talks with other parties means that, in order to have the emissions trading legislation go through, the Government will be required to jumble together a series of contradictory policies demanded by other parties whose objectives are directly contradictory, with no attention to the practicalities of actually implementing the final messy policy?

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. I was going to raise this point of order when Mr English mentioned New Zealand First in a prior question, but I am raising it now: obviously, the Minister has no responsibility for the policies of other parties, but, more particularly, the member is misleading the House when he says that New Zealand First seeks to make this matter a tradable, negotiable item. We think it is important in and of itself, and by itself.

Madam SPEAKER: That is a matter of debate. It is not a point of order, although the member has, obviously, raised it as such. I listened very carefully. The member was not actually asking for a comment on others’ policies; he was asking what the Government was doing.

Hon Bill English: I raise a point of order, Madam Speaker. It is out of order for the member to try to conduct his negotiations with the Government in the House. The House is for question time and for points of order that are related to order, not debate—not the negotiations, which seem to be failing.

Madam SPEAKER: I thank the member. Does the member have another supplementary question?

Hon Bill English: I will ask that one again, because it was not answered. Can the Minister confirm that the time that it is taking for the Government to get enough votes to pass the emissions trading legislation means that the Government will ultimately be required to put together a bunch of contradictory policies that reflect the divergent objectives of parties like the Greens and New Zealand First; and can he confirm that the Government is going about this process without paying any attention at all to the practicalities of actually implementing some of this contradictory policy?

Hon DAVID PARKER: No, I cannot confirm that. What I can confirm is that the negotiations are, of course, happening in private, and I will not comment on other parties’ positions in those negotiations, other than to say that I find that the engagement with other parties on what is an important issue to be responsible.

Rodney Hide: What does it say about the integrity of the process that the Government is following with this legislation, and, indeed, about his ability as Minister, that all parties bar ACT agree with the emissions trading scheme, that the bill has been before a select committee, which heard substantial submissions and made a thousand-odd changes, and that now, behind closed doors, major planks of the legislation are still being negotiated, and the Minister cannot even tell us what the parameters are?

Hon DAVID PARKER: As I have previously said to the House—and as I would have hoped the member now understood—the fundamentals of the emissions trading scheme are quite simple: one creates a marginal price for increases in emissions, one avoids distortions between different sectors of the economy, and, therefore, one incentivises lower emission alternatives over high emission alternatives. Those principles, which are fundamental to the scheme, remain intact.

/NR/rdonlyres/1229B2BB-4031-416A-99E2-81D8E83E117D/86165/48HansQ_20080701_00000197_.pdfFull transcript of Questions for Oral Answer for Tuesday, 01 July 2008 [PDF 194k]

4. Obesity—Reports

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

4. LESLEY SOPER (Labour) to the Associate Minister of Health: What recent reports has he received on obesity?

Hon DAMIEN O’CONNOR (Associate Minister of Health) : The recent New Zealand Health Survey shows that the increase in the rate of obesity has slowed. After increasing between 1997 and 2002, the rate has remained static. However, one in three adults is still overweight and a further one in four is obese. That is why this Labour-led Government continues to support many programmes to encourage physical activity and proper nutrition at all age levels, and is why we are targeting obesity in the Public Health Bill. That is supported by many groups, from the Cancer Society of New Zealand to Diabetes New Zealand, but, I note, not by the National Party.

Lesley Soper: Has he received any other reports on tackling obesity?

Hon DAMIEN O’CONNOR: Yes, I have. I have seen a report that states: “Basic attitudes to food have to change before the tide of overweight and obesity will begin to reverse.” Another report states that school students would get “free Coke and Fanta and pies, and all that sort of stuff, you know.” The first quote is from the National Party’s contribution to the inquiry on type 2 diabetes. The second quote is from the National Party Leader of the Opposition, John Key, in August of last year.

Jo Goodhew: How do websites that cost $5.5 million to create and that encourage kids to interact with their computer screen actually get kids outside and running around using up energy; and is that not “nanny State gone mad”?

Hon DAMIEN O’CONNOR: Although that might not be the way that you, Madam Speaker, or I, or Murray McCully, or Gerry Brownlee become inspired to get out and exercise, the reality is that that does inspire young people to get out and become active. I quote from the website from one young person, who said: “I learnt how to dance these neat moves. I told my friends about them, and we practice.” The reality is that that website is indeed working. That is in complete contrast to the statement made by the Leader of the Opposition on the radio this morning in making a new policy, one based on slippery stats from slippery Nats, I would have to say. His statement says: “Firstly, the plan is literally to give them money and to measure them on a pretty low, a low, a trust model, if you like—quite a high-trust model—in which we will simply say: ‘Here’s some more money. You can choose to spend it how you like.’ ”. That is the new National Party policy on fighting obesity.

Hon Trevor Mallard: Would the Minister further see an announcement that performance-enhancing grants for Olympic athletes are to be withdrawn, announced 6 weeks before the Olympics, as something that would be drafted by a group of Australians rather than by people loyal to New Zealand?

Hon DAMIEN O’CONNOR: Indeed, that is the kind of unpatriotic behaviour that we have seen from the National Party consistently in every area of policy in Government. It is not that the National members have many policies. The simple facts are that we get consistent slippery stats from slippery Nats, and that is what we will see right through the campaign.

/NR/rdonlyres/F4772254-1AB4-4FAD-8B3A-B0D1FF2C89D4/86167/48HansQ_20080701_00000276_.pdfFull transcript of Questions for Oral Answer for Tuesday, 01 July 2008 [PDF 194k]

5. Inland Revenue Department—Outstanding Taxes

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

5. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Revenue: Does he have confidence in his department’s ability to collect outstanding taxes; if so, what directions, if any, has he given when taxes are not paid in accordance with the law on goods and services tax?

Hon PETER DUNNE (Minister of Revenue) : Yes, I do have confidence in the department’s ability to collect outstanding taxes, and for that reason I have not issued any instructions or directions to the Inland Revenue Department. The Commissioner of Inland Revenue is responsible for administering the revenue Acts and is charged with collecting the highest net revenue over time that is practicable within the law, and I expect him to meet that obligation.

Rt Hon Winston Peters: Referring to section 6 of the Tax Administration Act 1994, what was the solution presented by the National Party to the department in its dilemma over non-payment of GST in the 2005 election; and is he satisfied that its solution upheld the integrity of the tax system, which is the subject of section 6 of the Act?

Hon PETER DUNNE: I am not permitted under the legislation to disclose the affairs of individual taxpayers. What I can say is that section 6 of the Tax Administration Act 1994 does impose obligations upon the commissioner with regard to the collection of revenue, and he needs to do so mindful of the resources available to him at the time and also of the duties and the responsibilities of the taxpayer concerned. I would expect those obligations to have been followed in this case as with every other case.

Hon Bill English: Can the Minister confirm that when National put legislation to the House to enable it to comply with the GST rules, Parliament objected, including New Zealand First, but that New Zealand First then voted for retrospective legislation to make sure it did not have to repay to the taxpayer all the money it owed after the Auditor-General’s report?

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. On two counts, is that not an inappropriate question by the member, namely the Hon Bill English? Firstly, it raises a different issue, but, secondly, as a former Minister of Revenue he should know all about integrity, and that is why he is embarrassed today.

Madam SPEAKER: No, the question was within the Standing Orders.

Hon PETER DUNNE: I am not responsible for what happened in the House in the time that the member described, but, like him, I do recall what happened, and I am sure all members will draw their own conclusions. The key point is that the revenue Acts impose certain obligations upon the commissioner and taxpayers with regard to their responsibilities, and my role is to see that they are met.

Rt Hon Winston Peters: Is he concerned—

Rodney Hide: Just pay it!

Rt Hon Winston Peters: I have paid it. [Interruption] Oh yes, we have—unlike the National Party, and unlike, as I will demonstrate very shortly, that member! OK?

Madam SPEAKER: No, would the member please be seated. Interjections do provoke disorder, and we just saw an example of that. So I ask members to keep their interjections rare, otherwise I will be asking them to leave the Chamber if they create disorder. Now will the member just ask his question.

Rt Hon Winston Peters: Is the Minister concerned that no prosecution was brought against the National Party for its non-payment of $112,000 of GST after it blatantly and knowingly overspent its State-funded broadcast allocation during the last election campaign; and what message does that send to the hundreds of small businesses—

Bob Clarkson: Well, that’s the pot calling the kettle black!

Rt Hon Winston Peters: Well, here comes “Bob the Quitter”. Madam Speaker, I am trying to ask this question, and he is shouting out, having ripped off the ratepayers of Tauranga to the tune of $12 million for a stadium.

Madam SPEAKER: The member will please be seated. The only way we will get through this question is if it is heard in silence. Would the member please repeat it quickly.

Rt Hon Winston Peters: Is the Minister concerned that no prosecution was brought against the National Party for its non-payment of $112,000 of GST after it blatantly and knowingly overspent its State-funded broadcast allocation during the last election campaign; and what message does that send to hundreds of thousands of small business owners who are chased up by the Inland Revenue Department daily, due to overdue, non-paid GST?

Hon PETER DUNNE: We have a tax system that relies on fair compliance by all taxpayers. Clearly, when any taxpayer or group of taxpayers fail to meet their obligations, it not only creates a sense of unfairness within the system but it certainly generates a feeling amongst other taxpayers that some people are getting away with things that they are not able to get away with.

Rt Hon Winston Peters: Is the Minister aware that despite claims of an honest mistake, the deputy leader of the National Party was the last Minister of Revenue when National was last in Government, and this was the seventh election since GST was introduced; and did his department take this into account when it decided not to prosecute National over $112,000 of unpaid GST; and is he confident that the public’s perception of the integrity of our tax system has not suffered as a result of this deceitful episode of one law for one group, and another law for another group?

Hon PETER DUNNE: I am happy to confirm that the Goods and Services Tax Act was passed in 1985, and that Mr English was the Minister of Revenue at the time of the 1999 change of Government. I cannot comment on what negotiations may have taken place between his party and the commissioner, for the reasons that I outlined earlier on. The other point that I would make is that I do have a concern across the board about the integrity of our tax system, and for that reason I am keen to see all taxpayers meet their legitimate obligations.

Rt Hon Winston Peters: Can the Minister confirm that when the National Party came up with an arrangement to pay some money by way of a donation for a charity to Television New Zealand that payment attracted gift duty, and has the National Party paid that gift duty yet?

Hon PETER DUNNE: As I have said in response to earlier answers, I am not in a position to comment on the affairs of individual taxpayers, and therefore I am not able to answer that question directly—and, frankly, nor should I be.

/NR/rdonlyres/A1A4CA19-F22B-4EB6-ADE3-90EC9C268275/86169/48HansQ_20080701_00000323_.pdfFull transcript of Questions for Oral Answer for Tuesday, 01 July 2008 [PDF 194k]

6. Electricity Generator, Whirinaki—Diesel Use

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6. GERRY BROWNLEE (National—Ilam) to the Minister of Energy: How many litres of diesel has the reserve electricity generator at Whirinaki used this year?

Hon DAVID PARKER (Minister of Energy) : The generator at Whirinaki has used 35.285878 megalitres of diesel. For Mr Brownlee’s benefit, each of those is bigger than a nanolitre by 1015. In practical terms, that represents less than 1 percent of total generation this year.

Gerry Brownlee: Can the Minister confirm that on Tuesday of last week the Electricity Commission published a consultation paper in which it stated that it may need to spend another $165 million this year on using the Whirinaki generator, just to keep the lights on, and that that would treble its budget for this year; and can the Minister further confirm that the $165 million will be recovered from consumers, so that Labour’s midwinter Christmas present to New Zealanders will be an increased power bill for everyone?

Hon DAVID PARKER: Madam Speaker—

Hon Trevor Mallard: No, it’s lower.

Hon DAVID PARKER: As Mr Mallard interjected, the effect will be that the cost to consumers is lower, because electricity funded in that way will have less of an effect on prices than the status quo. Of course, the Whirinaki generator is being used this year. Last year it was not used at all—I think it was fired up on 1 or 2 days, just for trial purposes—because we had lots of water. That is why one has reserve generation—for dry years.

Gerry Brownlee: Does the Minister recall telling the House a couple of weeks ago that the current spot price does not affect residential customers, and that they should not expect increased power bills as Meridian Energy had predicted; if so, can he now tell us how the levy of $165 million, which will be met in large part by householders, will lower their power bills?

Hon DAVID PARKER: I can confirm that I said that residential consumers are not exposed to the spot price, but, of course, the member is now ignoring the interests of commercial users, some of whom are exposed to the spot price.

Gerry Brownlee: Can the Minister confirm that the level of Lake Hāwea—whose sole purpose in the electricity system is storage—is currently at the very bottom of its resource consent range, and that the guardians of the lake are extremely concerned about the environmental harm that will be created if the lake goes below the 338-metre level, which has not occurred for some 26 years; and does he regard that environmental damage—[Interruption] Do you want me to start again, Madam Speaker?

Madam SPEAKER: No, continue. But would the member please desist from interjections.

Gerry Brownlee: Can the Minister confirm that the level of Lake Hāwea—whose sole purpose in the electricity system is storage—is currently at the very bottom of its resource consent range, and that the guardians of the lake are concerned that if it goes below 338 metres, which it has not done for some 26 years, considerable environmental damage will be done; and does he think it is acceptable for him, as Minister, to preside over that damage taking place, when his Government talks so frequently about sustainability and protection of the environment?

Hon DAVID PARKER: No, I cannot confirm it as stated by the member. It is true that the level of Lake Hāwea is close to the bottom of its normal operating range; none the less, the terms of its resource consent that now apply, that have long applied, and that were approved and granted by the Environment Court, state that in very dry years it can be drawn down by another small amount. Whether that happens remains to be seen.

Gerry Brownlee: Can the Minister confirm that the Electricity Commission has also said it may need to spend a further $5 million to run a conservation campaign later in the winter, and does this not mean that the commission has no confidence in the Minister’s continued assurances that there is little prospect of a crisis, there is no need for a conservation campaign, and everything will be OK?

Hon DAVID PARKER: It is not yet clear how much of the funding that has been provided to the Electricity Commission will need to be drawn down, because that depends upon hydro inflows between now and the end of winter.

Gerry Brownlee: Can the Minister confirm that the overall picture for electrical power in New Zealand looks a bit like this: spot prices are the highest they have ever been, lake levels are incredibly low, thermal generation is producing 45 percent of our power needs, the so-called reserve generator is guzzling millions of litres of diesel, consumers are being told to cut back on their power use, industry has already cut production, we are reliant on an asbestos-ridden, inefficient gas plant at New Plymouth, and the Electricity Commission wants another $165 million from consumers to keep the lights on, yet the Minister claims we do not have a crisis and says that we should not worry, because the system is working?

Hon DAVID PARKER: In no particular order, yes and no.

/NR/rdonlyres/4E8E5535-B23F-4A66-AE3D-764CF5F417DE/86171/48HansQ_20080701_00000391_.pdfFull transcript of Questions for Oral Answer for Tuesday, 01 July 2008 [PDF 194k]

7. Workers—Improvements

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

7. DARIEN FENTON (Labour) to the Minister of Labour: What changes helping workers take effect today?

Hon TREVOR MALLARD (Minister of Labour) : The maximum parental leave payment will increase from $391.28 per week to $407.36 a week from today. The minimum parental leave payment for self-employed people also increases from $112.50 per week to $120.00 per week before tax. Parents already receiving payments will automatically receive a higher payment from today. For the year ended 21 March 2008 over 22,400 Kiwi parents received parental leave payments. Since the scheme was introduced in 2002, more than 130,000 parents have received paid parental leave. I am glad the National Party has promised to abolish it.

Darien Fenton: What other changes is the Minister supporting to assist workers?

Hon TREVOR MALLARD: I am supporting a raft of changes in the employment relations environment. These include entitlements to flexible working hours, which are available today thanks to Sue Kedgley’s initiative; enhancements to protect casual and temporary workers; amendments to ensure the transferability of public holidays for shift workers; entitlements to meal and rest breaks; and entitlements to facilities and time for infant feeding where that is appropriate and reasonable. I find it quite interesting that the National Party has not figured out how it can support any of those changes. It is sad that it thinks that working people should just be ground into the dirt.

Sue Kedgley: Has the Minister seen the comment posted on the New Zealand Herald website today by Kim H from Australia, who writes: “I had the misfortineof working for a couple of companies in NZ that refused to allow flexible working hours (along with a very rigid "do-as-you-are-told" culture and they sucked. Invariably run by fearful, short sighted management, staff moral was low, turnover high with everyone looking on job search sites during the day and a strong culture of blame. Typical NZ company unfortunately.”; and does he agree that that is yet further evidence that the new flexible working right, which comes into effect today as a result of a Green Party member’s bill, is sorely needed in New Zealand?

Hon TREVOR MALLARD: To the second part of the question, yes. To the first part, I have not seen it. But I have been reading the New Zealand Herald blogs today, and there is a very good one about the man who says “Yes” when he means “No”, “No” when he means “Yes”, “Right” when he means “Wrong”, and “Wrong” when he means “Right”. I recommend that people look at the political blog on the New Zealand Herald website today, because it describes John Key very, very well.

/NR/rdonlyres/90F9D582-09B7-46C8-8617-1C1F64893F70/86173/48HansQ_20080701_00000464_.pdfFull transcript of Questions for Oral Answer for Tuesday, 01 July 2008 [PDF 194k]

8. Leaky Homes—Government Initiatives

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

8. Hon Dr NICK SMITH (National—Nelson) to the Minister for Building and Construction: Does he stand by his answers in the House in February and March this year that taxpayers are getting value for money from the Government’s initiatives to fix the leaky homes problem and that the Weathertight Homes Resolution Service is working well?

Hon SHANE JONES (Minister for Building and Construction) : Yes, but as always there is room for improvement.

Hon Dr Nick Smith: Why did the Minister contradict these earlier statements at last week’s Social Services Committee by admitting there were serious problems with the Weathertight Homes Tribunal and saying “I wonder whether they should all just go straight to the High Court.”; and does he now accept that the Weathertight Homes Tribunal has been an expensive flop?

Hon SHANE JONES: Not surprisingly, the member has taken out of context what was a very lucid dissertation on my part. The observation was made by the chair of that very committee that perhaps too many lawyers are involved; I presume that those are the ones, acting on the instructions of local government, who want to drive the complainants into the High Court.

Hon Dr Nick Smith: Can the Minister simply explain then, being so “illicit”, as to—

Hon Clayton Cosgrove: “Lucid”!

Hon Dr Nick Smith: Can the Minister simply explain to the House what he meant by the statement “I wonder whether they should just go to the High Court.”?

Hon SHANE JONES: Unfortunately my expertise does not stretch as far as that of the member on matters to do with the High Court. I will, however, point out that there is a trend: too many parties, in particular those associated with local government, are using lawyers in what should be a non-litigious process, and they are making life difficult for the complainants. Those who do not use lawyers are enjoying expeditious consideration. I say to Mr Ryall, who is hopping around like a bunny, from burrow to burrow, to keep quiet.

Hon Dr Nick Smith: What moral authority does the Government have for damning councils, builders, and developers for employing expensive QCs to minimise its liabilities over leaky homes, when this is exactly what the Government has done, and has spent over $5 million on QCs in denying any liability?

Hon SHANE JONES: The lawyers currently representing local government and others are not employed by the Crown. The process that has been developed was developed as a mediation service, with arbitrators being able to make binding calls. We expect parties to come with the spirit of reconciliation, not ongoing adversarialism.

Hon Dr Nick Smith: How can the Minister justify the $110 million spent on weathertight homes resolution over the last 6 years when only 18 percent of claims have been resolved, amounting to a cost of $110,000 on the bureaucracy of processing each claim when the average settlement is only $70,000; and would it not be far better to spend this taxpayer contribution on actually fixing the houses?

Hon SHANE JONES: There are opportunities for homeowners to seek loans; there are opportunities for homeowners to use this service or to go in a different direction. There have been 6,313 properties under consideration, and a number of them remain in the process of being repaired. A number of homeowners have elected to go elsewhere.

Hon Dr Nick Smith: Has the Minister seen the estimates from Local Government New Zealand that $800 million is to be spent on litigation over leaky homes, and the report by Otago University that states that over $474 million will be spent on health costs associated with leaky homes, as well as causing an additional suicide each year, and are these facts not sufficient for the Government to accept that a fresh approach that focuses on getting the houses fixed is required?

Hon SHANE JONES: Let us recall the Don Hunn report: this problem is reflective of a systemic failure originating at a time when there were no rules and regulations adequately monitored or kept in check. Dr Smith is well aware of that; after all, the party that he belongs to held sway, unfortunately, for that period of time.

Hon Dr Nick Smith: Where is the consistency in the Government’s position when it has said over and over again that the problem of leaky homes is the fault of the previous Government and the 1991 Building Act—despite Labour having voting for it and George Hawkins saying that it was all Labour’s work—and the Government is also saying now that it was all the fault of councils and that the Government has no liability; where is the consistency?

Hon SHANE JONES: I would direct the member’s attention towards the Sacramento decision and other High Court jurisprudence that state clearly that the parties facing liability are local government and a variety of other providers, not the Crown.

Hon Dr Nick Smith: Is it not a sign that this Government is tired and past it when, after 6 years, seven Ministers, four legislative attempts, and $110 million, less than one-fifth of leaky home claims have been resolved under the resolution service, when the Minister admits that claimants would be better off to go directly to the High Court, and when the Government has no idea how to move forward and get the homes fixed?

Hon SHANE JONES: I repeat yet again: where highly priced lawyers are used by local government to make the lives of these homeowners unnecessarily miserable, then the homeowners are very unwise to expect to find an open cheque at central government that, no doubt, has been promised to them by that member.

Sue Moroney: What progress has been made with resolving disputes and getting homes repaired under the scheme brought in by Labour to fix up a mess that happened under another Government?

Hon SHANE JONES: Over half of all claims have now been resolved or closed. They are being settled within 17 weeks, compared with 12 months under earlier iterations, and 75 percent are settling at mediation, which allows the parties to be in control. That shows that the Government’s intention of streamlining improving is working, despite the best efforts of rapacious law firms.

Hon Dr Nick Smith: Contrary to the Minister’s claims of 50 percent of cases being resolved, I seek leave to table the Weathertight Homes Tribunal’s own statistics through to May 2008, showing that only 18 percent of—

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

/NR/rdonlyres/4F15B532-22B7-4041-B6CD-45C756034E5F/86175/48HansQ_20080701_00000506_.pdfFull transcript of Questions for Oral Answer for Tuesday, 01 July 2008 [PDF 194k]

9. Public Transport and Roading—Budgets

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

9. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Transport: Can she confirm that yesterday the Government announced in this year’s National Land Transport Programme a public transport budget of $325 million, and a roading budget of $1.94 billion—in other words, six times more for roads than for public transport?

Hon ANNETTE KING (Minister of Transport) : Yes, this year’s National Land Transport Programme allocates a record $2.7 billion for the development of New Zealand’s transport network. The programme provides 24 percent more funding for public transport than last year—more than double the 11 percent increase in funding for roads. However, as well as the record $325 million National Land Transport Programme investment in public transport, the Government is investing an additional $300 million in rail infrastructure. I think it is worth remembering that public transport funding was frozen at $40 million a year throughout the 1990s, and has been increased 15 times by this Government.

Dr Russel Norman: Is it not true that the Government is still on the biggest road-building binge this nation has ever seen, and does that not show that this Government is in deep denial about the end of cheap oil?

Hon ANNETTE KING: No, but the Government is committed to continuing to maintain and build roads in New Zealand, because we need good roads for passenger transport as well as for our cars. I think it is important to remember where the revenue to pay for our passenger transport is being taken from: it is coming from the users of our roads.

Hon David Benson-Pope: Can the Minister share with the House other advances that the Government has made, and any other reports that she has seen in respect of public transport?

Hon ANNETTE KING: Today is a great day for passenger transport in New Zealand, because today our country’s rail and ferry services were transferred back into Government ownership. The purchase of those services will substantially benefit all New Zealanders in terms of more energy-efficient transport of passengers and freight. I believe we can now make some strategic decisions on investment that are needed not only in terms of rail but also in terms of an overall sustainable transport system.

Rt Hon Winston Peters: Will the Minister confirm that, for the good of our economic and social well-being, this country needs to inject more capital into roading, and there needs to be a balance between funding for roads and funding for other transport modes; does she believe that she has got the balance correct, or is it correct that, as every Australian knows, we cannot have good public bus transport without good, efficient public roads?

Hon ANNETTE KING: Deciding the priorities for expenditure of the National Land Transport Fund is very difficult because there are many more demands than there is money within the fund. So what we have done is give a reasonable balance between those priorities. We cannot stop building and maintaining roads; in fact, the Green co-leader Jeanette Fitzsimons acknowledged that recently at a forum that I was at with her—that we will always need roads. But getting right the balance between roads and passenger transport is very important. We have committed more money to passenger transport than any other Government has done, and we will continue to do so.

Dr Russel Norman: When will the Ministers of this Government get out of their Crown cars, catch the bus to work as I did this morning, and realise that the public transport system is groaning and bursting at the seams as, owing to higher petrol prices, people get out of their cars and try to catch a bus or train to work, only to find that the system has been underfunded and under-invested in for many, many years?

Hon ANNETTE KING: I suggest that the member first directs his anger at the lack of investment in passenger transport right throughout the 1990s. He may have noticed that I said the amount was $40 million a year. In the 9 years that Labour has been in Government there has been considerable investment in passenger transport, and we are committed to doing more. So I feel a little aggrieved at the attack on our funding of passenger transport. I also say to the member that a large number of my colleagues walk to work; others, including me, have a bus ticket and have caught the bus to work.

Hon Jim Anderton: Has the Minister received any reports on the VIP car service that is available from Selwyn Street in Spreydon to the Beehive in Wellington?

Hon ANNETTE KING: No, I have not. But let us be straight about this: there are members of Parliament who travel here in VIP cars; there are members of Parliament who drive their own cars; there are members of Parliament who catch taxis; and there are members of Parliament who ride a bike or walk. Their means of transport is their choice. I do not think we ought to judge people’s choices in that way. We ought to encourage people to use other modes of transport whenever they can, and that is certainly what we have been doing.

Dr Russel Norman: Has the Minister received any advice that there is a connection between the woeful underfunding of public transport in this country and the fact that five party leaders of five political parties in this Parliament are driven around each day in Crown cars, and have no idea what it is like out there because they do not know what is going on with public transport?

Hon ANNETTE KING: That is a very unfortunate assumption to make about party leaders in this Parliament. I think the member is drawing a long bow to say they do not know what is happening in terms of passenger transport. I can certainly speak for the Prime Minister, who is very aware of passenger transport, and is very aware of being responsible for the Northern Busway, which was one of the biggest public transport projects ever funded in New Zealand, and which was funded by this Government. I believe that many members in this House are very aware of the importance of public transport, and I suggest we ought to work together on that issue, rather than that member whipping up a political storm for political purposes.

/NR/rdonlyres/4D678945-35FC-4FA7-A52C-4A2D10A27FC3/86177/48HansQ_20080701_00000598_.pdfFull transcript of Questions for Oral Answer for Tuesday, 01 July 2008 [PDF 194k]

10. Surgery, Elective Procedures—Discharges

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

10. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: Does he stand by his statement of 19 May 2008 that “in 2001/02 there were 199 discharges from elective surgery procedures per 10,000 people. In 2006/07 that had grown by 207 people per 10,000”; if so, why?

Hon DAMIEN O’CONNOR (Associate Minister of Health) on behalf of the Minister of Health: Yes, but as the member was advised last Friday in reply to his written question, there was a typo in the statement and the word “by” should have been “to”. It should have read that “in 2001/02 there were 199 discharges from elective surgery procedures per 10,000 people. In 2006/07 that had grown to 207 people per 10,000”. New Zealanders will see this as great news about our well-resourced public health system.

Hon Tony Ryall: Can the Minister confirm that this data only counts elective surgery for adults, not children, and that when children are included the elective surgery rates per head of population have hardly changed at all; and is this another example of what he calls a “factual misunderstanding”?

Hon DAMIEN O’CONNOR: I have explained the typographical error. I confirm that those figures relate just to adults, but even when we take into account elective surgery for children we see that the rate has gone up. I cannot trust any of the statistics from slippery National Party members. I am quite happy to go away and find out the details of any of the questions the members has and give him factual answers, not the fiction that he keeps coming up with.

Jill Pettis: Can the Minister confirm that notwithstanding Mr Ryall’s constant attempts to undermine the health system, the number of elective surgeries has increased under this Labour Government; if so, by how many?

Hon DAMIEN O’CONNOR: Yes; last year alone 7,000 more elective procedures were carried out than in the previous year. It is about time the National Party fronted up and told New Zealanders how deep the cuts would be to the public health system if National were ever given the chance to take the reins of power.

Hon Tony Ryall: Does the Minister stand by other surgery-related figures he has released, such as his claim that the number of patients getting a surgical first specialist assessment had doubled under Labour, when he must have known he was comparing a half-year result in 2000 with a full-year result in 2007; and what sort of “factual misunderstanding” is that?

Hon DAMIEN O’CONNOR: Again, those are slippery figures from Tony Ryall. The reality is that in 2001 there were 123,943 surgical first specialist assessments and in 2007 there were 241,000. That is the kind of progress that we have made in the public health system, and I know that under a National Government New Zealanders will be bound to John Key’s philosophy: “Well, in the end it’s called the market. If general practitioners decide to charge a lot more, then probably someone will go down the road.” That is his attitude to general practitioner fees and the public health system, and it is the attitude of Tony Ryall as well.

Hon Tony Ryall: Is the Minister aware that the 2001 figure he gave is a half-year figure and that is why the figure doubled, and that in fact there has been a complete flat-line showing that fewer New Zealanders get a first specialist appointment today than 9 years ago?

Hon DAMIEN O’CONNOR: I quoted the figures that have been given to me, and I do not for a moment believe any of the statistics that are put out by National Party members, because they have to change them time and time again, as they do with their policy and ideas.

Hon Tony Ryall: What sort of factual misunderstanding is behind the Minister’s claim yesterday that hospital emergency departments are performing well for seriously ill and injured patients—triage 2—where he said: “Auckland is seeing these patients faster”, when in fact it is taking longer, and when some of our biggest emergency departments like Waitemata and Wellington are falling behind?

Hon DAMIEN O’CONNOR: I do not accept the member’s claims for a moment. We are constantly barraged by wild claims, accusations, and attacks on the public health system by National Party members. They are not prepared to front up and say what National would do should it ever get into power. We know that National would undermine and dismantle the public health system, and we would see a drastic reduction in all services. This Government has put billions of dollars of extra funding into the public health system, and it is delivering more benefits to New Zealanders in every single area of its performance.

Hon Tony Ryall: When the Minister talked about a “factual misunderstanding” last week, did he mean that he misspoke; and what other “Clintonesque” excuse does he have for the fact that despite the doubling of the public health budget there has been hardly any increase in elective surgery or first specialist assessments for New Zealanders?

Hon DAMIEN O’CONNOR: That member might call it “hardly any”, but I say that 10,000 additional elective surgeries is a huge improvement that has made a huge difference to the lives of at least 7,000 New Zealanders. If that member wants to belittle that progress and what that has done for 7,000 New Zealanders, then God help us if he ever were to become Minister of Health.

Rt Hon Winston Peters: I seek leave to table evidence that the dramatic increase in hospital operations in this country occurred in 1998 as a result of the New Zealand First budgetary initiatives, which—

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

Hon Tony Ryall: I seek leave to table a press statement that used the figures the Minister used in his answer, which was subsequently retracted—

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

/NR/rdonlyres/DC18D418-D463-4589-80B8-4A15FE6B1297/86179/48HansQ_20080701_00000665_.pdfFull transcript of Questions for Oral Answer for Tuesday, 01 July 2008 [PDF 194k]

11. Homeownership—First-home Buyers

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

11. RUSSELL FAIRBROTHER (Labour) to the Minister of Housing: What Government initiative to help first-home buyers starts today?

Hon MARYAN STREET (Minister of Housing) : Applications open today for the shared-equity pilot, and the first loans will be granted at the end of the month. Eight hundred and thirty inquiries have been received to date and 470 information packs requested. Meanwhile the National Party is refusing to tell the public whether it intends to scrap the scheme.

Russell Fairbrother: How will the Government be delivering the shared-equity scheme?

Hon MARYAN STREET: The Government has signed up Kiwibank to deliver the scheme—the same Kiwibank that, just like KiwiSaver and KiwiRail, New Zealanders support and National opposed.

/NR/rdonlyres/232A9012-16D7-48CE-8520-0DEF5CB5C08A/86181/48HansQ_20080701_00000730_.pdfFull transcript of Questions for Oral Answer for Tuesday, 01 July 2008 [PDF 194k]

12. Education, Ministry—Performance

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

12. ANNE TOLLEY (National—East Coast) to the Minister of Education: Is he satisfied with the performance of the Ministry of Education; if so why?

Hon PAREKURA HOROMIA (Associate Minister of Education) on behalf of the Minister of Education: Yes, but I am sure that it, like all of us, can always do better.

Anne Tolley: Does the Minister support the Auditor-General’s report on the ministry’s monitoring of schools’ board of trustees, and the Auditor-General’s claim that he “cannot be confident that [the ministry] is consistently identifying all boards at risk and that it is offering timely support to these boards.”?

Hon PAREKURA HOROMIA: The Auditor-General’s report has been noted, and the Ministry of Education is continuing to ensure that all boards are supported.

Anne Tolley: Why does the Minister defend his ministry when, despite it having information to identify schools having difficulties, it sat on its hands for up to 5 years and did not intervene in three schools that were clearly in financial trouble and in dire need of the ministry’s help?

Hon PAREKURA HOROMIA: I would be interested to know which three schools those are. On getting that information, I will ensure that the ministry follows it up

Anne Tolley: Is it acceptable that a whole cohort of students can spend their entire time at a secondary school that is ignored by the ministry, which knows full well that the school is in dire financial straits and negatively affecting the students’ learning, but takes no action to arrest the school’s financial decline?

Hon PAREKURA HOROMIA: I would need the member to name that school so that I could understand clearly where she is going with this questioning.

Anne Tolley: Does the Minister accept the Auditor-General’s conclusion that the ministry, in many instances, “took too long to put a statutory intervention in place to assist boards who were experiencing financial difficulties”, and will he apologise to the students of the three schools identified in the report as having been deliberately neglected by the Ministry of Education for up to 5 years?

Hon PAREKURA HOROMIA: In response to the first part of the question, yes, there could have been better delivery. In response to the second part of the question, the member did not allude to those three schools being part of the report.

Te Ururoa Flavell: Tēnā koe, Madam Speaker. Kia ora tātou. Has the Minister read the submission from the Dyslexia Foundation of New Zealand to the Ministry of Education that identifies that funding to provide for children with learning disabilities is noticeably absent from the Schools Plus proposal; and does he agree with the foundation that “Schools Plus is fundamentally flawed, the ambulance at the bottom of the cliff for underperforming school leavers who are already disengaged and disenfranchised, and have had years of inadequate support.”; if not, why not?

Hon PAREKURA HOROMIA: The Government officially recognised dyslexia in April 2007, and significant progress has been made in incorporating work on teaching students with dyslexia to read, working with groups such as the Dyslexia Foundation of New Zealand and SPELD. We are spending $57.8 million on literacy and numeracy programmes, which have been reviewed and now include a specific focus on dyslexia. As to the second part of the question, Schools Plus is certainly about ensuring that youngsters stay in some form of education to the age of 18. That is the Labour Party’s policy. I ask National members what their policy is; I am quite certain that National has no education policy.

Te Ururoa Flavell: Has he read the letter of May 2008 from the Principal Youth Court Judge, Andrew Becroft, which stated that robust research suggested that the route to offending may start with classroom difficulties caused by undiagnosed learning problems; and when will the Ministry of Education consider that learning difficulties are a priority for education funding?

Hon PAREKURA HOROMIA: That same judge is very supportive of B4 School checks, and of ensuring that something is proactively done about those teenagers who tend to drift out of school.

Te Ururoa Flavell: What assurance can he give the Principals Federation that additional resourcing will be invested in schools to help principals cope with the increasing demands of policy and of children with special needs and behavioural issues, as well as administrative support, principal development, and other funding issues?

Hon PAREKURA HOROMIA: All of those issues are well covered in the policy of the Labour-led Government. The Labour-led Government has made investing in New Zealand schools a priority. We spend 4.4 percent of GDP on compulsory schooling, compared with the OECD average of 3.6 percent. We are well ahead of Australia, which invests 3.5 percent of its GDP, and the USA, which invests 3.7 percent. Funding for education has gone up by 84 percent since 1999 under this Government.


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