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Questions and Answers - 2 July 2008

02 Jul 2008 Questions for Oral Answer Page 1 of 24 (uncorrected transcript—subject to correction and further editing) WEDNESDAY, 2 JULY 2008



Rail and Ferry Purchase—Profitability

1. JOHN KEY (Leader of the Opposition) to the Prime Minister: Does she stand by her statement, in relation to the Government’s purchase of rail and ferry assets, that “we are not going into this to make money”?

Rt Hon HELEN CLARK (Prime Minister): Yes.

John Key: What is the Government’s best estimate of its ongoing financial return from the purchase of rail and ferry assets?

Rt Hon HELEN CLARK: I do not have that figure available. The member should put it down on notice.

Tim Barnett: Which lines did Toll threaten to close if it did not get what it wanted in the rail access agreement?

Rt Hon HELEN CLARK: I understand that the services that would have been closed under Toll’s plan B, in response to that situation, included the *Overlander passenger service, the central North Island section of the main trunk line from Te Kūiti* to Palmerston North, the Northland line, the Taranaki line, the Hawke’s Bay line, the Napier to Gisborne line, the Wairarapa line north of Masterton, Picton to Christchurch freight and passenger services, the Greymouth to Hokitika line, the Invercargill to Bluff line, and the Invercargill to **Wairio line. I take it from the reaction of National members that they would love to see all of those lines closed. Labour would not.

John Key: What was the value of the premium that the Crown paid, as indicated by Dr Cullen yesterday, for the purchase of KiwiRail** from *Toll Holdings?

Rt Hon HELEN CLARK: I do not have a figure for a value on the premium.

Rt Hon Winston Peters: Has the Prime Minister received any reports, namely, for example, from *Booz Allen and Hamilton, that say that *New Zealand Rail was making $36 million in 1993 and was down to make $100 million in 1994; and does she therefore not believe that taxpayers are entitled to some compensation for the 1993 sale of New Zealand Rail by the then National Government to its corrupt mates in Fay Richwhite and a foreign-owned company, Wisconsin Central Transportation*?

Rt Hon HELEN CLARK: The member, like the Labour Party, opposed that sale. But there was one person who fully backed that sale and that was Mr Key, a director of *Bankers Trust, which got the contract to advise the New Zealand Government on that sale. That sale was worth $400 million to the New Zealand Government—the National Government—in 1993. In that same year—the 1993 financial year—Bankers Trust, of which Mr Key was a director, pocketed $39 million in profit.

Members should ask themselves the question, who benefited from the sale of **Tranz Rail? Mr Key and his friends. John Key: What is the *expected cost of the rolling stock the Crown will need to purchase if it wants to run the assets at the level that it is proposing to the New Zealand public, over the next 5 years?

Rt Hon HELEN CLARK: The Minister of Finance advised the House yesterday that to keep the rolling stock in its steady state—for example, no improvement—would require an investment of around $80 million a year. He further advises that to actually invest in an improved service— modern container wagons and customer-specific wagons—he estimates will cost around another $300 million over 5 years. That is a very good investment in a sustainable transport system.

Hon Jim Anderton: Has the Prime Minister received any reports that those in this House who are critical of the purchase of KiwiRail would, if they were in a position to do so, sell KiwiRail if they had that opportunity?

Rt Hon HELEN CLARK: I am sure National would like nothing better than to sell KiwiRail.

Indeed, the National Party has opposed KiwiSaver. It has opposed Kiwibank. Now it opposes KiwiRail. What is it about kiwis and the public interest that the National Party hates?

Rt Hon Winston Peters: Does the Prime Minister have any reports that in October 1992 Fay Richwhite got itself made the financial adviser to *New Zealand Rail, and that on 26 April the next year it jumped across the table and said: “Hello, Government; we’re the buyer.”; and can she confirm that Mr Key’s company at the time facilitated that arrangement, which did not go to the market and did not go to tender but was just made with that Government’s corrupt mates in Fay Richwhite?

Rt Hon HELEN CLARK: My understanding of the facts is the same as the *right honourable member’s—that Fay Richwhite did, indeed, jump across the transaction. We know that Mr Key was a director of *Bankers Trust, which advised on that sale. We know, furthermore, that in 2002 Mr Key’s family trust bought 30,000 shares in Tranz Rail— Hon Members: What?

Rt Hon HELEN CLARK: —30,000 shares in Tranz Rail. We know, furthermore, that as associate transport spokesperson for the National Party in 2003, Mr Key commented on whether the Government should be buying back the track. We can find no record of Mr Key disclosing his financial interest as a shareholder.

John Key: Can the Prime Minister confirm her answer from a little earlier that she is saying that Dr Cullen indicated the cost would be $80 million a year and $300 million to bring the rolling stock up; so are we led to believe therefore that the total cost of the rolling stock over 5 years, according to the calculations the Prime Minister has provided to the House, will be $700 million?

Rt Hon HELEN CLARK: That would be the simple addition of what I indicated the Minister of Finance’s advice was, but the gentleman who is asking the questions has never supported the Government’s buying back of rail. Indeed, Mr Key as associate transport spokesperson while owning shares in Tranz Rail at the time—which he never disclosed, as far as we can see—said publicly that shareholders were telling him they supported Toll’s offer for Tranz Rail over the Government’s offer. Well he would, would he not, because he was a shareholder, yet he purported to be speaking in the public interest as an Opposition associate transport spokesperson.

Peter Brown: Noting the Prime Minister’s earlier answers to the former director of Bankers Trust, can she confirm that she shares the view of New Zealand First that taxpayer ownership of KiwiRail will enable the Government to take a more strategic overview of transport in this country and make decisions that are in the best interests of New Zealand, our people, and our social and economic well-being, whereas private owners need only to make decisions that increase profits and satisfy their shareholders, and in this case overseas shareholders?

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. The National Party members may be embarrassed, but they should be required to keep quiet while a question is being properly asked about a very key strategic asset—or it used to be, until they sold it. If they are embarrassed,

that does not mean that 10 of them are allowed to shout across the House while a question is being asked, so that we cannot even hear even though we sit next to our colleague.

Madam SPEAKER: I just ask members to keep the level of interjections down so that other members can, in fact, be heard. Would the member please complete his question.

Peter Brown: Well, I had got to the end of it, but I do not mind asking it again.

Madam SPEAKER: No, I think the *right honourable Prime Minister understood it.

Rt Hon HELEN CLARK: I absolutely agree with the import of Mr Brown’s question. The fact is that the Government has decided to make a strategic investment in rail rather than pay everincreasing subsidies to a private company. Bringing this rail company back into public ownership enables investments to be made in the public interest in a sustainable transport system.

Rodney Hide: Why does the Prime Minister not have sufficient confidence in her policies to stand up in this House and defend them rather than throw the dirt across to the Leader of the National Party; and could she explain to the people of New Zealand why rail is deemed to be so sustainable, when it cannot even cover its costs and she intends to use the taxpayer to put in hundreds of millions of dollars more funding—is that the Labour Party’s definition of sustainable?

Rt Hon HELEN CLARK: The member misses the point. Taxpayers were up for hundreds of millions of dollars to subsidise Toll. The Government has made a decision that that does not make sense, when the opportunity for ownership is there. I would like to know what “Mr ACT”, Mr Hide, considers is dirt about telling the truth about Mr Key being a director of *Bankers Trust when it advised on the privatisation in 1993, when it made a substantial profit of $39 million that year, when Mr Key’s family trust bought shares in Tranz Rail, and when no record can be found of him disclosing that interest when he was commenting on the sale in 1993 on behalf of his party.

John Key: Can I encourage the Prime Minister to give the right honourable Michael Cullen a call when she leaves the House, when he will probably inform her that he did not actually say it would be $80 million a year for the rolling stock but would be $80 million in total, so the Prime Minister has got that bit wrong; and can we conclude from the rest of the Prime Minister’s answers today that she is actually telling the House that she has no idea of what the return from rail will be, although she is pretty sure it will be negative and therefore will not talk to us about it, that she has no idea of the premium that the Crown paid to Toll Holdings, and that she actually has no idea how the rolling stock will be paid for or how much it will cost—that when it comes to this issue, she has no idea?

Rt Hon HELEN CLARK: Of course, Mr Key had the opportunity to ask all those questions of the Minister of Finance yesterday and absolutely fluffed his questions. I am interested to know what the National Party’s real policy on rail is, because I heard an interjection earlier from Gerry Brownlee, which said in respect of the Government’s purchase of rail that the *shipyards are back.

Mr Brownlee, if you think this policy is like buying Polish shipyards, why do you not state what you really believe and say that National supports rail privatisation, as it has always done and as Mr Key did when he advised on the privatisation in 1993?

Hon Bill English: I raise a point of order, Madam Speaker. The member is a senior member and knows that her use of the term “you” is out of order.

Madam SPEAKER: Yes, I am sure all members have been reminded of that and, of course, I am sure none have made that error before in this House. But I remind members to keep to the Standing Orders.

Rt Hon Winston Peters: Has the Prime Minister any reports that suggest a certain political party is running around the country saying that the railways in 1993 were running at a loss despite what was said in the Booz Allen and Hamilton report, which was the most authoritative document at that time; and could it possibly be true that Mr Key and his company advised on privatisation and purchase to their client because the company was a loser and was bound to cost them a fortune if they bought it? Rt Hon HELEN CLARK: I have no reason whatsoever to doubt what the member has just said.

I know that the National Party is so ideologically wedded to privatisation that if a State company is making money, it says: “There you go; the State doesn’t need to own it.” If the company is losing money, it says: “You should sell it to get rid of that liability.” Whatever the state of a public company, the National Party has an excuse for selling it.

Madam SPEAKER: Point of order, Rodney Hide.

Rodney Hide: It is a supplementary question.

Madam SPEAKER: I would ask members, when they trade their supplementary questions, to give me notice of that fact before they rise to their feet.

Gerry Brownlee: I raise a point of order, Madam Speaker. Perhaps the Labour members may also like to do that. We see Mr Anderton and various other support parties take more than their allocation of supplementary questions on any given day. [Interruption] Madam SPEAKER: Please be quiet. As Mr Brownlee knows—and I have ruled on this before—if members notify me of a change in supplementary questions, that is fine. I am notified by parties of that, and it changes during the time that I am notified before the member rises to his or her feet, so there is no embarrassment—everybody knows. I had not been notified of Mr Hide’s supplementary question. Rodney Hide.

Rodney Hide: I apologise. Are New Zealanders to take it from the Prime Minister’s performance in the House today that although she has come here to answer questions about rail, she does not know what it will cost taxpayers, she does not know what the premium was that was paid by the Government, and she does not know what the ongoing fiscal cost of rail is, but that she has actually taken the trouble to research the various shareholdings of Mr John Key, his directorships, and pretends to know all about that when she does not know about the policy and the cost to New Zealanders; does that not prove that this purchase is all about politics and not the good of the country?

Rt Hon HELEN CLARK: I know that the ACT party does not give a damn about sustainability or about having a sustainable transport system. I know the ACT party is ideologically opposed to public ownership. That and nothing else explains Mr Hide’s hysteria.

Rodney Hide: I raise a point of order, Madam Speaker. It is very interesting to hear the hysteria of Helen Clark about me. I thought the issue was more about the hysterical response from the Labour Party to questions about rail. But frankly, there is no way that personal remarks about me from the Prime Minister address the question that I asked—which proves the point.

Madam SPEAKER: The Prime Minister did address the question, but if she wants to add anything more, she is perfectly entitled to do so.

Accident Compensation—Privatisation

2. Hon PAUL SWAIN (Labour—Rimutaka) to the Minister of Finance: Has he received any reports on privatisation of the accident compensation scheme?

Hon PHIL GOFF (Associate Minister of Finance) on behalf of the Minister of Finance: I have seen a report from *Merrill Lynch that suggests that if National becomes the Government, it would move quickly to privatise the Accident Compensation Corporation (ACC)*. Merrill Lynch said that that will really benefit Australian insurers. It will lift their earnings by about $200 million.

It goes on to say that although National is careful about its public comments, it is “giving the insurance industry a strong message that privatisation is the likely outcome if it wins the next election”. John Key should come clean about what he is telling his old company and what he is owning up to to the New Zealand public.

Hon Paul Swain: What else is revealed in the report?

Hon PHIL GOFF: The Merrill Lynch report goes on to state: “While the National Party has made no formal statement on its plans for ACC, informally, however, we understand the National Party has been very clear in saying it will privatise the ACC.” That sounds pretty much like the

National Party of old that told American *congressmen that the nuclear-free policy would be gone by *lunchtime, while telling the New Zealand public that it had no plans to change the policy. It is also consistent with the advice followed by the National Party—as revealed in leaked emails published in *The Hollow Men—that it not say anything in public about what its real agenda might be, if it would frighten the public.

Hon Bill English: Can the Minister tell us whether it is any surprise to him that an Australian business might think that any New Zealand Government was a soft option, when yesterday the Labour Government wrote out a $900 million cheque to an Australian company for a rail business that the Government itself says makes no money?

Hon PHIL GOFF: No, but I am sure that that business expressed some amazement that National would want to privatise the New Zealand accident compensation system in favour of an Australian-style system, when Australian levies are 2½ times those faced by New Zealanders.

Hon Paul Swain: Has the Minister received any reports— Gerry Brownlee: That guy was going to be our Mr Bolger.

Simon Power: He’s our new chairman.

Hon Paul Swain: I never liked the “Great Helmsman”.

Madam SPEAKER: Would the member start again, please.

Hon Paul Swain: Has the Minister received any reports on the direct cost of the privatisation of Government-owned operations?

Hon PHIL GOFF: Yes, I have. In fact, it was revealed at the Finance and Expenditure Committee last month that, when in Government, Bill English spent $45.7 million in 1 year on advice on how to sell State assets—$45.7 million of New Zealand taxpayers’ money went down the drain. Again, it is somewhat interesting that of that $45.7 million, nearly $5 million went to Merrill Lynch. To do what? To help sell *Auckland International Airport.

Rt Hon Winston Peters: If the Insurance Council of New Zealand* is a subscriber to a political party’s coffers and gains from it a commitment to privatise ACC after the next election, what do we call that, if not venal, corrupt politics?

Hon Bill English: I raise a point of order, Madam Speaker. That member is an experienced member and knows that it is out of order to imply that someone in the House is influenced by factors outside the House.

Hon Trevor Mallard: The member certainly raised that as a possibility; he did not state it as a fact. I think there is room for the Minister to answer the question properly.

Rt Hon Winston Peters: Just because the truth hurts is no reason for someone to object in this House. Let me say this: the Insurance Council of New Zealand is a subscriber to the National Party’s coffers. Those members know it, and I— Madam SPEAKER: That is not speaking to the point of order.

Rodney Hide: That is not correct. The Minister has no responsibility for what Mr Peters raised.

And Mr Mallard is wrong, because if he were right, we would be able to raise as a possibility that Mr Peters is a tired old drunk, and we are not allowed to say that.

Madam SPEAKER: The Standing Orders make it clear that members cannot state that someone is under the influence of someone else for profit. However, if there is, in fact, an implication and a general question relating to that, but not a direct allegation, then if members look at our Standing Orders as to what can be asked in questions, they will find that they can actually seek opinions, etc., but they cannot make a direct allegation. I would like the member to think again and rephrase his question so that we can all be clear about it.

Rt Hon Winston Peters: Is the Minister aware of the **money-for-questions fiasco and scandal in the British Parliament, and what is the consequence of a political party taking money from an outside body in return for promising that it would deliver a specific policy—one that National has tried before, when it was last in Government—and what do we call that? Hon Bill English: I raise a point of order, Madam Speaker. In the first place, the Minister has no responsibility for the British Parliament, but, in the second place, that is no different from our saying that because Toll Holdings gave Labour $25,000, Labour wrote it out a cheque for $900 million.

Rodney Hide: Of course, we still have the problem of New Zealand First not explaining where all its money has come from.

Madam SPEAKER: That is not a point of order. In the context of the questions that were asked in the supplementary questions, I think an opinion was sought. Although the Minister has no responsibility, obviously, for what happens in the British Parliament, the question was not only about that; it related to the substance of the question.

Hon PHIL GOFF: I am aware of the money-for-questions scandal in the United Kingdom, and I am aware that New Zealanders would be totally hostile to the thought that the National Party would be paid money by donors who, in return, expected, then were given, a *milch cow in the form of a privatised Accident Compensation Corporation. Let me quote something to the House, because I notice that Pansy Wong has said the National policy is not secret. During the 2005 election, the Insurance Council of New Zealand put out a memo that was leaked; the memo stated that the details of privatisation had been deliberately kept out of the announcement, after consultation with the council. That is further evidence of the very allegations—the serious allegations—made in The Hollow Men about corrupt practices, including within the National Party, and its policy of not revealing what its true agenda is.

Hon Bill English: I raise a point of order, Madam Speaker. The Minister is a long-serving member of Parliament, and he knows he cannot make allegations of corruption about any member of this House.

Madam SPEAKER: Yes. I think the member should withdraw that allegation.

Hon PHIL GOFF: I withdraw.

Madam SPEAKER: And apologise—withdraw and apologise.

Hon PHIL GOFF: I apologise.

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. Mr Hide made a comment, under the guise of a point of order, that I expected you to pull him up on. I want to give him a chance now to apologise to me in this House. If he does not, then I am going to tell the House the truth about him, which I have hitherto kept to myself. He can laugh and giggle; this is his last warning.

Rodney Hide: I am now unable to apologise, because if I did it would look like I was being blackmailed and Mr Peters had something on me that was true.

Madam SPEAKER: Some members are given to raising points of order that are demonstrably not points or order but points of debate. I warn members to desist from that, because it does create disorder in the House.

Hon Bill English: I raise a point of order, Madam Speaker. There was, I think, another, more serious issue in the exchange you have just heard. It is a convention of this House that we do not allow members to, effectively, blackmail other members, and what you have just heard is a very direct attempt by the leader of New Zealand First to get up in the House and say that if a member does not apologise, he will reveal personal details about him. That is certainly out of order. Madam Speaker, if you allow that kind of comment to stand, then it opens the door to a whole range of coercive statements being made in this House that up until now have not been able to be made.

Hon Trevor Mallard: Madam Speaker, you will see, if you look at the Journals of the House of Commons in the time of Winston Churchill, that the threat that if someone continues to tell lies about a member, the truth will be told about him or her is an honourable tradition in the Westminster system.

Rt Hon Winston Peters: Some members in this House think they can have a free hit regardless of the facts and get away with it. All I am saying to Mr Hide is that he has a chance to apologise or take the consequences. The difference is that I will stop telling the truth about him if he stops telling lies about me.

Madam SPEAKER: I think that, in the context of the exchanges, I did not take it as a blackmail threat in the way in which the allegation has been made. However, I would say to members that what happens, as I said before, when interjections are made, or when points of order are made that are not points of order but could be interpreted as points of abuse, is that responses are made that are inappropriate. So I would ask all members to desist from that, and to allow us now, at half past 2, to proceed to question No. 3.


3. Hon BILL ENGLISH (Deputy Leader—National) to the Minister of Finance: What were the findings of the Auditor-General’s performance audit of ONTRACK?

Hon TREVOR MALLARD (Associate Minister of Finance) on behalf of the Minister of Finance: The report shows very plainly that *ONTRACK still has more work to do to help manage the national rail network out of the mess it was in before the Government rescue 4 years ago.

ONTRACK is taking the report seriously, as will the new KiwiRail** board, led by Jim Bolger, who will guide the reorganisation of the now fully public system.

Hon Bill English: Can the Minister confirm that the Auditor-General’s report concludes that after almost 4 years and the expenditure of $200 million of taxpayers’ money, ONTRACK still cannot form a clear picture of the state of the rail network, that its staff are confused about its accountabilities, that it is running three different business units that cannot coordinate around the same railway track, and that the Auditor-General therefore cannot determine whether the management of the track has been effective?

Hon TREVOR MALLARD: Further to that, *ONTRACK’s most pressing concern when taking over the tracks was to urgently address track safety issues. The failure of Tranz Rail* to maintain the system left tracks unsafe throughout New Zealand. Fixing collapsing bridges had to be the No. 1 priority, and that was all as a result of Tranz Rail’s only focus seeming to be on stripping the asset down, closing lines, and selling it off, and not keeping it safe and planning for its development. The House knows that ONTRACK has never received the funding it needed from *Toll, due to Toll’s failure to agree to pay its required contribution under the *National Rail Access Agreement, and those years of battling with Toll have been an unwelcome distraction to ONTRACK. Now, with the rail system fully in public ownership, there will be significant efficiency gains. Jim Bolger and the **Rail Development Group will study the Auditor-General’s report with interest. It is a very timely report. The one point I will make at the end is it is likely that with the rolling stock we will find similar problems as the Auditor-General has found in this area.

Russell Fairbrother: What does the *Auditor-General’s report show about New Zealand’s experience with the privatisation of New Zealand’s rail network?

Hon TREVOR MALLARD: One of the main problems *ONTRACK faced after the rescue of the rail network was that *Tranz Rail had virtually zero formal asset planning. That was probably because of the approach promoted by John Key, as an advisor and a shareholder. That approach was to strip it down and sell it off.

Hon Bill English: Can the Minister confirm that his version is not actually what the Auditor- General says, which is that when ONTRACK assessed the state of the network “the information was sometimes incomplete, or used different or unclear assessment criteria. It was not always apparent what conclusions could be drawn from the information.”, and that the assessment by ONTRACK “did not include a clear description of the rail network’s assets.”—which means that ONTRACK has no idea where it started, no idea where it has got to, and no idea what it has done in between?

Hon TREVOR MALLARD: I think that the bit up to “which means” is essentially accurate.

But the reason for that is that ONTRACK quite properly took *on board safety issues. It fixed the bridges that were going to fall down and the rails where trains were likely to be *derailed at large risk to the safety of both drivers, and passengers on some trains. Frankly, heading towards that sort of priority is defensible. The fact that it did not get on with proper future planning is mainly a result of being *far too focused on its battles with *Toll around access fees.

Hon Bill English: Can the Minister tell members why we should not be surprised that the Auditor-General’s inquiry into an organisation that regards itself as a Government department— which the Government pours hundreds of millions of dollars into, hoping that something will happen—has found that the organisation’s maintenance and renewal work is *short term and reactive, that it has not identified the resources it needs or the constraints it faces, and that one of the reasons the maintenance of tracks is delayed is that the hours that its crew chooses to work happen to be the hours when the train tracks are busiest, so it is hard to get much done?

Hon TREVOR MALLARD: What is absolutely clear to everyone is that the privatised *Tranz Rail system failed to deliver proper planning. We are through that now, and I look forward to the National Party eventually folding on this one and saying that it will keep it, too.

Hon Bill English: Why does the Minister claim that Labour is through the stage when there was no proper planning, when the *Auditor-General’s report of about 60 pages goes into great detail about how there is no proper planning, after the expenditure of $200 million on ONTRACK, which has turned out to be a very poor performer?

Hon TREVOR MALLARD: Spending $200 million stopping bridges falling over and straightening rail is not a waste of money. The member should read the report carefully and see that much of what it is in it is in fact dated.

Accident Compensation—Alternatives 4. DARIEN FENTON (Labour) to the Minister for ACC: What reports has she received comparing the accident compensation scheme with Australian alternatives?

Hon MARYAN STREET (Minister for ACC): I have received one report from *PricewaterhouseCoopers, which states that the *Accident Compensation Corporation (ACC), under its current Government monopoly, “can be considered to be ‘best practice’ when compared to international schemes.” The other report came from *Merrill Lynch, which states that ACC costs have been “low, relative to comparable schemes in Australia”. Despite the evidence, National is still secretly telling insurance companies that ACC is up for grabs.

Darien Fenton: Has she seen any reports on how competitive accident compensation levy rates are?

Hon MARYAN STREET: Yes. A report from *PricewaterhouseCoopers noted that the average accident compensation *employers’ levy is two and a half times cheaper than levies under Australian schemes. We also know that the average employers’ levy is now much cheaper under our public scheme than it was under National’s failed privatised model— dropping from $2.14 in 1999 to $1.26 currently. Again, despite the evidence that the accident compensation* scheme is cheaper, National is still leading employers to believe that they will get cheaper levies under privatisation.

Hon Bill English: Can the Minister confirm that the facts about the accident compensation scheme that are included in the 2008 Budget show that its future liability, as assessed by the Government, will increase from $17 billion this year to $26 billion in just 5 years’ time, and that because the Government has been running the scheme inefficiently, extending the coverage and keeping the levies down, there is a huge cost problem ahead of all of us in dealing with a $9 billion increase in the future liabilities of the scheme?

Hon MARYAN STREET: What I can confirm is that if any part of the scheme were to be privatised, there would be a cost explosion for every levy payer* in this country.

Darien Fenton: Has the Minister seen any reports about who stands to gain from National’s planned privatisation of accident compensation? Hon MARYAN STREET: Yes; it is certainly not the public. As noted by PricewaterhouseCoopers, without the scheme, roughly 70 percent of current accident compensation clients would have to rely on social security and the health system alone. The Merrill Lynch* report noted that private insurers stand to make a huge profit. I recall for the benefit of this House that Murray McCully, when accident compensation was being privatised in 1998, stated: “Insurers, like everyone, are in business to make a buck.” Just whose interests does National have at heart here?

Peter Brown: Madam Speaker—

Gerry Brownlee: Except for the Government’s **KiwiRail—they’re not in business to make a buck!

Peter Brown: This question is about accident compensation, I say to Gerry. Does the Minister accept that our accident compensation scheme is far from perfect when it comes to dealing with mature working New Zealanders—certainly, when they become accident victims—and can she advise whether the Government has any plans to address the concerns of these people, noting that they pay their taxes, they pay their accident compensation levies, and many are treated very unfairly?

Hon MARYAN STREET: I say to the member that there is always room for improvement. In fact, he would recall that just last week we were debating improvements to the accident compensation scheme, none of which the National Party supported.

Defence Force—Housing Allowances

5. Dr WAYNE MAPP (National—North Shore) to the Minister of Defence: Why did he say on Sunday that he did not know anything about the practice of Defence Force personnel seconded to the United Nations double-dipping on housing allowances, given that he approved answers to the Foreign Affairs, Defence and Trade Committee that stated “it has become apparent that there have been inconsistencies … relating to housing assistance provided by the NZDF to personnel seconded to the UN.”, and that “The NZDF has suspended the provision of housing allowances to UNseconded personnel.”?

Hon PHIL GOFF (Minister of Defence): Because my answer was accurate. The core issue relating to the *New Zealand Defence Force payment of housing allowances to officers seconded to the United Nations is whether it constituted a deliberate breach of the United Nations rules. That is a serious issue. Neither the questions asked nor the replies drafted in response to the select committee, which the member referred to, saw fit to make it clear that the real issue was a breach of the UN* rules, rather than simply a question of administrative practice. That was pure political gamesmanship by the member. When I became aware of what the actual issue was, I acted immediately earlier this week to have it resolved and to ensure accountability for any wrongful actions.

Dr Wayne Mapp: Does the Minister agree with the Prime Minister that it is “completely intolerable” for senior military staff to be *double-dipping for both UN and NZDF housing allowances; if so, why has he and the Prime Minister allowed this practice to occur since 2001?

Hon PHIL GOFF: I agree that if an action is deliberately taken contrary to UN* rules by the *New Zealand Defence Force or personnel therein, that is quite intolerable. It is absolutely unacceptable, and the **Court of Inquiry that is being set up will determine what happened and who was responsible and the *Chief of Defence Force will act promptly in response to the report of that Court of Inquiry.

Jill Pettis: Is the Minister confident that a Court of Inquiry is an appropriate means to deal with this issue?

Hon PHIL GOFF: Yes. Courts of Inquiry are used by the New Zealand Defence Force to inquire into serious matters relating to conduct involving Defence Force personnel. They are established by Act of Parliament and they exercise significant powers not unlike those of a court of law. The Court of Inquiry has the power to summons witnesses to give evidence under oath, and a failure to cooperate with a Court of Inquiry is punishable as contempt. In my view, therefore, a Court of Inquiry is appropriate for this task. That said, if, after the Court of Inquiry reports, I am not satisfied that it adequately answers the issues, I have the option of referring the matter to the State Services Commission*.

Dr Wayne Mapp: Why did the Minister sign off an answer to a question stating that personnel are required to declare to the UN any salary or allowance from New Zealand, given that the Defence Force allowed seconded officers to the UN to falsify documents telling the UN they were not getting allowances from New Zealand when, in fact, they were?

Hon PHIL GOFF: I am informed by the Defence Force legal staff that the answer I signed off is accurate. What the answer did not express, and what the member, in setting the question—having been primed to do so by the aggrieved party who has just suffered a conviction and a court martial*—never pointed out, was that the issue was allegedly that the New Zealand Defence Force had deliberately acted contrary to the rules set out by the United Nations. The Court of Inquiry will establish the truth there and, having established the truth, the Chief of Defence Force will act appropriately in response to that.

Dr Wayne Mapp: Why did the Chief of Defence Force allow the prospect of court martial charges against *Colonel Heaton relating specifically to the housing issue to proceed for at least 9 months—it was finally dropped a few days ago—when it was clear that five other New Zealand Defence Force officers had claimed the same housing allowances, and their actions had carried the full endorsement of senior officers of the Defence Force?

Hon PHIL GOFF: Very clearly, the New Zealand Defence Force did not proceed with the charges relating to housing allowances because the New Zealand Defence Force acknowledged that it was its own policy, or the carrying out of that policy, that was at fault. The member this morning on radio was at pains to defend the person who was court-martialled*. I have to say that he pleaded guilty to the charge of deliberately and illegally not paying tax on alcohol and cigarettes. You might think that that is acceptable, Dr Mapp. It is not acceptable to the Defence Force, nor is it acceptable to me—

Hon Bill English: The member is an experienced member and he should know that he cannot address you in that way.

Madam SPEAKER: Yes, I think members are getting carried away with themselves. I ask that they please address just the questions.

Dr Wayne Mapp: Did the *New Zealand Defence Force let New Zealand down by knowingly and deliberately breaking UN rules, given that a New Zealand Defence Force spokesman has stated publicly: “We were aware that there was a difference between how the UN wanted to apply the rules and how we wanted to apply the rules.”, yet despite this the New Zealand Defence Force continued to allow the double-dipping?

Hon PHIL GOFF: The Court of Inquiry will determine the answer to that question. That is why it has been set up. If the answer to that question is that various personnel did deliberately act in breach of the UN rules, I will expect disciplinary action to be taken against them. However, in this House or anywhere else, until that Court of Inquiry reports, these are allegations that will be inquired into. When there is a conclusion on that, that conclusion will be acted upon by the Chief of Defence Force.

Hon Dr Nick Smith: So the member knew about it?

Hon PHIL GOFF: The member who interjects is wrong. I did not know about that. He is therefore misleading the House and he is challenging my word in answering that question. I have been here long enough to know that Ministers mislead the House at their own peril. I have never done that and I am not doing it now.

Dr Wayne Mapp: Is the Minister telling the House that Defence Force officials failed to brief him on the double-dipping issue, despite them providing answers to his office and to the select committee on precisely the UN housing issue, knowing that a high-profile court martial was on the way; and, if that was the case, was it because they were incompetent—or were they trying to set up the Minister?

Hon PHIL GOFF: The member is getting really carried away now. I was not briefed on that issue, nor could I tell from the carefully disguised questions put in by the member who raised this question what the actual issue was. He was raising that question because it was taken up with him by the person facing the court martial. I was not even aware that the housing allowances had anything to do with the court martial charges and, in the end, they did not. The person convicted by the court martial, who pleaded guilty, was guilty of defrauding the US Treasury of more than $1,000. The US Treasury raised that with the New Zealand Government and said that given that this person had immunity, it expected New Zealand to respond to that breach of its law with our law, and that is indeed what the court martial did. The member should not continue to defend the person who knowingly broke the United States law.

Dr Wayne Mapp: I seek leave to table answers from the Minister’s office to the *Foreign Affairs, Defence and Trade Committee, firstly in response to questions asking what arrangements, in relation to salary and allowances of— Madam SPEAKER: Leave is sought to table those documents. Is there any objection? Yes, there is objection. [Interruption] Order! Members will be heard in silence on points of order.

Dr Wayne Mapp: I seek leave to table a question asking what UN rules apply to the payment of housing allowances.

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

Dr Wayne Mapp: I seek leave to table questions to the Minister’s office asking what New Zealand Defence Force rules apply to the payment of housing allowances to seconded officers.

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

Dr Wayne Mapp: I seek leave to table a question and answer in relation to what informal guidance had been given to seconded Defence Force officers in relation to the receipt of UN housing allowances.

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

Hon PHIL GOFF: I raise a point of order, Madam Speaker. Is it appropriate for a member to ask to table documents that are already on the *Table of the House because they are written answers to questions?

Madam SPEAKER: Unfortunately members do it regularly.

Question No. 1 to Minister

JOHN KEY (Leader of the Opposition): I seek leave to make a personal explanation in relation to statements raised by the Prime Minister in question No.1.

Madam SPEAKER: Leave is sought. Is there any objection? There is objection. [Interruption] I call question No. 6, the Rt Hon Winston Peters. [Interruption]

Rt Hon WINSTON PETERS (Leader—NZ First): Well, we did tell National. [Interruption] Yes, tit for tat now. My question is to the Minister of Finance—

RODNEY HIDE (Leader—ACT): I raise a point of order, Madam Speaker. We have just heard the leader of New Zealand First explain, by way of opening his question, the refusal—which is pretty extreme; to have a series of allegations made against the Leader of the Opposition, who then came down here to make a personal explanation, and for him to be refused to be allowed to do that by New Zealand First member Ron Mark. The leader of New Zealand First—who happens also to be in charge of the country’s diplomacy—has just stood up and said—

Madam SPEAKER: I understand; I am sorry. Please be seated. That member knows that every member is entitled to object when leave is sought. Leave was sought. There was an objection made. That is the end of the matter. Anything else is a general debate, which is coming up. All members will have an opportunity to debate the matter there.

RODNEY HIDE (Leader—ACT): I raise a point of order, Madam Speaker. That was not my point of order. My point of order is that Mr Peters said the objection was somehow tit for tat, so what you are having is actual blackmail being used across the House— Rt Hon Winston Peters: Rubbish! Sit him down, Madam Speaker.

RODNEY HIDE: Well, they can interrupt on the point of order as much as they like, but that is exactly what it is.

Madam SPEAKER: I understand the member’s point, but emotive language is not a question of blackmail. It might have been an inappropriate comment, but members are free to deny leave— every single member. What flows from that is another matter, but members have that right. It was exercised. That right is therefore not challenged in that context.

Rt Hon WINSTON PETERS (Leader—NZ First): I raise a point of order, Madam Speaker. Because we need to make some progress on this, the reality is that my colleague Ron Mark sought leave the other day to make a personal statement—

Ron Mark: A while back.

Rt Hon WINSTON PETERS: —a while back, rather; the National Party denied him. It was told then the consequences of doing that sort of thing. National members never sought a reason why he wanted to speak; they just did it. We are not like them, but we are prepared to say: “You come and talk to us and we’re prepared to go along with it.” But they were told that that is what happens in this House.

Madam SPEAKER: That is all very interesting, Mr Peters, but it is not part of question time and it is not a point of order. There is a general debate coming up and you can talk about it there, at your leisure.

GERRY BROWNLEE (National—Ilam): I raise a point of order, Madam Speaker. You, of course, will be more familiar with *the Standing Orders than the rest of us, and I am sort of scratching around trying to find my copy. But there is a provision, although I cannot find it at the moment, that if a member has been discredited in some way, then the member need not seek leave of the House to make a personal explanation, because that personal explanation process is about someone explaining something about what he or she has done. But if there is a misrepresentation, or other, in a Standing Order, and I know that you will be familiar with it, my understanding is that a member has a right to respond to the allegations inappropriately levelled at him or her by another member.

Hon HARRY DUYNHOVEN (Minister for Transport Safety): This is by no means a precedent. It has certainly happened in the past in the House, and it has happened to me when members of the National Party refused exactly what they are objecting to.

Madam SPEAKER: We do not want reminisces of personal experiences about being denied leave, but I thank the member—[Interruption] Misrepresentation as Mr Brownlee raised arises in debate. This is question time, though it is turning into more like a debate. Could we please return to question time.

GERRY BROWNLEE (National—Ilam): I raise a point of order, Madam Speaker. May I take the opportunity to point out an opportunity for you, because *although this most certainly is question time it is not uncommon that debating matters are introduced during question time. The point that I would also make to you is that anything that is put into the record by way of a question from this side has to be verified, if it is a question for oral answer, at the time it is lodged in the morning, and then when the supplementary questions come you are very, very cautious, and contain the House to speaking about matters that relate only to the question. Now where there has been clear misrepresentation made in an answer, it would take only a ruling from you to apply Standing Order 106 to the question time situation and that would not be bad for order in the House. Hon DARREN HUGHES (Deputy Leader of the House): Standing Order 106* is about misrepresentation taking place in the debate. As you are trying to point out to the House, we are meant to be having question time right now, and that does not apply in this situation that the member is referring to.

GERRY BROWNLEE (National—Ilam): For the benefit of the Hon Darren Hughes, I know.

But I am saying that the Speaker has the role of interpreting the Standing Orders. If the Speaker rules that this Standing Order 106 can apply to question time, it can. So it is an appeal to the Speaker to do that in the name of fairness, otherwise the lies perpetrated by the Prime Minister— Madam SPEAKER: Would all members please be seated. Now what, in effect, Mr Brownlee is asking is for the Speaker to usurp the decision of the House. This is not a Speaker who is going to do that. The House has spoken, it is your House, the Standing Orders are yours, I am merely here to apply them. If Speakers start working independently on that, then goodness knows where it will all lead. So we have interpreted that, and, as I said, the—[Interruption] If that member wishes to remain in the Chamber he will desist until I am seated and have finished speaking. That goes for all members, please. Now that Standing Order does relate to debate, and it is a serious issue, and I can understand why Mr Brownlee raised it. However, today there is an opportunity for a general debate and I am sure these matters can be appropriately and fully aired then.

JOHN KEY (Leader of the Opposition): I seek leave to table a press release I issued on 18 June 2003. The press release is the one that the Prime Minister referred to and can I assure her that neither I nor my family trust was an owner of shares in Tranz Rail at that time, and she has misled the House.

Leave granted.

RODNEY HIDE (Leader—ACT): I raise a point of order, Madam Speaker. In light of that, maybe the Prime Minister will take the opportunity to issue an apology.

Madam SPEAKER: Would the member please be seated. That is not a point of order. One more intervention that is not a point of order, and that member will be asked to leave the Chamber because he is creating disorder.

Hon BILL ENGLISH (Deputy Leader—National): I raise a point of order, Madam Speaker. I can understand your frustration about points of order being raised that are not points of order, but I must say that I think almost the whole House would regard it as somewhat unfair if that member were ejected when it is the habit of this House to tolerate an endless stream of non - points of order from Winston Peters. I am just asking that, as you consider the next point of order Rodney Hide may make, you take into account the way Mr Peters has been indulged.

Madam SPEAKER: Yes, I will take into account all members who are in the habit of raising points of order that are not points of order. I will operate fairly on that basis.

Rt Hon WINSTON PETERS (Leader—NZ First): I raise a point of order, Madam Speaker.

When you gave your ruling to Rodney Hide he sat down and said: “One rule for some, another rule for others."

Anne Tolley: He did not.

Rt Hon WINSTON PETERS: That is what he distinctly said. We heard him. Now he can tell you the truth or he can behave as he always does.

RODNEY HIDE (Leader—ACT): That is a total lie from the Rt Hon Winston Peters.

Madam SPEAKER: We are not getting anywhere with this. Could we please continue with question time—[Interruption] I could ask many people to leave the Chamber at this stage for making points of order that are not points of order. We would certainly get through question time more quickly if that course were followed. So members—all members—are on their last warning. Reserve Bank—Monetary Policy

6. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Finance: Will the results of the Reserve Bank initiative to pursue “options for alternative instruments” for monetary policy be made publicly available; and at whose behest was the addition of this initiative in the Reserve Bank’s latest statement of intent?

Hon TREVOR MALLARD (Associate Minister of Finance): on behalf of the Minister of Finance: Yes, and the addition of the initiative arose out of discussions between the Minister of Finance and the *Governor of the Reserve Bank.

Rt Hon Winston Peters: Can the Minister confirm that this is new, and will the options for alternative instruments include taking into account the balance of payments, exports, GDP growth, and full employment as equally important elements as controlling inflation, as identified in a *Business and Economic Research Ltd study of June 2008; if not, why not?

Hon TREVOR MALLARD: I think it is too early to anticipate what will be included, but what is clear is that when it was introduced the inflation target was appropriate for the newly independent Reserve Bank of New Zealand to have a single inflation-focused objective. However, the economy has changed a lot in the last 20 years: the major sources of inflation are different, and we have a much more open economy. Over recent years the Reserve Bank has been faced with two quite different monetary policy challenges. For a number of years, under both governors, inflation has been driven by increased domestic demand that stems from a buoyant housing market, fuelled by cheap foreign capital attracted by a stable economy and relatively high interest rates. Now we have inflation challenges driven by record high international prices of food and oil. In both cases the tools available to the Reserve Bank have not been able to address those problems. In fact, in the first case it could be argued that they exacerbated the problem. The Government is open to looking at alternatives that best serve the modern New Zealand economy.

Moana Mackey: Is the Government open to proposals to improve the operation of monetary policy?

Hon TREVOR MALLARD: Yes. That is why we commissioned the *Supplementary Stabilisation Instruments report from Treasury and the Reserve Bank. When it became clear that it would not be possible to get political consensus around any of those proposals, we invited the Finance and Expenditure Committee to conduct an inquiry into monetary policy involving all political parties. But at every step the National Party, and especially Bill English, have done all they can to derail and disrupt attempts to obtain political consensus around this very important economic issue.

Rt Hon Winston Peters: Will the Minister confirm what New Zealand First has said for a long time: that the Reserve Bank Act simply does not work for this economy; and is he aware that the Bank of England recently allowed inflation to exceed its targeted range, stating that an attempt to counter a rise in food, energy, and import prices would result in “unnecessary volatility in output and employment”; and given our Reserve Bank estimates that 90,000 New Zealanders must lose their jobs over the next 3 years if we are to meet the inflation targets by using tight and high interest rates, does he accept that 90,000 job losses, with possibly 250,000 dependants losing their income, and 1 percent to 1.5 percent GDP growth are merely collateral damage?

Hon TREVOR MALLARD: My position on this is that the *Reserve Bank of New Zealand Act has not worked as well in the last decade as it did in the first.

District Health Boards—Changes to Services

7. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: Why are lower North Island district health boards planning a drastic proposal to downgrade regional hospitals in the lower North Island and to “cluster” acute services in Wellington and one other site?

Hon DAVID CUNLIFFE (Minister of Health): The lower North Island district health boards are not planning drastic downgrades to regional hospitals as the member suggests. They are simply working together to think about how they can better ensure that everyone in the region has the best possible health care. I note that the National Party’s own health discussion document argues that “Better networking and cross-boundary DHB cooperation can concentrate expertise and improve efficiency and quality.” That is exactly what the district health boards are considering doing.

Hon Tony Ryall: Why will the Minister not be open with the public of New Zealand, when Labour promised never to downgrade a hospital yet here is a secret Labour plan to axe health services in the lower North Island and make people travel for hours to get even basic care—or is it all a “factual misunderstanding”?

Hon DAVID CUNLIFFE: It is one thing for the National Party to copy popular Labour policies like regional shared services and clinical networks; it is quite another for it to invent unpopular policies like closing entire district health boards, which is not the policy of this Government but, instead, comes from the member’s own discussion document, which states: “It is inefficient and inhibiting to have 21 DHBs …”.

Barbara Stewart: Can he assure us that any moves to regionalise services will not further disadvantage *Kenepuru Hospital and the more than 100,000 people who live in its catchment area; if not, why not?

Hon DAVID CUNLIFFE: I can confirm that no proposals have been received by me for the Cabinet process, following the consideration by the district health boards, so I have not yet been briefed on what recommendations are coming through. But it is my view that Kenepuru Hospital plays a vital role in the regional network of primary and lower-end *secondary-care facilities.

Lesley Soper: What alternative approaches to the provision of health care services has the Minister seen?

Hon DAVID CUNLIFFE: I have seen a proposal to return to the privatisation of health services model that failed in the 1990s, and to something other than the current accident compensation scheme. Under this proposal “There is actually no reason why the State couldn’t contract to the private sector all of the, say, cataract operations required, or all of the hip operations.” Surprise, surprise, those are the exact words of John Key, and are proof, if ever more were needed, that National’s true agenda, the one that it has hired *Crosby/Textor to hide from the public, is to privatise public services. Rail, accident compensation, health, energy—where will it stop?

Hon Tony Ryall: When did the Minister first receive a draft copy of a central district health boards’ plan that listed the number of services that would be cut from regional hospitals in that region; and what other secret plans is Labour working on to axe hospital services in other parts of the country, while the public is being kept in the dark?

Hon DAVID CUNLIFFE: I can confirm to the member that I cannot afford to hire Crosby/Textor, so I do not know what tactics that firm suggests—but I do not use them. If the member thinks the district health boards are all cronies of the Labour Party, he should visit the Hawke’s Bay board.

Hon Tony Ryall: Can the Minister confirm that the report says that, across the six lower North Island district health boards, 35 clinical departments face staffing shortages, maternity services are in crisis, most boards are deeply in debt, and costs are spiralling out of control; and that Labour’s only answer, after 9 years in Government, is a secret plan to axe health services in the lower North Island, as was revealed today on the front page of the Dominion Post?

Hon DAVID CUNLIFFE: Repeated assertions of the fantasies of the member do not make them facts. There is no secret plan. The district health boards are consulting on some internal workings, and they have not yet gone through the Cabinet process.

Hon Tony Ryall: Why has Labour ignored the repeated warnings about the crisis in maternity services in Wellington and around the rest of the country, and how many more tragedies will there be before the Government realises that what is needed is action, not another report? Hon DAVID CUNLIFFE: It is somewhat ironic to hear the member opposite describe the Government’s actions as too little, too late, when it took him the best part of 24 hours to put out a rather stupid rehash of a press release on the matter.

Hon Tony Ryall: Does the Minister not realise that in the last 9 years there have been endless reviews of maternity services, and that setting up another review will do nothing to reassure the mothers of New Zealand that they and their babies will be safe?

Hon DAVID CUNLIFFE: On the substantive point, which was not part of the member’s primary question, I am happy to repeat to the House that the purpose of the review that I have set up is to investigate whether the interface between district health board - provided in-hospital maternity services and those provided outside district health board hospitals by non - district health board lead maternity carers is an issue that requires action. The purpose of the review is to ascertain whether we need to take further steps to ensure public safety and confidence. I would have thought the member would join with Labour members in thinking that that was an appropriate thing to do.

Agriculture and Forestry, Ministry—Draft Water Safety Standard 8. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Agriculture: Why did the Ministry of Agriculture and Forestry make a submission to Horizons Regional Council opposing a draft standard requiring all rivers and streams in the Manawatū-Wanganui region to be safe for swimming?

Hon JIM ANDERTON (Minister of Agriculture): The Ministry of Agriculture and Forestry did no such thing. Its submission to the proposed plan of *Horizons Regional Council was very supportive of the restoration of waterways. The section the member is concerned about starts by stating: “MAF supports the sustainable water programme of action outcome to improve the quality and efficiency of fresh water by building and enhancing partnerships.” Further on, the submission did state opposition to one clause in schedule D of the proposal, because of a concern that the ambition was unrealistic. These were technical measures that the ministry was commenting on. The submission was withdrawn some months ago, when this issue first came up. It was withdrawn because it was clear that this one clause was being misinterpreted as opposition to a general ambition—an ambition supported by the ministry—to make all waterways clean.

Dr Russel Norman: Can the Minister confirm that the ministry’s submission was withdrawn only after pressure from the Green Party; and can he also confirm that its submission was identical in purpose to the Federated Farmers submission, both of them aiming to knock out exactly the same clause of the draft plan—that is, the clause that aimed to make rivers and streams safe for swimming?

Hon JIM ANDERTON: No, I cannot confirm that—in fact, I can confirm otherwise. The ministry’s submission was withdrawn after senior officials of the ministry determined that that particular clause was not being interpreted properly. I have here the full submission by the ministry.

If there is any relationship between this submission and the Federated Farmers submission, I would be very surprised.

Dr Russel Norman: Has he received any advice that not only were the Ministry of Agriculture and Forestry and Federated Farmers both singing from the same *song sheet but also *Landcorp, the Government’s own company, made a submission also trying to knock out this exact clause—the clause that is aimed at making our rivers safe for children to swim in?

Hon JIM ANDERTON: I have received no such advice, and if the member is going to be here for a little longer, he will discover that it would be surprising to any member of this House, and equally to the ministry and Federated Farmers, to know that we are both singing from the same song sheet.

Dr Russel Norman: Has he received any advice that the Landcorp submission stated “The values, management objectives, and methods used to determine water quality standards do not appear to have been formulated on the basis of robust analysis.”, which seems remarkably similar to the submission from the former Federated Farmers president, *Charlie Pederson, which states: “The values, management objectives, and methods used to determine water quality standards do not appear to have been formulated on the basis of robust analysis.”; and has the Minister sought any advice as to why Federated Farmers and a State-owned enterprise are using exactly the same words in their submissions against clean rivers?

Hon JIM ANDERTON: It may come as a surprise to the member, but I have no ministerial responsibility for Landcorp, nor do I have any ministerial responsibility for Federated Farmers.

Dr Russel Norman: In light of this evidence of cooperation between Federated Farmers, Landcorp, and possibly even the Ministry of Agriculture and Forestry, does the Minister stand by his statement of 31 January: “Claims by the Green Party that the Government has been ‘hijacked’ by Federated Farmers over water policy are simply ridiculous”; and does he agree that if something looks like a hijack, smells like a hijack, and reads like a hijack, then maybe it really is a hijack?

Hon JIM ANDERTON: It would come as a complete surprise to Federated Farmers that the ministry has been hijacked by them, or they have been hijacked by us. I suggest to the member that he takes a little bit of quiet time after getting into Parliament, and breathes through his nose for a while and stops making cheap political points.

Dr Russel Norman: I seek the leave of the House to table the submission from Landcorp on the *Manawatū—

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

Dr Russel Norman: I seek the leave of the House to table a remarkably similar submission from Charlie Pederson—

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

Education, Ministry—Confidence

9. ANNE TOLLEY (National—East Coast) to the Minister of Education: Does he have confidence in the Ministry of Education; if so, why?

Hon TREVOR MALLARD (Minister for the Environment) on behalf of the Minister of Education: Generally, yes.

Anne Tolley: Why, after 3 years of complaining to the Ministry of Education, $24,000 being spent on consultants, three different plans being submitted, and 25 meetings with officials, is **Tiaho School in Wairoa* still in such a state of disrepair that classrooms leak, there is no boiler to heat those leaking classrooms, sewage floods the kids’ playing areas when it rains, and the kids are so disgusted by the smell of their bathrooms that they will not go anywhere near them?

Hon TREVOR MALLARD: The situation at Tiaho School is not acceptable. I am advised that the delays are due in part to lengthy negotiations between the school and the ministry over the scope and cost of a wider school redevelopment project, and they were caused, at least in part, by the inability of the school board to source contractors to get and assess the necessary information. The health and safety issues were first drawn to the attention of the Minister’s office on 14 June. At that stage, neither the local council nor the district health board was aware of the sewage issues at the school. Nevertheless, the Minister of Education has today phoned and written to the school to express his concern about the situation, and he has directed the ministry to give immediate priority to addressing the critical health and safety issues. As much of this work as possible will be completed over the school break, which begins on Friday.

Anne Tolley: Why was the plan that the school submitted several weeks ago— with assistance from the ministry’s local Hawke’s Bay office—for $1.5 million worth of work to make the school a safe and healthy learning environment rejected; and in light of the Minister’s statement, can he confirm the comment of **Paul Burke from the Ministry of Education on television last night that the ministry would not be signing off a cheque for improvements until the end of July, which means another 4 weeks of sewage, leaky buildings, no boiler, and disgusting bathrooms, in the middle of winter?

Hon TREVOR MALLARD: If the member had given the Minister the courtesy of listening to my answer, she would know that her latest question is just stupid.

Gerry Brownlee: I raise a point of order, Madam Speaker. I think you might want to consider whether the Minister did address the question. Simply abusing the questioner hardly constitutes addressing the question. The content of the question was *well-thought-out, it was a reasonable question, and it would be reasonable to expect the Minister to attempt to answer it.

Madam SPEAKER: Please be seated. I listened very carefully. In fact, the second question contained the answer that the Minister had given as to when it was. But if the Minister would repeat his answer, we can then make some progress.

Gerry Brownlee: I raise a point of order, Madam Speaker. With all due respect, the second question pointed to a contradiction between what the Minister had said and what had been said on TV. The Minister should at least have the courtesy to address that.

Madam SPEAKER: I have addressed the point. I have asked the Minister to address the question again.

Hon TREVOR MALLARD: I will try to make it simple for the member. The Minister has directed the ministry to make as much progress as possible during the school holidays. The school holidays—for members who are out of touch—start on Friday. One of the differences between the approach taken by Nick Smith, who was ruled by the ministry, and the approach taken by this Government is that when we say “jump”, it will.

Hon Mark Burton: Does the Minister have any criticism of the ministry’s budgetary performance?

Hon TREVOR MALLARD: Yes, I do. The ministry grossly underestimated the popularity of the Labour-led Government’s policy of 20 hours’ free early childhood education. The latest information shows that funded hours have increased by 7.5 percent since September 2007, and that requires unplanned Government investment of well over $20 million. Meanwhile, I note that the National Party’s latest position is that it would dump that policy of 20 hours’ free education.

Rodney Hide: I raise a point of order, Madam Speaker. I raise it under Standing Order *377. It is something we have seen from the Minister answering for the Minister of Education. Ministers are not allowed to answer a question with *“arguments, inferences, imputations, epithets or ironical expressions”. We have seen a lot of that today from Ministers, but to suggest that someone asking a question is stupid surely is out of order, given Standing Order 377.

Madam SPEAKER: I thank the member. I have dealt with that point of order.

Hon TREVOR MALLARD: I raise a point of order, Madam Speaker. I want to make it clear that I was wrongly advised that the Minister’s office had first been told on 14 June. I am now advised that it was on 24 June.

Anne Tolley: What sorts of systems and procedures does his ministry have, when a school without a viable form of heating, with sewage on the kids’ playing fields and in their courtyards, with leaking classrooms with walls that one can poke one’s finger through, and with toilets that are so stench-ridden that kids will not go near them, has to jump through hoop after hoop after bureaucratic hoop for 3 years before it gets the money—and only after it went on national television to broadcast its plight?

Hon TREVOR MALLARD: I repeat that the first occasion that the school brought the sewage issue to the attention of the Minister’s office, the local council, or the district health board was 24 June this year.

Anne Tolley: Why did the Minister wait 10 days after receiving a letter from the board of trustees, and why has he not visited this school, which is in such dire straits; is it that the Government is much more interested in spending the thick end of a billion dollars on a rail system than it is interested in the learning of kids at a school with running sewage on the fields, no heating, leaking buildings, and an electricity system that blows out when the school tries to run heaters?

Hon TREVOR MALLARD: That is a really interesting question, and I just wonder whether, if the electorate had a half-competent local MP, it would have been drawn— Hon Member: She is the MP!

Hon TREVOR MALLARD: Who is the local MP? Anne Tolley. I wonder whether, if the electorate had a half-competent local MP, the matter would have been drawn to the Minister’s attention. The other point I will make is that I will take that comment as support from that member for the Toll NZ plan to close the Napier-Gisborne line.

Anne Tolley: How many more meetings will there have to be, how many more plans will have to be submitted, how much more red tape will the school have to wade through, and how many more hoops will this school of 240 children have to jump through before it gets money from the ministry to fix its leaking classrooms, its broken boiler, its faulty electricity system, and its overflowing sewerage pipes, which are a health hazard, or is the Minister saying that any school with a problem with sewage need only ring either the Minister or Television One?

Hon TREVOR MALLARD: I have indicated to the member on a number of occasions that the very effective Minister of Education, upon the matter being drawn to his attention, caused the problem to be fixed as soon as possible. If she was half as effective as he is, she would have told the Minister about the issue a couple of years ago, when she became the local MP—if it was an issue then.

Judith Collins: Why does she have to do it?

Hon TREVOR MALLARD: Most members of Parliament visit schools in their electorates when they have issues, and they bring those issues to the Minister’s attention if they are not satisfied with the— Madam SPEAKER: Point of order, Anne Tolley.

Anne Tolley: A supplementary question.

Madam SPEAKER: A supplementary question, Anne Tolley.

Anne Tolley: Does the—[Interruption]

Madam SPEAKER: No, please be seated. The member was on her feet to, I thought, raise a point of order, before the Minister had finished answering the question. I remind members that however anxious they may be to ask or answer a question, the courteous thing to do is to wait for the person speaking to finish.

Anne Tolley: My apologies, Madam Speaker; I thought he was just insulting me. Is the Minister now saying that the three separate sets of plans that this board has submitted to the ministry—it having worked on them with the Hawke’s Bay district office of the ministry over the last 3 years— and the $24,000 that the board has spent on consultants have not been considered, and that all it took to have the drains fixed was for the school go on national television last night with its problem, which resulted in the Minister telling his ministry to act; is that the way that education services in this country are going to be run?

Hon TREVOR MALLARD: No; I was complimenting the member when I made the earlier comments.

Madam SPEAKER: Any further supplementary questions? We move to question No. 10, the Hon Tariana Turia. [Interruption] The member asking a question is entitled to members having the courtesy to listen.

Dail Jones: I raise a point of order, Madam Speaker. How long are you going to put up with being insulted by Gerry Brownlee while he is sitting in his seat? You made a ruling, and you asked for order so that the honourable co-leader of the Māori Party could ask her question. We can hear insults being thrown in your direction. I ask you to do something about, with respect.

Madam SPEAKER: No. I know that it has been a long question time, and I would just ask members to show a little courtesy to each other, so that we can get through it. Gerry Brownlee: I raise a point of order, Madam Speaker. If I have created the impression in the House that I have been disrespectful to you, I offer you my apologies. But your presiding over a series of answers from that Minister that were very, very personally and insultingly directed at another member does not help order in this House.

Hon TREVOR MALLARD: I think challenging a member to be an effective local MP is not insulting.

Madam SPEAKER: Well, that is not— Gerry Brownlee: It is Ministers who are held to account in this House during this particular time of the day, and it is Ministers who should be giving answers to constituent MPs’ questions asked by a spokesperson. It is that Minister who could not answer.

Madam SPEAKER: I understand the member’s point. I have said this before but I will say it again. If members want different answers and a definition of that, then I invite members to please change the Standing Orders. At the moment, a Minister must just address a question. I listen to the questions. Often they are long and involve several thoughts and ideas. Members and Ministers are judged on the questions and the answers that are given. That will be the case here.

Hon Dr Nick Smith: I raise a point of order, Madam Speaker. I ask you to give a considered ruling as to the Minister’s answer to the question from my colleague Anne Tolley about the desperate situation of a school in her electorate. We had an answer that told us about the member’s pedigree, and the last two answers made no reference at all to the question. How does that possibly comply with Standing Order 377, which requires that answers must be given in the public interest? I am not necessarily asking that you give an immediate ruling, but I do think you have a duty to Parliament to ensure that question time is relevant; otherwise, it effectively results in a debacle of which none of us can be proud. [Interruption]

Hon TREVOR MALLARD: Speaking to the point of order—

Madam SPEAKER: No. Be quiet, please, all of you; sit down. It is getting ridiculous. I am very happy to give the member a considered ruling on public interest. Now can we move on.

Moko Skinks—Relocation

10. Hon TARIANA TURIA (Co-Leader—Māori Party) to the Minister of Conservation: What assurances can she give that relocation of the moko skinks from *Whangamata marina site will not affect a species categorised as “sparse” in the North Island skink recovery plan 2002-2012?

Hon STEVE CHADWICK (Minister of Conservation): I can assure the member that any relocation of the moko skinks will enhance their protection. Although the species is categorised as “sparse”, it is widespread, with at least five mainland populations and around 33 populations on offshore islands. There are a number of options for the population discovered at Whangamata in February. My department is in consultation with iwi and is working to ensure that we do the best we can for the skinks.

Hon Tariana Turia: Does the Minister agree with the Department of Conservation’s threatened species recovery plan for skinks, which states that there should be: “high levels of dialogue with iwi”, and what dialogue has there been with Ngāti Whanaunga* and **Ngāti Kupenga o Ngāti Hako, who have opposed the proposed Whangamata marina from the outset?

Hon STEVE CHADWICK: I am advised that because the Department of Conservation *Waikato Conservancy approved an emergency translocation permit, iwi were not initially consulted according to the normal protocol. However, as soon as my department became aware of the iwi concern, skink collection was immediately halted. I regret that iwi were not consulted.

However, I am satisfied that they have now been brought into the process.

Hon Tariana Turia: Is the Minister aware that at the same time yesterday that she was announcing success at saving skinks—for grand and Otago skinks—the tangata whenua of Whangamata began an occupation in a protest action opposing the destruction of the habitat of several rare and threatened coastal bird species and the removal of the moko skink; and when will the people of Whangamata also benefit from success at saving skinks?

Hon STEVE CHADWICK: I am aware of the occupation. The occupation does reflect the strong feelings that iwi have towards the marina development as a whole. My department is focused on working with iwi, as I said, to develop an acceptable solution for the future of the moko skink.

Hon Marian Hobbs: What progress is being made in protecting New Zealand’s indigenous skink species?

Hon STEVE CHADWICK: As the previous questioner noted in her comment about the announcement yesterday, we are making significant progress on recovery plans for the most threatened skinks. Yesterday I announced a major recovery breakthrough with the grand and the Otago skinks, and predator control has led to a dramatic recovery of around 94 percent for a managed population in just 3 years. It can be done.

Hon Tariana Turia: Is it possible that had the *Foreshore and Seabed Act not been passed by the Labour-led Government, the tangata whenua of Whangamata might have been in a stronger position to prevent the privatisation of the coast and to maintain public access and natural values, including the moko skink and its natural habitat, by virtue of having customary rights to the foreshore and seabed?

Hon STEVE CHADWICK: Recognition of iwi interests in the foreshore and seabed is a matter for the Attorney-General. As the Minister of Conservation, I am responsible for decisions around restricted coastal activities. That decision has been made, and my focus now is on the suitable protection of the moko skink.

Emissions Trading—Australia

11. Hon Dr NICK SMITH (National—Nelson) to the Minister responsible for Climate Change Issues: Does he agree that the statement made by the Australian Climate Change Minister **Penny Wong “The introduction of emissions trading will constitute the most significant economic and structural reform undertaken in Australia since the trade liberalisation of the 1980s” also applies to the New Zealand economy?

Hon DAVID PARKER (Minister responsible for Climate Change Issues): The transition away from both oil dependency and high emissions is a reality that the world cannot avoid—and, indeed, should not avoid. It will take some time, but it has started. It is for Governments to ensure that the transition is well managed and affordable, and that is why we are advancing the *emissions trading scheme, which has been widely consulted upon, which will be phased in gradually, and which allows 90 percent free allocation to trade-exposed sectors.

Hon Dr Nick Smith: Will the Minister change his bill to address the *$1 billion - plus in windfall profits to the State through *Meridian Energy and *Mighty River Power, and the $22 billion that the Government will make from the sale of emission permits, in light of yesterday’s announcement by Australian Treasurer *Wayne Swann that Australia’s emissions trading scheme will be revenue-neutral, with any profits to be distributed back to businesses and consumers; if not, will this important difference not further increase the rush of businesses and talent to Australia?

Hon DAVID PARKER: The figures that the member uses count the balance in respect of revenues between Crown and emitters out to about 2030, and are highly speculative. The reality is that the Crown is unlikely to break even on the emissions trading scheme until about 2020. Whether it is positive or negative for the Crown after that point depends on *5-yearly reviews. By then we will have had at least three reviews, and future Governments will determine where the balance lies.

Hon Dr Nick Smith: What does it say about the level of care being taken with emissions trading when at the weekend the *New Zealand Herald reported: “It is an outrage that the select committee took a mere 16 hours to consider more than 60 reports … and was given just three days to consider more than 1000 amendments”, when on the same day the *Australian reported that Cabinet has been sitting every day this week, sometimes until midnight, to consider the design of the Australian emissions trading scheme; and does this contrast not speak volumes about the cavalier way this Government is approaching this critical reform?

Hon DAVID PARKER: Not at all. Ministers, including Dr Cullen and me, have had over 150 briefing reports on the detailed issues here. There have been more than 100 public meetings in New Zealand. There have been well in excess of 100 one-on-one stakeholder meetings between officials and stakeholders. There have been processes that have involved the *Secretary to the Treasury, the head of the *Ministry of Agriculture and Forestry, the head of the *Ministry for the Environment, the head of Energy, the head of the *Ministry of Economic Development, and business leaders.

There has been the *Climate Change Leadership Forum. All of this has been in addition to the select committee process, which heard many, many submissions, and gave an average of 20 minutes per oral submitter. It spent many, many hours considering the detail, yet we have calls for delay by National. I repeat what was said yesterday. National’s call for further delay is illogical. The issues have been thrashed to death during consultation and submission processes. The implication from National in its version of the emissions trading scheme is that we will give businesses 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—that is what New Zealand Energy and Environment Business Week said last week.

Hon Dr Nick Smith: How can the Minister maintain that all the necessary analysis has been done on the impacts of this bill when his own *Climate Change Leadership Forum has only just commissioned case studies on the impact of the scheme on *Fonterra, *New Zealand Steel, *Fletcher Building, and *Pan Pac Forest Products; will he assure the House that these reports will be completed and made public before he asks this Parliament to further advance the bill, and can he also explain why these reports were not done before rather than after the select committee process?

Hon DAVID PARKER: The depth and quality of analysis that lies behind this legislation is second to none, in respect of anything that I have ever been involved in in this Parliament. It is a widely held view within this Government, I think, that the process has actually been very proper and very able. The *Climate Change Leadership Forum, to which the member referred, in fact called for the emissions trading scheme to proceed, as has the *Parliamentary Commissioner for the Environment and as have some other business groups. It is true that some oppose it, but of course they want less cost on them and more for taxpayers.

Hon Dr Nick Smith: How can the Minister claim that the select committee process was both thorough and extensive, when the committee had only 3 days to consider over 1,000 amendments, when it took just 16 hours to consider over 60 reports—one of which was over 400 pages long— and when the Government rotated over 24 MPs through the committee like a game of musical chairs?

Hon DAVID PARKER: Unlike some other parties in the House, the Government membership of that committee was very consistent throughout—the senior members were there throughout. One of the effects when the Opposition tries to suppress progress on these things by collapsing quorums is that the Government has to make up the quorum, and of course we do that. In respect of this bill, the select committee heard from 161 submitters. It took over 58 hours to hear the submissions, with an average of 20 minutes per submitter. The select committee considered officials’ reports throughout the process. At the end of the process, after all of the submissions had been heard, a further 16 hours was taken to consider detailed provisions of the bill. As a consequence, the bill that has been reported back is in very good shape.

Hon Dr Nick Smith: Given the degree of integration of the New Zealand and Australian economies, the Australian Government’s commitment to having emissions trading scheme legislation before its Parliament by the end of this year, and Helen Clark’s own decision to defer the implementation of this legislation until 2010, why will the Minister not admit that it is politics and Labour’s branding that is driving the rush to pass this legislation, rather than focusing on New Zealand’s interest in having a politically sustainable and sound emissions trading scheme? Hon DAVID PARKER: The Australians certainly are not waiting for us. They might have been a bit slow out of the starters’ gate, but they are fast catching up. Last year the chair of the *United Nations *Intergovernmental Panel on Climate Change said that further delay was too late, that this really was a defining moment, and that the time for action is now. Where is the National Party in respect of this issue? All of the experts around the world are saying that the time for action is now, but National’s answer is to do nothing. National’s answer is do nothing, delay, subjugate New Zealand’s interests to those of Australia, not pursue New Zealand’s interests, and wait, wait, wait— do nothing.

Primary Health Organisations—Reports

12. LESLEY SOPER (Labour) to the Minister of Health: What reports has he received on the success of primary health organisations?

Hon DAVID CUNLIFFE (Minister of Health): I have received a report showing that under Labour, Kiwis are benefiting from cheaper doctors’ visits and cheaper prescriptions. July marks the sixth anniversary of *primary health organisations in New Zealand, and over 4 million New Zealanders are benefiting. Nationwide, the average cost of seeing a *general practitioner has dropped to just $26, and a million Kiwis pay no more than $15.50. This year’s Budget extended $3 prescriptions to hospitals, which means that even more people will benefit.

Lesley Soper: What evidence does the Minister have that the creation of primary health organisations is leading to better coordination at a local level?

Hon DAVID CUNLIFFE: In many parts of the country primary health organisations are leading to greater cooperation and more *co-location of services—for example, the *Horowhenua Health Centre, which I visited yesterday with my colleague Darren Hughes, and whose first birthday is today. That community is benefiting from having general practitioners, radiology, elderly care, and day surgery all co-located in the same place. That would go out the window if a National Government ever got the chance to reintroduce its disastrous *free-market model in the health system. Alternatively, National could just admit defeat and embrace our policy, as Tony Ryall did in Rotorua recently, when he said National would promote *one-stop family health centres, which is just what we are doing.


Lawyers and Conveyancers Amendment Bill (No 2)—Submissions

1. DAIL JONES (NZ First) to the Chairperson of the Justice and Electoral Committee: Will she request people to make submissions on the *Lawyers and Conveyancers Amendment Bill (No 2); if not, why not?

LYNNE PILLAY (Chairperson of the Justice and Electoral Committee): The committee will be hearing evidence at its meeting tomorrow.

Dail Jones: Does the chairperson recall that 93 persons gave evidence on the *Lawyers and Conveyancers Bill, and has she asked all 93 persons to give evidence to the select committee, and will she give them an opportunity to be heard, rather than agreeing to have the bill reported back to the House on 10 July, thereby giving hardly anyone a chance to be heard on this very important legislation?

LYNNE PILLAY: As the member knows, or should know, that is confidential to the committee.

Dail Jones: I raise a point of order, Madam Speaker. I disagree; that is not confidential to the committee. The member herself has just indicated that submissions will be heard. I am just asking her a question, which you have permitted. I was asking whether those people would be allowed to give submissions and whether all 93 will be allowed to give submissions, or whether we have a situation where the Labour Government wants to drum this bill through the House for the benefit of the trade union movement, which is really behind this bill. LYNNE PILLAY: The member will be on the committee tomorrow and the matter will be discussed then.

Madam SPEAKER: If, in fact, a decision has been made by the committee on this matter, then the chair is right: it is a matter that is confidential to the committee.

Dail Jones: In that case, has a decision been made on this matter by the committee?

Madam SPEAKER: The member has had his supplementary question, but maybe for interest of the House the chair of the committee can address that question.

LYNNE PILLAY: As I understand it, the committee business is confidential to the committee.

The member will be at the committee tomorrow. If he wishes to, he can read his papers and be quite clear on things.

Dail Jones: I raise a point of order, Madam Speaker. I believe that the member is trifling with you. You have just indicated that I can ask whether the committee has made a decision. All the chairperson has to say is “Yes” or “No”. Otherwise she is trifling with you, Madam Speaker, and I would ask you to deal with the member accordingly.

Madam SPEAKER: No, it is a matter of procedure, as I understand it. But I will consider the question and give the member a ruling tomorrow, because these are difficult issues. The questions that members can raise are quite narrow, and certainly the calling for submissions is a matter for the chair of the committee. Everything else, though, as I understand it, is in fact a matter for the committee that it comes before. So I will take that matter under consideration.


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