Questions and Answers - 1 June 2010
(uncorrected transcript—subject to correction and further editing)
TUESDAY, 1 JUNE 2010
QUESTIONS FOR ORAL ANSWER
QUESTIONS TO MINISTERS
1. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that his proposed cycleway would cost $50 million and “will create just under 4000 jobs when it’s being built”; if so, how many jobs have been created so far?
Hon JOHN KEY (Prime Minister): Yes, those were the initial thoughts of officials and others looking at the idea on the day of the Job Summit. If the member wants to narrowly define construction, the numbers employed directly look like being about 500, of which 70 are already working. However, I am confident, because of the hive of activity and excitement around local communities, councils, and tourism operators, that we will see 4,000 jobs in the long term as a result of this project.
Hon Phil Goff: If the cycleway was the big idea to come out of the Job Summit, why have only 70 jobs—70 jobs—been created in the 16 months since the summit was held?
Hon JOHN KEY: I would say that the big success of the Job Summit was the fact that we got employers, unions, and the Government on the same page, and what a stunning success it has been, with unemployment falling from 7.1 percent to 6 percent.
Hon Phil Goff: Were the summit and its initiatives designed to deal with the immediate unemployment problems arising out of the global financial crisis; if so, how does he rate the achievement of his flagship initiative in creating just 70 jobs, nearly a year and half since the summit was held?
Hon JOHN KEY: It is not for me to rate it. We can look at the commentators who said that the unemployment rate would be 11 percent; it has fallen from 7.1 percent to 6 percent—a job well done, I would have thought.
Hon Phil Goff: How does he define the term “quick start”, when a year after he announced seven Quick Start cycle trails, three have not even got off the drawing board?
Hon JOHN KEY: I would not define “quick start” as the influence that Phil Goff is having on the country as Leader of the Opposition.
Hon Phil Goff: I raise a point of order, Mr Speaker. It was a very clear, straightforward question, and that answer in no way addressed it, and you know it.
Mr SPEAKER: The dilemma I have is that I could not even hear the question of the Leader of the Opposition because of loud interjections coming from both sides of the House. It is very difficult for me to rule in those circumstances. I think the only fair thing in the circumstances is to let the Leader of the Opposition repeat his question.
Hon JOHN KEY: I raise a point of order, Mr Speaker. We do not need the question again. I can paraphrase exactly for the Leader of the Opposition. He said—
Mr SPEAKER: Order!
Hon Phil Goff: My supplementary question was this: how does he define the term “quick start”, when a year after he announced seven Quick Start cycle trails, three have not even got off the drawing board?
Hon JOHN KEY: I say again that I define “quick start” as making more of an impression than the Leader of the Opposition is.
Hon Phil Goff: I raise a point of order, Mr Speaker. That was a serious—
Mr SPEAKER: Forgive me, but I ask the member to resume his seat. I invited the member to repeat his question, and it asked the Prime Minister how he defines “quick start”. The Prime Minister defined it. That is the dilemma with that kind of question.
Hon Phil Goff: I raise a point of order, Mr Speaker. When the words “quick start” are used in relation to the cycle trails, they are used in a particular context and have a definition. That answer did not even come near to it.
Mr SPEAKER: The dilemma is in the construction of the question. It is a bit dangerous to ask a Minister how he or she defines something, because it gives the Minister a bit of licence to define things in a way that the member may not expect. I allowed the member to repeat the question because I wanted to hear it clearly, and I did hear it clearly the second time. There is the opportunity to ask further questions.
Hon Phil Goff: Is it correct, as reported, that to date only 10 kilometres of new cycleway, rather than upgraded track, have been created—only 10 kilometres—representing a mere 150 metres of cycle trail a week since he announced the policy?
Hon JOHN KEY: No, it is not correct.
Hon Phil Goff: Actually, it is. If the cycleway was such a good idea, as the Prime Minister said, why has he slashed the funding in the 2010 Budget for urban cycleways and walkways to half the level that it was in the 2008 Budget?
Hon JOHN KEY: To the best of my knowledge, we have not. As I have said so often in this House, if Phil Goff wants to go into the 2011 election campaigning on ripping up the cycleway, I say bring it on; I will see him at the debate.
2. CRAIG FOSS (National—Tukituki) to the Minister of Finance: What reports has he received showing signs that the economy is rebalancing towards exports and investment and away from borrowing, consumption, and property speculation?
Hon BILL ENGLISH (Minister of Finance): This rebalancing of the economy is one of the main goals of Budget 2010. There are some encouraging statistics, but we need to keep in mind that any rebalancing of the New Zealand economy is a long-term goal, not necessarily able to be achieved easily in the short term. Last week Statistics New Zealand reported that New Zealand posted an annual trade surplus of $161 million in the year to April—the first trade surplus recorded since July 2002. The trade surplus for the month of April alone was $656 million, or 16.5 percent of the value of New Zealand’s exports. This compares with an average April trade deficit of 0.6 percent of exports for the previous 10 years. However, as I said, the figures for one month, or even one year, will not deal with the long-run problem of imbalance in the New Zealand economy.
Craig Foss: Why is it important that the economic recovery is built around exporting and investment rather than consumption, debt, and excessive Government spending?
Hon BILL ENGLISH: It is very important, because that is how we will undo the damage done by the previous Government, with its 10 years of mismanagement and a squandered decade in which it could have put—
Hon Darren Hughes: I raise a point of order, Mr Speaker. Mr Speaker, you have given many rulings on these sorts of things. This question comes from the Government itself, so therefore the Minister must have had notice of it. It is inexplicable that he would start off with his answer being
entirely about the previous Government. We have had an election, National is in charge now, and it should answer on the basis of its policies.
Mr SPEAKER: There will be silence while I consider this point of order. The dilemma I have, I say to the member, is that the Minister was asked why the claimed rebalancing of the economy was important. It is difficult for me to rule the Minister out of order in referring to how he sees things that have gone on in respect of the New Zealand economy. What he must not do is to make any allegations about what the Labour Party’s current policy may be, and then criticise that. He must not do that, but I think the Minister is within his rights to comment as he sees fit on the recent economic situation in New Zealand.
Hon David Cunliffe: I raise a point of order, Mr Speaker. Further to your ruling on that and in view of Speaker’s ruling 145/7, which holds that “The Government can answer only for its own intentions and has no responsibility for the Opposition.”, would your ruling still hold it to be true that the matters to which the Minister referred were wrong in fact as well as not being within his own purview?
Mr SPEAKER: I appreciate that the member is raising a genuine point. If the Opposition believes that anything that the Minister says is wrong, Opposition members can question him on the answer that he gives. The idea of supplementary questions is to test the accuracy and validity of a Minister’s answer. So, when the Minister—it appears that he might do this—comments on what has happened in the past, that gives Opposition members free opportunity to question him on anything he says in that answer.
Hon BILL ENGLISH: It is important to rebalance the economy because of the damage done by the mismanagement of the previous Government, which left behind an economy where the tradable sector had shrunk by 15 percent and the non-tradable sector had grown by 10 percent. Jobs that are based on borrowing, imports, housing speculation, and poor management of Government finances are not sustainable, as many New Zealanders have found out. We want to create sustainable jobs and higher family incomes.
Hon David Cunliffe: I raise a point of order, Mr Speaker. In reference to the previous point of order, the matter does get somewhat more complicated. If one listened to that answer, one heard that it was not simply a recitation of matters that the Minister believes are important, but that he was giving his own view of, or his own spin on, what he thinks of those issues. In view of the Speaker’s ruling that says he has responsibility only for the Government and not the Opposition, it is not possible for Opposition members to question the Minister about Opposition affairs. We can question him only about Government responsibility, which means that we cannot ask him, in logic, a supplementary question about matters for which he is not responsible.
Mr SPEAKER: The honourable member needs to be aware that the Opposition is no longer in Government. The Minister was commenting on the economic environment that he inherited as the Minister. That is no longer the property of the current Opposition; Labour was in Government then. The Minister did not make any comment on the Opposition’s current policies. I listened carefully; he made no comment on the Opposition’s current policies. But I believe the Minister is responsible for dealing with the economic situation that the Government inherited as he, on the Government’s behalf, sees it. He gave some facts in his answer —what he claimed to be facts; I heard some information about the tradable versus non-tradable sectors of the economy—but if he was wrong, then members of the Opposition can question him on the accuracy of that answer. Supplementary questions are there to test a Minister’s answer. I listened carefully, and the Minister made no comment about the Opposition’s current policies. But in respect of the activities of the previous Government, which the Minister has had to confront as the Minister in this Government, I believe it is legitimate for the Minister to make comment on those, although he can be tested on the accuracy of what he says.
Hon Darren Hughes: I raise a point of order, Mr Speaker. I think it is important to get some clarity for the Opposition on this matter. Are you ruling that we can use our supplementary
questions to ask Ministers in this Government about the effect of policies of the previous Government, of which they were not members, and for which they had no responsibility?
Mr SPEAKER: It is very simple. Where a Minister, in his or her answer, covers issues that relate to the previous Government, Opposition members are perfectly at liberty to question the Minister about any aspect of his or her answer—in this case, his answer. That is absolutely within the Standing Orders. The idea of supplementary questions is to test the answer that a Minister has given. Often, Opposition members will not be happy, necessarily, with the answers that they are given, and the idea of having supplementary questions available to members is that if they believe a Minister has said something incorrect in an answer, everything that the Minister included in his or her answer is available for further questioning, even if the matter relates to the previous administration.
Craig Foss: What steps were taken in Budget 2010 to help the economy to grow faster and ensure that more of the growth comes from all the right places?
Hon BILL ENGLISH: The Budget took several measures to boost growth in the productive parts of the economy. They included reforming the taxation system in order to put the right incentives into the economy and help to keep skilled Kiwis in New Zealand; investing in New Zealand’s future through a significant boost in science and innovation, and in infrastructure; continuing to get debt and deficits under control; and investing record sums in priority front-line public services.
Hon Rodney Hide: I raise a point of order, Mr Speaker. This is not about the sound system; this is about the constant heckling from the deputy leader of the Labour Party and Trevor Mallard, who just set up a wail across the House. You are closer than me to the Minister who is giving the answer, so you can probably hear him, but I can assure you that it was a struggle for me to hear the answer. I believe that all members of Parliament deserve to hear the answer and to not be subjected to a constant stream of barracking across the front benches.
Hon Darren Hughes: The answer that the Minister seeks in his point of order is in the hands of the Government: if Ministers give answers that attack a political party and are provocative, then of course it is just natural that there will be a response from Opposition members. If the Minister of Finance was able to get up, explain his own policies, and give succinct answers based on what he is doing right now, not on what happened 10, 20, or 30 years ago, there would be a much quieter reception. We are interested in his policies.
Mr SPEAKER: I will not take more of the time of the House on this matter. I say the Hon Rodney Hide’s point of order is a fair point of order; it was very difficult to hear, because of the level of interjection. I say to the Hon Darren Hughes that I accept that the Opposition is not happy with the answer that was given. I absolutely accept that; there is no question about that. But to counter that by way of just excessive interjection is not the best way of countering it. The best way is to attack the Minister with sharp questions that test whether he has misrepresented, in the member’s view, the achievements of the previous Government. If he has done that, then members should question him in a way that shows that he is misrepresenting the achievements of the previous Government, rather than just interjecting on the Minister. I am sure that the Hon David Cunliffe will do that.
Hon David Cunliffe: In view of the zero net debt, the record low unemployment, and the longest post-war period of economic expansion that his Government inherited from the previous Government, is he satisfied with Treasury’s assessment of the growth impact of his Budget, which cost $15 billion in tax rebates and fails to scrape up over 7 years as much as 1 percent of additional economic growth?
Hon BILL ENGLISH: When Labour Opposition members understand the damage that they did to the economy in the last 5 years that they were in Government, then we will bother to have an economic debate with them.
Craig Foss: What policy approaches would put the growth in exports and investments at risk and mortgage the future of New Zealand families?
Hon BILL ENGLISH: The kinds of approaches that would put that growth at risk would be increasing personal income taxes, and, in particular, getting back on the treadmill of making endless promises to anyone who asks for money, and thereby running up large external debts. New Zealand already owes the world $170 billion. Every policy that I hear from members on the other side of the House would make that significantly worse.
Hon Trevor Mallard: Is it his opinion that the decade of incompetence included incompetence in allowing him to take half a million dollars by pretending to live in Dipton?
Hon BILL ENGLISH: No, but I tell that member that I spend many hours of my day on cleaning up behind his incompetence.
Question No. 1 to Minister
Hon PHIL GOFF (Leader of the Opposition): I seek leave to table a document that sets out the statistics on the spending on walkways and cycleways, which disproves the Prime Minister’s last answer.
Mr SPEAKER: What is the source of the document?
Hon Phil Goff: The source of the document is a summary of Budget 2008 and Budget 2010 as they apply to cycleways and walkways.
Mr SPEAKER: Who prepared it?
Hon Phil Goff: It was prepared by my office. [Interruption]
Mr SPEAKER: Order. Leave has been sought, but the dilemma is that this information is in Budgets and is readily available to members of the House. I do not think that we should be doing that.
Oil Drilling—Management of Oil Leaks
3. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Energy and Resources: Will he, before issuing any permits for deep-water oil drilling in the Great South Basin, ensure that all drilling companies have the ability to control any leaks that develop?
Hon GERRY BROWNLEE (Minister of Energy and Resources): The member is clearly concerned about an incident similar to the one in the Gulf of Mexico occurring in New Zealand waters. I say to him that the New Zealand Government is equally concerned, as are, I believe, all oil companies throughout the world. I firstly indicate that we have officials from the Maritime Safety Authority in the United States at the moment working alongside the Americans, and we are also observing the work that has been done to try to rectify the problem there, and, indeed, to find out exactly what the problem was in the first place. More important, as part of our petroleum action plan we have required a body of work to be done on the environmental protection that would be required in our exclusive economic zone. Our expectation is that that work will be completed in time for it to be included in the legislation. Given that we do not have any prospect of deep-water drilling in New Zealand for at least the next 18 months, we expect those new requirements to be in the new law, and that companies will comply with them. But at the moment, it is very much a case of finding out exactly what happened, because it appears that no one quite knows, and that is not a satisfactory situation.
Dr Russel Norman: In light of that answer, will he give an assurance to this House that no drilling will proceed in deep water in the Great South Basin until the oil companies can demonstrate that they have the ability to plug a leak like the one we have seen in the Gulf of Mexico?
Hon GERRY BROWNLEE: The first point is that no drilling is planned for any deep-water area—defined in the US as being below 300 metres—in New Zealand, certainly in the next 18 months, and perhaps up to 2 years. I am of the strong view that any of the oil companies that might be interested in pursuing their options will themselves, for the sake of their own liability, want to
make sure that they are as safe as they possibly can. If we couple that with the environmental protections we will put in the exclusive economic zone legislation, I think the assurance can be given that the Government will do all it can to ensure that there is a stronger safety regime in place for people drilling in deep water in New Zealand.
Dr Russel Norman: Although I accept the assurance that the Government will do all it can, does he accept that New Zealanders do not want drilling to go ahead in deep water until the oil companies have actually proven that they have the ability to plug a leak like that one, because so far they have not proven they have the ability to stop the leak?
Hon GERRY BROWNLEE: It is fair to say that there is one company with a problem. It is now emerging that it has had quite a significant number of problems over a long period of time, and perhaps the monitoring did not show that up quickly enough. That makes me think that we need to have those strong regimes. But I appreciate that New Zealanders will want to be comforted by the fact that the very best technology will be applied to any drilling operations in deep-water New Zealand.
Dr Russel Norman: Although I accept that it will be the very best technology, does the Minister not accept that the very best technology may not be enough, and that, given the ecological sensitivity of the Great South Basin, we should not allow deep-water drilling until the oil companies have demonstrated that they actually have the ability to plug one of those holes?
Hon GERRY BROWNLEE: As I said at the outset, there is no plan to drill in that part of New Zealand—or any other deep-water part of New Zealand—for at least 18 months, or perhaps up to 2 years. I would be very, very surprised if any oil company went ahead without having the capacity to do exactly as the member suggests.
Budget 2010—Results of Television One Poll
4. Hon ANNETTE KING (Deputy Leader—Labour) to the Prime Minister: Does he agree with the 53 percent of New Zealanders in last night’s Television One poll who believe they will not be better off as a result of the Budget?
Hon JOHN KEY (Prime Minister): What people believe is entirely up to them, but I can assure people that the GST / income tax switch will make the vast bulk of New Zealanders better off. They can check that out by going to www.taxguide.govt.nz and putting in their details. I would also note that 61 percent of people in that survey said that the Budget would be good for the economy, and, even more important, 94 percent said they did not want Phil Goff to be Prime Minister.
Mr SPEAKER: Provocative answers invariably lead to disorder. The answer was very good until the last unnecessary bit, but then the interjection across the House was totally unreasonable.
Hon Annette King: Who does he think has the best understanding of the impact of his Budget: himself, or our leading Christian organisations, who have spoken out against his Budget in the weekly newspaper Challenge Weekly, saying that it does little to reduce queues to food banks, that GST will fall most heavily on those least able to bear it, that it has not lessened the gap between the rich and the poor, and that the cost of new houses will rise, and who have dubbed his Budget the “price and pay Budget”?
Hon JOHN KEY: I would not agree with those comments.
Hon Annette King: When he said that New Zealanders would be pleasantly surprised in October, will the gap he highlighted when in Opposition, between the underclass and other New Zealanders, be closed by his tax cuts—an underclass he promised to do something about; if not, was the trip to McGehan Close with the TV cameras in tow just a publicity stunt?
Hon JOHN KEY: It will not be worsened, and I believe that the creation of 170,000 new jobs will help close that gap.
Hon Annette King: When he said New Zealanders would be pleasantly surprised with their tax cut in October, had he factored in the $10 to $20 a week increase in rents, as quoted by landlords; the $5 a week power price increase; the increase in telephone bills; the increase in accident
compensation levies; the increase in doctors’ fees; the increase in the cost of food items; an interest rate hike; an increase in rates; and an increase in early childhood education costs for parents; and in fact will the surprise not be an unpleasant one, as Kiwis already suspect because they are not silly?
Hon JOHN KEY: No. If we take one of those points—we do not have all afternoon in the House—Treasury’s advice is that rents will go up by 1.4 percent. I might add that over the last 8 years of a Labour Government the average was 2.6 percent. I point out that if the member is looking at the inflation rate, which is really the fundamental point the member is making, I would refer her to Michael Cullen’s response when he was asked about why inflation was continuously running at over 3 percent under a Labour Government. He simply said that New Zealand could not be immune to these challenges and that the Government certainly could not control the price of petrol or food.
Hon Annette King: Does he think the low-income Aucklander who has contacted me today will get a pleasant surprise in October, given that he has just received an increase of $10 a week to his rent, before October, because of increasing costs from the Government’s Budget; he has been promised a $13.81 a week tax cut, and this rent increase leaves him with just $3.81 a week to cover the $9.68 increase in GST alone, without all the other costs he will face?
Hon JOHN KEY: All I can say is that if rent has gone up now, when there has been absolutely no change at this point, that is because the landlord is choosing to do that. I would make one point: I fondly remember before the Budget when the Leader of the Opposition or the finance spokesman— one of the two—said he was interested in talking to this Government about a capital gains tax on property. Well, that might have done a thing or two to rents.
Hon Annette King: I seek leave to table the front page of the Challenge Weekly newspaper. It is not a well-known newspaper around New Zealand but it is the Christian newspaper, and I think it fits into your category of one that is not widely distributed.
Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.
Hon Annette King: I seek leave to table a transcript from an interview on breakfast television on 26 May with the New Zealand Property Investors Federation.
Mr SPEAKER: That one is a transcript from a recent broadcast, which is available to everyone.
Health Services—Minister’s Statements
5. NICKY WAGNER (National) to the Minister of Health: Does he stand by all of his recent statements on health services?
Hon TONY RYALL (Minister of Health): Yes, including the statement that the Government has increased funding for positron emission tomography scans this year by $800,000 and next year by $1 million annually. Positron emission tomography scans are a specialised scan that is used to detect and evaluate some cancers, and can provide information about whether the cancer has spread and whether surgery is necessary. This increased funding will increase access for up to an extra 550 cancer patients a year—a near doubling of the existing number of patients with access to those scans.
Nicky Wagner: What benefits will there be for patients from this announcement?
Hon TONY RYALL: The Government inherited a situation where some district health boards referred their cancer patients for positron emission tomography scans and others did not. That is clearly not fair or equitable. This new money is being spread across district health boards on an equitable basis nationwide to benefit 550 extra cancer patients across the country each year. The benefit for patients is that up to 40 percent may have their treatment plans revised after a positron emission tomography scan, and many of them will avoid unnecessary surgery, chemotherapy, or radiation treatment.
Hon Annette King: In light of his statements about Herceptin, was additional funding provided in Budget 2010 for extra cardiac checks for women undertaking the 12-month therapy with breast cancer drug Herceptin; if so, how much was provided?
Hon TONY RYALL: I do not have the detail of that specific matter with me. I would say, though, that we have made money available for improving cardiac surgery because we were concerned about the number of people waiting—a situation we inherited as a Government.
Hon Annette King: I raise a point of order, Mr Speaker. Maybe the Minister misheard me. I did not say “cardiac surgery”; I asked about cardiac checks for women who are taking Herceptin. That is what I asked.
Mr SPEAKER: It is a bit unusual to allow this, but I accept the point the honourable member is making. Could the Minister please answer that part of the question. The Minister indicates he has no further information on that. It seems he does not have the information.
Hon Annette King: Are the figures from Statistics New Zealand—which show that medical inflation continues to outstrip the CPI, jumping to 5.3 percent—correct; if so, on what basis did he make the claim that the Government has protected health spending, when the average percentage increase he has given to district health boards is 3.5 percent, with some district health boards getting as little as 2 percent?
Hon TONY RYALL: That claim was made clearly on the basis that when we look at the costs overall that district health boards are facing, we see that they are getting a very significant funding increase. In fact, funding today is a higher percentage of GDP than provided by any Government previously. I say to the member opposite that a heck of a lot more is being achieved than was achieved during her failed term as Minister of Health in this country.
Budget Calculator—Forecast Inflation Rate
6. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: Does the Government’s online Budget calculator use the Treasury’s forecast inflation rate of 5.9 percent for 2011; if not, why not?
Hon BILL ENGLISH (Minister of Finance): First of all, I thank the member for drawing the attention of the House to the website www.taxguide.govt.nz, where anyone can check the impact of the tax and income support changes that were announced in the Budget, and can confirm that virtually all New Zealanders will be better off. It does not include factors not directly attributable to the Budget, such as falling unemployment rates or indexation of entitlements. These are, however, reflected in the Budget forecasts, which include the creation of 170,000 jobs over the next 4 years.
Hon David Cunliffe: I raise a point of order, Mr Speaker. The question was on notice, and was, I think you would agree, a very straightforward question. The answer really is either “Yes” or “No”. It appears that the Minister was trying to say that, no, it does not, but I seek your assistance in clarifying that matter.
Mr SPEAKER: The member makes a fair point. The question was a very straightforward question; we heard a lot of answer that did not actually relate to the question. In the end, after we had heard what was not included in the calculator, we had not actually heard whether that inflation forecast was included. I think the Minister should answer that; it was on notice.
Hon Gerry Brownlee: I raise a point of order, Mr Speaker. It has become a habit of that member simply to raise spurious points of order if he does not get the answer he wants—
Mr SPEAKER: No, no, I have heard enough; the member will resume his seat. The question asked was a very straightforward question. The question asked—and I will repeat it for the assistance of members: “Does the Government’s online Budget calculator use the Treasury’s forecast inflation rate of 5.9 percent for 2011; if not, why not?”. That is a very straightforward question—no politics—and the House does deserve an answer. There is public interest in that, and the House deserves an answer. Instead of that, the member was thanked for drawing attention to the website, etc. That is not the way questions should be answered. At the end of the day, the member has drawn a conclusion from the Minister’s answer that maybe the calculator does not take account of that forecast inflation rate, but the public should know for certain and should not have to draw a
conclusion about it. Where a straightforward question is asked, this House and the public deserve an answer.
Hon Gerry Brownlee: I raise a point of order, Mr Speaker. The Minister of Finance did give a straight answer, and I point you to Speaker’s ruling 157/8, which makes it very clear that a member cannot insist on a “Yes” or “No” answer. If you have ruled that that no longer applies, then we should be told that formally.
Mr SPEAKER: Again, I would ask for a little sense to be applied to Speakers’ rulings and the Standing Orders where a matter is clearly in the public interest, and it is not that difficult. The Minister of Finance is responsible. This matter is directly the responsibility of the Minister of Finance; it is not some peripheral thing. And I think the House deserves to know the information— whether the forecast inflation rate is included in the calculator’s calculation results. It is not a difficult matter, and it is just trifling with the House to avoid answering it. I ask the Hon Bill English to answer.
Hon Peter Dunne: I raise a point of order, Mr Speaker. Can I take the point you have just ruled on one step further by drawing your attention to Speaker’s ruling 158/1. It seems to me that with the ruling you have just made, which will be of benefit to the House, you are in effect overturning Speaker’s ruling 158/1. I raise that because for many years Speakers have used the phrase “The Minister is just required to address the question.” in response to complaints about whether an answer has been properly given. Mr Speaker, I think it is very important for you to indicate whether, in fact, that provision still prevails, or whether you are, in fact, ruling in a way that sets a new precedent in respect of that. It would be of benefit for all members of the House to know whether that change is being made.
Mr SPEAKER: I appreciate the honourable member’s point, and I have made it very clear that my interpretation of Standing Order 377 is very simple. The Standing Order states that “(1) An answer that seeks to address the question asked must be given if it can be given consistently with the public interest.” To me, the most crucial part of that Standing Order is that an answer must be given as long as it can be given consistent with the public interest, and the nature of that answer—if there is any doubt about the question asked; and there are many questions where it is hard to work out what exactly is being asked—should address the question as best the Minister can. But, in my view, there is no doubt about what that Standing Order means, and that is why, in my view, it is the responsibility of the Minister to answer a fair question. I think with some questions that are asked a member may be trying to get a “Yes” or “No” answer on something that is not absolutely the Minster’s direct responsibility, or was not on notice. But this question was on notice, and is about something right at the heart of things. The calculator is part of the Budget documentation; it was put in place by the department for which the Minister is directly responsible. There can be no doubt that it is a matter that that Standing Order intends should be answered. That is why I am asking the Minister to answer it.
Hon BILL ENGLISH: I regret that I took the time to explain to the House what the calculator does do. In fact, what I said was that the calculator shows the impact of the tax and income support changes announced in the Budget. That is what it shows. It does not include factors that are not directly attributable to the Budget, and that is the answer.
Hon David Cunliffe: I raise a point of order, Mr Speaker. I appreciate your efforts to enjoin the Minister to answer that question on notice. It was, as you say, a pretty straightforward question. The dilemma that I think the House has is that even after a second try the Minister’s answer is still quite indistinct, because it is, in fact, circular. He does not define what elements were “within the Budget” and what elements were not, and therefore he has not made clear to the House whether the 5.9 percent inflation forecast, which appears on page 63 of the Budget document containing the Economic and Fiscal Update, and which is an absolutely crucial variable—
Mr SPEAKER: I think the member has made his point clear, and I will try again. And I am being deadly serious here, because this matter is absolutely the Minister’s responsibility. The figure
referred to in the question, it is claimed—and I presume that it has been validated—is in Treasury documentation associated with the Budget, so it is a matter that is absolutely at the heart of the Minister’s responsibilities. The Minister can refuse to answer the question if he believes that it is not in the public interest to answer it, but I would be highly surprised if answering the question was not in the public interest. I once more—and I am deadly serious—ask the Minister not to trifle with the House. I expect the question on notice to be answered. [Interruption]
Mr SPEAKER: I say to those members who have interjected that they will cease that immediately. This is clearly a fairly testing time in this House. I do not think anyone has ever seen this done before, and I expect members to show a little respect to this place.
Hon BILL ENGLISH: The calculator shows the impact of tax and income support changes announced in Budget 2010. It does not include factors that are not directly attributable to the Budget, such as price movements.
Hon David Cunliffe: I raise a point of order, Mr Speaker. I sincerely appreciate your efforts, but the Minister has again given a circular answer. In—
Mr SPEAKER: On this occasion, the Minister said that it does not include price movements, which is another way of saying that it does not include inflation.
Hon David Cunliffe: Our having established, then, that the 5.9 percent inflation rate forecast by Treasury on page 63 of the Budget document containing the Economic and Fiscal Update is not included in the public benefit calculator on the Minister’s website, how can he say to New Zealanders that they can go to that website and calculate whether they personally will be better off, if it, in fact, ignores the full effect of inflation?
Hon BILL ENGLISH: Because the member is suggesting a stupid calculation, and we did not set up the calculator to make stupid calculations. If we wanted to work out the impact on wages over time, we might include an inflation rate, but we would also include projected wage increases. In the Budget the projected wage increases exceed projected inflation. The Budget also shows 170,000 new jobs.
Hon David Cunliffe: I raise a point of order, Mr Speaker. Although that question was not on notice, it followed directly from the previous question, which was on notice. The Minister appears to be responding that it is a stupid thing that New Zealanders would go to the website to try—
Mr SPEAKER: I have heard sufficient. On the question on notice, I insisted that the Minister give this House an answer. I believe that the Minister’s answer on this occasion did answer the question the member asked.
Aaron Gilmore: What was the inflation rate over the 9 years to 2008, and what compensation for it did the Government provide?
Hon BILL ENGLISH: Inflation over the 9 years to December 2008 averaged just under 3 percent, at 2.8 percent every year, and peaked at 5.1 percent in September 2008. The cumulative increase in the price level was 28 percent. Those who were on benefits obviously got indexation according to that, but, on the member’s logic, no compensation was offered to anyone else for 28 percent inflation in the cost of living.
Hon David Cunliffe: What provision does the online calculator make for rent rises being passed through to households following changes to property taxation?
Hon BILL ENGLISH: The calculator does not include rent rises, but the Government has been quite open about the work that has been done on it. Treasury has calculated that it may rise by somewhere between 1 and 2 percent over 3 to 5 years. If we had followed that member’s advice and brought in a comprehensive capital gains tax, rents would be going through the roof.
Hon David Cunliffe: Does the online calculator make provision for the indication that up to 50 percent of retailers may seek to pass on price rises unrelated to GST, and what action will he take if that occurs?
Hon BILL ENGLISH: If the member had any idea of what was going on in the real economy, he would know the extent of the discounting being done by retailers. Retailers simply will not be able to get away with putting prices up to whatever they like.
Hon David Cunliffe: How can he say that New Zealanders will be better off as a result of this Budget, when the Government’s online calculator omits Treasury’s forecast inflation track, the likely full impact of GST, the impact of property taxes on rents, and the impact of increased Government charges and lost benefits, and when will he admit to the House that he has misled the public of New Zealand as a result?
Hon BILL ENGLISH: The member should take the advice he is getting from his own supporters, I suppose, on his side of the House, who pointed out to me before that if we are to show price increases over time, we need to match them with wage increases over time. Why does the member not include that in all his calculations?
Hon David Cunliffe: I seek leave to table the disclaimer attached to the 2010 online Budget calculator, which makes no disclosure—
Mr SPEAKER: That is readily available to members of the HQ.7
7. SIMON BRIDGES (National—Tauranga) to the Minister of Agriculture: What steps has the Government recently taken to improve animal welfare in New Zealand?
Hon DAVID CARTER (Minister of Agriculture): Last week I was delighted to announce that the Government will spend an extra $8.2 million over 4 years to boost animal welfare activities. This is the largest increase in animal welfare funding for over a decade, and it reflects the importance this Government places on maintaining the highest possible standards of animal welfare.
Simon Bridges: What specific areas will benefit from the extra $8.2 million?
Hon DAVID CARTER: The vast majority of the funding will go to front-line services and will see the number of Ministry of Agriculture and Forestry enforcement officers more than double. There is also additional funding for the National Animal Welfare Advisory Committee and the SPCA, and for a major review of the Animal Welfare Act. This is a comprehensive package that, in addition to the Animal Welfare Amendment Bill, will increase animal welfare compliance in New Zealand.
Hon Jim Anderton: Why has the Minister, in the new animal welfare code for 2010, allowed a religious group the right to cut the throats of animals without stunning them first, despite Ministry of Agriculture and Forestry and scientific evidence that the animals suffer undue cruelty? This poses the serious question as to how this process will improve “animal welfare in New Zealand.”
Hon DAVID CARTER: If the member is referring to the Animal Welfare (Commercial Slaughter) Code of Welfare 2010, I have not allowed an exemption.
Hon Jim Anderton: Why has the Minister approved in the animal welfare code one set of rules for the Muslim community, which is required to stun animals before slaughter, and another set of rules for the Jewish community, which is not required to stun animals before they have their throats cut—something that I refused to agree to when I was reviewing the code as Minister of Agriculture and Forestry?
Hon DAVID CARTER: The member is misinformed; I have not done so.
Overseas Investment Act Review—Treasury Comments on Screening
8. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Finance: Does he agree with Secretary to the Treasury John Whitehead’s comments that the Government should remove overseas investment screening for all but the “most sensitive” of items; if not, why not?
Hon BILL ENGLISH (Minister of Finance): The Government has been looking at the Overseas Investment Act to see whether it contains the right balance between the protection of New
Zealanders’ vital interests, both economic and landscape, and whether the processes are as cheap and effective as they should be. Screening needs to recognise that New Zealand needs some overseas capital. We have billions of dollars of it here now, so we can access skills and technology and investment for new jobs, but also we need to recognise public concerns about those situations, whether the benefits of overseas investment do not outweigh the costs.
Dr Russel Norman: Is he aware that the National Business Review has reported that Andrew Petersen of Bell Gully is working on behalf of overseas investors attempting to buy Crafar farms; if so, does he have any concerns that that is the same Andrew Petersen of Bell Gully who is advising the Government on rewriting overseas investment rules?
Hon BILL ENGLISH: It is possible. I have not seen that publication or checked the facts. We did follow the common-sense course of asking those people who use the Act a lot what could be done to improve it. Ultimately it is Cabinet, though, that will make any decisions about any change in our overseas investment rules. In the meantime the screening process remains very thorough, and consistent with the Overseas Investment Act changes that were made under the previous Government.
Dr Russel Norman: Was Andrew Petersen of Bell Gully present when the Minister of Finance met the advisory group of corporate lawyers to discuss rewriting our overseas investment rules, on 18 February this year?
Hon BILL ENGLISH: It is possible that he was. I have to say that lawyers all tend to look the same if one meets them in a room, and I could not guarantee whether it was him.
Dr Russel Norman: Does he stand by his answer, then, to written question No. 7033—
Mr SPEAKER: I apologise to the member. If he could start the question again; I could not hear it, because of interjections.
Dr Russel Norman: Does the Minister stand by his answer to written question No. 7033 from 30 April this year, where he said he had not met with any lawyers acting for Natural Dairy (NZ) Holdings, such as, possibly, the same Andrew Petersen from Bell Gully, and why is he refusing to release any information under the Official Information Act about his meeting on 18 February with the corporate lawyers advising the Government on changing the rules on foreign investment?
Hon BILL ENGLISH: We are getting into speculative territory here. I have absolutely no knowledge of whoever those who attended that meeting were acting for. It is unlikely they were acting for Natural Dairy (NZ) Holdings, which I understand has shown up only in the last couple of months in New Zealand. But I am quite happy to deal with any questions that the member has. In respect of the other issues, the Government is still considering its policy changes.
Te Ururoa Flavell: Tēnā koe, Mr Speaker. Talofa lava. Does he agree with the Landcorp chair, Jim Sutton, that the proposal from the China Jin Hui Mining Corporation, recently renamed Natural Dairy (NZ) Holdings, to buy the 16 dairy farms formerly owned by the Crafar family included “ ‘reputational risks’ to the New Zealand dairy industry and ‘New Zealand Inc’ ”; if so, what will be done to respond to these risks?
Hon BILL ENGLISH: Any apparent risks around this particular purchase will be dealt with thoroughly by the existing processes of the Overseas Investment Office and the Overseas Investment Act 2005.
Te Ururoa Flavell: Is he aware that one of the Crafar farms is part of the Maraeroa A and B blocks, over which Ngāti Rereahu has a settlement interest, and what processes of due diligence are followed to ensure that iwi are fully informed and involved before any deals are approved by the Overseas Investment Office?
Hon BILL ENGLISH: It is my understanding that the Overseas Investment Office goes through exactly a set of due diligence processes to ensure that all Treaty interests and claims are taken into account before any approval can be given.
Dr Russel Norman: I seek leave to table the Official Information Act answer from the Minister of Finance about the February meeting of the working-group on overseas investment.
Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.
Hon David Parker: Does the Minister agree that infrastructure assets with monopoly or oligopoly characteristics ought not to be sold to overseas interests?
Hon BILL ENGLISH: I understand that people may get concerned about overseas purchase of those assets, although I note that on his watch the previous Government approved—and it may even have been the member himself—the purchase of the Wellington electricity lines network by an overseas buyer.
Hon David Parker: Is the Minister aware that controls on the purchase of land by overseas interests have been tightened recently in Australia, and does his Government intend to follow suit?
Hon BILL ENGLISH: I understand that those measures were taken in respect of the purchase of residential housing. The Government has not seen any particular problem in that respect in New Zealand.
Budget 2010—Opportunities for Tertiary Education
9. Hon MARYAN STREET (Labour) to the Minister for Tertiary Education: Does he stand by his statement that Budget 2010 will “ensure more higher education opportunities for New Zealanders”?
Hon STEVEN JOYCE (Minister for Tertiary Education): Yes, because Budget 2010 funds more core tertiary places than ever before. In 2011 the Government will fund 117,400 full-time places at universities, which is an increase of 1,735 on previously projected figures, and 70,000 fulltime places at polytechnics and institutes of technology, which is an increase of 3,173. That is a significant achievement in tight fiscal conditions brought on by the global financial crisis.
Hon Maryan Street: Can he confirm that, when he talks about more higher education opportunities for New Zealanders, he is not talking about all the new university enrolments who are being turned away at the door because the Government refuses to fund new places in universities adequately?
Hon STEVEN JOYCE: I point out to the member that the number we are funding this year— 116,600—is significantly more than what the previous Government funded in 2008. That funding was projected to decline in 2009 and 2010. I also point out that the policy of capping university enrolments was created by the previous Labour Government, and was implemented in 2008.
Hon Maryan Street: Why does he stand by his original statement, when the total number of places funded by the 2010 Budget is only half the number of people who will be turned away from Victoria University alone in the remaining semester of 2010?
Hon STEVEN JOYCE: I do not know that I want to argue with the member’s maths, but the total number of places in 2010 is 116,572. It is difficult to believe that that number of enrolments are being turned away by Victoria University, let alone double that.
Hon Maryan Street: Can he confirm that when he talks about more higher education opportunities for New Zealanders, he is not talking about filling university places with full-feepaying international students at the expense of places for New Zealanders, but, instead, is talking about using international students’ money to fund New Zealand universities, which is usually the responsibility predominantly of the Government?
Hon STEVEN JOYCE: No. My view is that we need to not only maximise the number of places for domestic students, which this Government is doing, with the highest number ever, but also improve and increase our international education fees. I point out to the member that universities in New Zealand compete for their academic staff with universities internationally, in particular those in Australia. Australian universities have significantly more fee income from
international students than New Zealand universities, and we have to improve the fee income in New Zealand to enable them to compete with Australian universities. It is that straightforward.
Hon Maryan Street: Can he confirm that when he talks about more higher education opportunities for New Zealanders, he is not talking about second-chance learners who rely on adult and community education courses to help them get back into formal education, given Budget 2010 continues to slash funding to that sector?
Hon STEVEN JOYCE: The Government made some decisions on funding of adult and community education. We have said we are focusing adult and community education in certain areas, but we are not expecting to subsidise all adult and community education. That was partially in response to the unfunded commitments left by the previous Government. In terms of full-time places at universities, institutes of technology, and polytechnics, this year’s numbers are at record levels, and next year’s numbers will also be at record levels.
Emissions Trading Scheme—Costs to Households
10. JOHN BOSCAWEN (ACT) to the Prime Minister: How much of the $3 per week he referred to as the average cost for households of the emissions trading scheme on Television One Breakfast on 24 and 31 May relates to electricity and petrol price rises, and how much relates to the flow-on effect of these costs into the price of all other goods and services that households consume?
Hon JOHN KEY (Prime Minister): The cost of the emissions trading scheme for the average household is estimated to be $165 per year, or $3.17 a week, to be exact. I point out that that cost is half what it would have been under Labour’s emissions trading scheme. I have been advised that of the $165, $117 relates to electricity, petrol, and other energy price rises, and $48 relates to the passthrough of costs. This means that on the weekly measurement the member is using, of the $3.17- per-week cost, $2.25 relates to the increases in the price of energy, petrol, and electricity, and the remaining 92c relates to the flow-on.
John Boscawen: Why does the Prime Minister reject the Reserve Bank analysis of the costs of the emissions trading scheme, especially when it told the Finance and Expenditure Committee on 11 March this year that although the direct impact of electricity and petrol price rises is 0.2 percent, there is an estimated additional indirect impact of 0.15 percent, giving a total impact of 0.35 percent—that is, 75 percent more than the direct impact—which means that the full impact is more than $5 per week, not the $3 he and the Minister for Climate Change Issues are promoting?
Hon JOHN KEY: The member is incorrect. I quote from the Reserve Bank as supplied directly to me this afternoon: “the implementation of the ETS should not affect medium-term inflation … we expect to be able to look through this inflation boost.”
John Boscawen: Will the advertising campaign that the Government is planning highlight the $3-per-week figure or the full cost of the emissions trading scheme as calculated by the Reserve Bank?
Hon JOHN KEY: The full cost is $3.17 per week, as per the best estimates we have. I refer the member to the Reserve Bank, which said that there will be no impact on prices as a result of the emissions trading scheme shock. If the member does not want to accept that cost, he needs to go and challenge the Reserve Bank, but I have it here in writing, and the member should stop making it up.
John Boscawen: I seek leave to table my own email from Mike Hannah, head of communications and board secretary of the Reserve Bank, sent to me this afternoon, which confirms the evidence given by the Reserve Bank on 11 March, when it said that the total impact would be 75 percent more than the direct cost the Prime Minister refers to.
Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.
Hon Darren Hughes: I raise a point of order, Mr Speaker. I am pretty sure that I heard the Prime Minister say at the end of his answer that the member who had asked him a question was “making it up”. For a Prime Minister to accuse one of his own parliamentary colleagues of making something up cannot be parliamentary.
Mr SPEAKER: We all make comments in this place that are possibly not the best, but I do not think the member was overly offended. I think the House should leave it at that.
John Boscawen: I seek leave to table a letter from Mercury Energy to Scott Paterson of Balmoral, Auckland, advising of the increase in the retail price of electricity from 1 July this year on account of the Government-imposed emissions trading scheme and the extra costs it will impose.
Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.
Prime Minister—Conflicts of Interest and Blind Trusts
11. Hon PETE HODGSON (Labour—Dunedin North) to the Prime Minister: Does he stand by his statement to the New Zealand Herald last year that he has put certain assets into a blind trust that is “so blind I haven’t got a clue what’s in it”?
Hon JOHN KEY (Prime Minister): Yes.
Hon Pete Hodgson: How can that be, given that the public now knows that he knows he can access the details through Whitechapel Ltd whenever he wants to by going to the Companies Office website?
Hon JOHN KEY: The member is incorrect. I refer him to the legal opinion that I tabled last week—
Hon Annette King: We know who wrote that.
Hon JOHN KEY: If the member wants to call those lawyers and Bruce Gray QC, who peerreviewed their opinion, liars, she is welcome to, but I suggest that she does it outside the House— and I wish her good luck with that one. I tell her to be brave and go out. I refer to point six of the legal opinion, which says “Whitechapel Limited is the trustee of Aldgate Trust and may or may not act as trustee of other trusts.” It is impossible to look at Whitechapel and know whom those assets are held for.
Hon Pete Hodgson: If I can find what is in his trust on any day of the week by going to Whitechapel Ltd, where I find only assets that were in his name at one time and never any other assets in the economy, why does he persist with the fiction that he cannot do so?
Hon JOHN KEY: Because I am accurate. Whitechapel is a trustee. It is a trustee for the Aldgate Trust, but it may also be a trustee for other trusts, and it may well have sold those assets. I have no knowledge of that.
Hon Pete Hodgson: Can the Prime Minister confirm that the assets held by Whitechapel Ltd concern wine assets, dairy assets, and real estate assets, all of which used to be in the Prime Minister’s name, and that Whitechapel Ltd contains no other assets whatsoever?
Hon JOHN KEY: No. Whitechapel is a trustee company. It is a trustee company for the Aldgate Trust, as supplied in the legal opinion. As that opinion said in point six, Whitechapel may or may not act as a trustee for other trusts. It is physically impossible for anyone to know whom it holds those assets for.
12. SHANE ARDERN (National—Taranaki - King Country) to the Minister for Food
Safety: What progress has been made on reforming New Zealand’s food legislation?
Hon KATE WILKINSON (Minister for Food Safety): I am pleased to advise the House that a Food Bill modernising our food legislation has been introduced to the House. This is a comprehensive reform, giving consumers better and more consistent protection, while giving food businesses more certainty and removing unnecessary requirements.
Shane Ardern: What effect will the food bill have on community fundraising activities?
Hon KATE WILKINSON: For a start, the Kerikeri jam makers will be able to make jam and the sausages will be back on the sizzle in Timaru without unnecessary bureaucratic rules.
Dr Ashraf Choudhary: Talofa lava. How can she guarantee that this bill will have no impact on the cake stalls and sausage sizzles that Kiwis rely on when section 93 of the bill says that people are liable to prosecution if they fail to comply with certain requirements under the bill?
Hon KATE WILKINSON: As the member knows, the bill is based on a risk-based approach depending on the risk of the food concerned. The bill will go to a select committee, and if that clause is a concern I am sure that the member will raise it at the select committee during the bill’s proper scrutiny.