(uncorrected transcript—subject to correction and further editing)

THURSDAY, 21 JUNE 2012

QUESTIONS FOR ORAL ANSWER

QUESTIONS TO MINISTERS

Question No. 1 to Minister

Hon DAVID PARKER (Labour): There has been an error in my office and the word “deficit” should appear after the word “account”. I seek leave to insert the word “deficit” after the word “account”.

Mr SPEAKER: Leave is sought for that course of action. Is there any objection? There is no objection.

Government Financial Position—Effect on Credit Rating

1. Hon DAVID PARKER (Labour) to the Minister of Finance: Does he accept the BNZ statement that New Zealand’s increasing current account deficit is “a very clear risk for New Zealand’s credit rating with Standard and Poor’s”?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: The current account is a factor—obviously one factor—in credit ratings. If it was to climb to the levels of deficit last seen in, say, 2008, when it reached 8.8 percent, that could be a risk, depending on what else was happening in the economy. I would note, however, that both Treasury and Reserve Bank forecasts for the current account deficit have it tracking significantly lower than the BNZ does. At its current level of 4.8 percent the current account deficit is well below the level seen at its peak, but it does remain, of course, a significant area to work on. That is why this Government has a comprehensive programme to get back into surplus, make our economy more competitive, lift savings, and turn round the strong imbalances that have persisted over several decades.

Hon David Parker: Did today’s GDP figures show that imports are up and exports are down?

Hon STEVEN JOYCE: I do not think that today’s GDP figures interpreted either of those, necessarily, on their own. What they did show was that the growth in the March quarter was very broad-based, including both the manufacturing, agricultural, and services sector, and was therefore very positive for the wider New Zealand economy.

Hon David Parker: Do the forecasts from Treasury, the Reserve Bank, the IMF, ANZ, and BNZ all forecast the currently account deficit getting worse because the cost of imports is rising faster than the value of our exports?

Hon STEVEN JOYCE: I can confirm the first part of that question, which is that they do forecast an increase in the balance of payments deficit over the next couple of years, for a number of reasons, one of the most significant ones being the imports required for the rebuild in Christchurch. But there are also other indicators as well. It is important to note also, though, that the Treasury numbers peak at well below what we saw in the last decade, where they were getting to quite worrying levels of around 8 to 9 percent, particularly in the last couple of years of the previous Government.

Hon David Parker: Has he seen the BNZ report that our current account deficit, rising as it is, risks another credit downgrade; and how does he reconcile the risk of a credit downgrade with his comments about underlying strength in the economy?

Hon STEVEN JOYCE: I think all forecasters are having their challenges at the moment, including the bank in terms of its expectations for GDP growth. Of course, it turned out to be quite different today, just a day later. But I would also, in terms of referring to the report, which I have read, point out that it does say very clearly that the Government must remain hell-bent on achieving surpluses so that the ratings agencies do not have the excuse of twin deficits to downgrade our sovereign debt. I can assure the member that the Government remains very focused on that, I have to say, in contrast to the Opposition.

Rt Hon Winston Peters: Has the Minister seen the comments of Stephen Toplis, Bank of New Zealand’s head of research, on the current account deficit when he said: “Not only is this a direct threat to the NZD but it is also a very clear risk for NZ’s credit rating with Standard & Poor’s, in particular, having recently placed great emphasis on the current account’s progress.”; and, given that and other comments, why would a Minister of Finance wish to remain in office, and should he not have been sacked a long time ago?

Hon STEVEN JOYCE: I repeat the answers to earlier questions in the same vein. Yes, it has widened, but nothing like what it was under the previous Government before it left office, where it went to 8.8 percent.

Hon Member: Sticking to a plan that’s working.

Hon STEVEN JOYCE: Well, I think it is working a heck of a lot better than the previous Government’s plan—of that we can be quite sure.

Economy—Reports

2. SHANE ARDERN (National—Taranaki - King Country) to the Minister of Finance: What reports has he received on the economy?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: I am surprised and pleased to have the opportunity to report that Statistics New Zealand this morning issued gross domestic product data for the March quarter of 2012. It showed that the economy grew 1.1 percent in the 3 months to 31 March, which means that the economy in the quarter to 31 March was 2.4 percent larger than it was in March 2011, which is better than the growth in most other developed countries.

Hon David Cunliffe: Better than growth in the last 2 years.

Hon STEVEN JOYCE: Although the data is stronger than market expectations—and I appreciate Mr Cunliffe is surely disappointed to see New Zealand going better than he thought—we are likely to continue to see fluctuations in growth from quarter to quarter. But the figures do confirm underlying moderate strength in the New Zealand economy despite the uncertain international mood and ongoing difficulties in Europe in particular.

Shane Ardern: What were the main reasons for economic growth in the March quarter?

Hon STEVEN JOYCE: GDP growth in the March quarter was actually reasonably broad-based, including manufacturing, business services, and agriculture. The economy has grown moderately since emerging from a recession that started in 2008. Importantly, this is sustainable growth, as households and businesses have built their incomes around higher savings and earnings rather than around consumption and debt, which we saw in the last decade. That is a good thing. The excessive debt and Government spending that marked much of the 2000s was clearly unsustainable. It is important that the Government takes a long-term view of building New Zealand’s competitiveness and productivity. This will help us deal with the headwinds from the uncertain global environment, and that remains the focus of the Government’s economic plan.

Shane Ardern: How does New Zealand’s current economic growth compare with the position inherited by the National-led Government in 2008?

Hon STEVEN JOYCE: I am pleased to confirm that the current position is significantly stronger on pretty much every score. In late 2008 the New Zealand economy had been in recession for almost 1 year—well before the global financial crisis and well before other countries went into recession. And in late 2008 the incoming Government was confronted by forecasts of never-ending fiscal deficits, ever-rising Government debt, and net international liabilities approaching 85 percent of GDP. Despite the global financial crisis and the series of debilitating earthquakes in Canterbury, this Government has taken a series of sensible and balanced decisions to get the economy growing, to get on top of debt, to set a path back to surplus, and to reduce our net international liabilities to 70.9 percent of GDP.

Hon David Parker: Does the Minister of Finance stand by his statement in the House yesterday that “banks and officials are going to make forecasts, and some are going to be pessimistic and some of them are going to be optimistic.”, and has he seen that Treasury and the Reserve Bank are pessimistic, the IMF is pessimistic, the ANZ is pessimistic, and the BNZ is pessimistic about our current account deficit and rising net international liabilities; if so, who is it that is optimistic about these matters?

Hon STEVEN JOYCE: I am sure he agrees with his statement in the House yesterday. I think he would probably note that Treasury, the Reserve Bank, and sundry other forecasters not only were pessimistic about some things; they were also pessimistic about the March GDP numbers, and it turned out that the optimists were right on that occasion and the pessimists were wrong.

Rt Hon Winston Peters: Why did he not, as Minister of Finance, tell the Prime Minister to stop comparing us favourably with Australia for the first 4 months of this year, only to find that Australia’s growth rate at the end of March was 4.3 percent, 300 percent stronger than New Zealand’s, or was it the fact that he was irresponsible in advising the Prime Minister to keep on making a fool of himself?

Hon STEVEN JOYCE: I am just trying to work out which one of those questions I would possibly answer on behalf of the Minister of Finance. Perhaps I will answer the serious one, because the rest is, with the greatest respect, a whole lot of bumf. In response to the member’s serious question around New Zealand’s growth rate, we absolutely are focused on growing the New Zealand economy stronger. I would point out that it is now completely without doubt that Australia’s growth rate is driven by minerals and oil exploration in Australia, and I would welcome the member’s assistance in working with other members of the House to advance the Government’s agenda in that regard.

Hon David Parker: Why is it that the Minister of Finance seems to be the only person who thinks we have rebalanced the economy, given our rising current account deficit and projections that show rising net international liabilities to 2016 and beyond, by which time National would have—should New Zealand be unlucky enough—been in power for more than 8 years?

Hon STEVEN JOYCE: You know, you really sort of wonder whether Mr Parker remembers where his Government got us to back prior to 2008. As Labour left office, New Zealand’s net international liabilities were 85.9 percent of GDP; as at today, they are 70.9 percent, which is 15 percent less—

Hon David Parker: It’s the insurance.

Hon STEVEN JOYCE: Oh, right. So we have to factor out everything that is positive. The balance of payments when Labour left office was 8.8 percent of GDP. Today we are debating the difference between 4.2 percent and 4.8 percent. I do not think the rest of the country looks at those numbers and says that Labour has any clue about economic management.

Accident Compensation—Recover Independence Service

3. KEVIN HAGUE (Green) to the Minister for ACC: Can she confirm that staff in ACC’s Recovery Independence Service teams receive more or less remuneration dependent on whether the proportion of people receiving weekly compensation is less or more than specified duration targets?

Hon JUDITH COLLINS (Minister for ACC): I have today been advised that within the performance framework for the Recover Independence Service team, there is a component related to net entries to the long-term claim pool. I have also been advised that the component related to that number was approximately 15 percent of how a case-managed performance is measured. If a case manager performs well against the other 85 percent of their targets, they may still be entitled to a performance-based pay increase.

Kevin Hague: What is the clinical basis for these targets, if any at all?

Hon JUDITH COLLINS: I do not think I can answer that, because it is very much an operational issue, but I can say that ACC has advised me that it uses specialist, independent vocational rehabilitation services and clinicians to help people return to their pre-injury occupation wherever possible.

Kevin Hague: Does the Minister accept that having a financial incentive to terminate claimants’ compensation is likely to make case managers more inclined to terminate compensation for more claimants?

Hon JUDITH COLLINS: If the member wants to put it like that, I can understand why he would be concerned. But we can look at it another way, which is a financial incentive to help people get back to independence and get back to work. I would say that was probably a good thing.

Kevin Hague: What safeguards, if any at all, are there to ensure that staff financial incentives do not lead to clinically inappropriate decisions to terminate compensation?

Hon JUDITH COLLINS: I am advised that ACC uses the specialist, independent vocational rehabilitation services and clinicians, and that these people are independent, and that that is quite different from the case managers.

Kevin Hague: Is she aware that the rates of successful challenges of ACC decisions continue to rise in both the decision review process and in the District Court, and does she agree that that is indicative of something badly wrong in ACC decision-making?

Hon JUDITH COLLINS: I think what it does indicate is that Dispute Resolution Services is clearly quite independent of ACC, as is, obviously, the District Court. There may well be instances—as in ACC previously—where they believe that there are too many decisions being reversed on the basis that someone is clearly making the wrong decisions, the wrong call. That tells me that these are made by independent clinicians. Actually, I think it would be a bad thing if every dispute that was sent to, for instance, Dispute Resolution Services for ACC was upheld. That would tell me that the service was either not independent or that nobody was actually checking to see whether or not people can work.

Kevin Hague: What other ACC staff or contractors have financial incentives to deny claims or reduce compensation or rehabilitation services to ACC claimants?

Hon JUDITH COLLINS: I do not have that information.

Kevin Hague: Has she now received enough information about ACC’s disastrous claims management processes to ask the Auditor-General to bring forward her investigation of ACC’s claims management processes?

Hon JUDITH COLLINS: I have not actually received enough information to do that. I am aware that the Auditor-General is undertaking her review, and I am prepared to wait for that review.

Kevin Hague: I seek leave to table a document. It is a document from ACC in response to an Official Information Act request from a member of the public. It sets out the key performance indicators for staff in the Recover Independence Service teams.

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.

Andrew Little: What incentives are there under the ACC performance framework for Recover Independence Service staff to ensure that ACC meets its statutory obligations in relation to treatment, compensation, and rehabilitation?

Hon JUDITH COLLINS: I have been advised by ACC that the performance framework relates to 10 percent of performance against organisational goals, which clearly would include what that member has just asked; 10 percent against team goals, again; 30 percent against organisational values, which are clearly those matters he has raised; and 50 percent against personal goals. The 50 percent of personal goals includes 25 percent case-management quality, 10 percent customer service, and 15 percent net entries to the long-term claim pool.

Andrew Little: How effective is the new regime for vocational rehabilitation, which is intended to assist some claimants to return to work, or to recover their independence, given that there is a new layer of administration to pay for, called lead providers, and front-line service providers are complaining of being paid less and spending less time with claimants?

Hon JUDITH COLLINS: I am sorry, could the member repeat his question? I did not catch all of it.

Mr SPEAKER: I ask the member, please, to do that.

Andrew Little: How effective is the new regime for vocational rehabilitation, which is intended to assist some claimants to return to work—namely, to recover their independence—given that there is a new layer of administration to pay for, called lead providers, and front-line service providers are complaining of being paid less and spending less time with claimants?

Hon JUDITH COLLINS: I have been advised by ACC, when I have been around visiting its offices, that what has been necessary is to actually bring in lead providers to maintain the quality of assistance that is given in terms of the claimants, because before they had a large number of providers, and very little ability to supervise the quality. So it has been, I think, cut down to about six lead providers, and that seems to be working quite well.

Economic Development, Minister—Statements

4. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister for Economic

Development: Does he stand by all his recent statements?

Hon STEVEN JOYCE (Minister for Economic Development): Yes, especially my recent statement: “The only way we can create jobs, pay for public services, and lift New Zealanders’ living standards is through faster, sustainable economic growth.” I am sure all members in the House will be pleased to note this morning’s growth numbers. Although it is just one quarter, it demonstrates our economy’s improving strength, despite current uncertain international conditions, particularly in Europe.

Hon David Cunliffe: Does he stand by his statement today to the Commerce Committee that the Pure Advantage green growth report would leave us poorer for an extended period of time, that he fundamentally disagrees with it, and that it would be value-destroying?

Hon STEVEN JOYCE: I agree with the first and third propositions. The second is not actually correct. I said in response to your questions this morning, Mr Cunliffe, that its proposal to move investment from New Zealand’s traditional strengths, which are around about 80 percent of our exports—in areas such as primary industries, oil and gas, and so on—immediately into what it described as new green growth industries would be very dislocating for the New Zealand economy.

Hon David Cunliffe: We will look to the transcript. How can he reconcile his statement that “The Auditor-General’s process will not impact on the Government’s negotiations with SkyCity.” with his answer to written estimate questions that “decisions in this area will be a matter for the new ministry”—meaning the Ministry of Business, Innovation and Employment—and can he therefore confirm that the incoming Ministry of Business, Innovation and Employment chief executive will have the authority to cancel or renegotiate the Skycity deal?

Hon STEVEN JOYCE: I am not sure where the member gets his proposition today, but I can confirm for him that the Ministry of Business, Innovation and Employment will start in 9 days’ time, on 1 July. I can also confirm for him that negotiations are ongoing, in parallel with the Office of the Auditor-General’s process.

Hon David Cunliffe: In light of the Minister’s comments, I seek leave to table his written answers to estimates—

Mr SPEAKER: Order! No, we do not seek leave to table written answers. They are available to all members.

Hon David Cunliffe: Does he stand by his statement that the Government’s target for employment growth is 170,000 over 4 years, when his colleague Mr English revised that forecast down to 154,000 in last month’s Budget, or are those Ministers not in frequent conversation?

Hon STEVEN JOYCE: Oh dear, chasing things again. It is like a dog chasing a car.

Mr SPEAKER: Order! The Minister should answer it. Sorry, what was the answer?

Hon STEVEN JOYCE: The answer to the question is that, if the member cares to note, one is Treasury’s predictions in 1 year, and the next is Treasury’s predictions for next year. I was asked this morning about how they were going in relation to the first year, and I can report to members that we are progressing well and we are slightly ahead of target at this point.

Hon David Cunliffe: Does he stand by his statements to the Commerce Committee today that all costs of the new Ministry of Business, Innovation and Employment will be met within baselines; if so, why does the Government continue to withhold the full due diligence report?

Hon STEVEN JOYCE: The transition will be met within baselines, and as I advised the member this morning, the Government is seeking savings through this amalgamation, which I advised him the numbers for at the time. In terms of the due diligence report, there are a number of items that have been withheld at this stage but they will be released in due course. Of course, we are going through a transition and it is important to give the officials the opportunity to manage that well.

Rt Hon Winston Peters: Will the Minister release all of the Cabinet subcommittee and Cabinet papers giving rise to the superministry proposal, which would debunk the rumour that this idea came purely from him and John Key; if not, why not?

Hon STEVEN JOYCE: For the member’s information, I think you will find that redacted versions of the second Cabinet paper and the first Cabinet paper are available publicly right now.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I did not ask for a redacted version of two documents. I want to know whether or not he is prepared to release all the documents behind this proposal, not just two of them.

Mr SPEAKER: Well, it is a shame the member did not ask that question, instead of the rest of what he put into his question. I am loath to intervene when members add unnecessary information to a question. If the member really wanted the answer to that question, he should have just asked that, and not put the other bit in about something to do with the Minister and the Prime Minister. But I would ask the Minister if he could answer the first part of that question: when he intends to release all the papers.

Hon STEVEN JOYCE: The point I was making—he asked about papers of Cabinet committees and Cabinet, and those are the papers. There have been some redactions, as has been noted, but the papers have been released.

Mr SPEAKER: I thank the Minister.

Street Racing, Illegal—Deterrents

5. JAMI-LEE ROSS (National—Botany) to the Minister of Police: What actions has the Government taken against illegal street racers?

Hon ANNE TOLLEY (Minister of Police): I am pleased to advise the House that the first vehicle crushing under the boy-racer legislation took place this morning at Seaview in Lower Hutt,

and it was pretty spectacular. The car’s owner had been found guilty of driving while suspended, loss of traction, and dangerous driving, leading to a 21-month disqualification. The court ordered his car to be seized and destroyed, following his third strike under the Sentencing (Vehicle Confiscation) Amendment Act, introduced by my colleague Minister Collins in the last term of this Government.

Jami-Lee Ross: What has the trend been in illegal street racing activity since the Government passed legislation tackling illegal street races?

Hon ANNE TOLLEY: Police data across the districts show a 29 percent reduction in reported illegal street racing offences since 2009. This shows the powerful deterrent effect of the carcrushing legislation. I am confident that today’s crushing will make boy racers think twice before engaging in further illegal activity.

Question No. 4 to Minister

Rt Hon WINSTON PETERS (Leader—NZ First): I raise a point of order, Mr Speaker. I want to refer you to the answers given to question No. 4 by the Minister for Economic Development. The fact is that the State Services Commission advised that there are other documents and other reports—

Mr SPEAKER: Order!

Rt Hon Winston Peters: This is a pretty serious issue.

Mr SPEAKER: Order! The member cannot dispute an answer by way of a point of order. The rules of this House make no provision for that. The member has further supplementary questions. He could have used those further supplementary questions to probe the Minister’s answer. But he cannot dispute the answer by way of a point of order. That is totally contrary to the rules of this House. The right honourable member has been in this House long enough to know that.

Rt Hon WINSTON PETERS (Leader—NZ First): I raise a point of order, Mr Speaker. The fact is that I asked the same question twice, and I got the same answer twice, and it is not correct.

Mr SPEAKER: Order! The member will resume his seat and he will not carry on like that, because the Minister answered his question. Whether the member agrees with the answer or not is another matter.

Rt Hon Winston Peters: It’s not true.

Mr SPEAKER: Order! The member should not be interjecting. If it ain’t true, the member’s party has two more supplementary questions. He could have challenged the Minister’s answer. That is what question time is about. It is not about making clever statements; it is about asking tough questions.

District Health Boards—2012 Community Pharmacy Services Agreement

6. Hon MARYAN STREET (Labour) to the Minister of Health: Has he received any reports or correspondence regarding the Community Pharmacy Services Agreement with District Health Boards and if he has, have they caused him any concern?

Hon JO GOODHEW (Associate Minister of Health) on behalf of the Minister of Health: Yes, he has received a number of reports and letters. Many have generally been in favour of the new agreement, but there have been some concerns around the time frame and technical details. The district health boards have been in national discussions with the pharmacy sector for over 2 years to develop this new service model. The new model will provide an increased focus on high-needs patients to ensure the best outcomes for those most in need. This also makes better use of the pharmacists’ clinical expertise in medicines management.

Hon Maryan Street: Does the Minister consider the contract that the pharmacies have been offered to be ill-conceived, potentially dangerous, and rushed, as some pharmacists consider it to be; if not, why not?

Hon JO GOODHEW: No. In fact, there has been a consultation process of over 2 years, during which there has been wide support from the sector. I can tell you that it is a complex contract of 163 pages, and having first had 1 month of consultation back in March and April—there were 500 submissions, which all addressed the concerns of that contract—the contract was then sent out electronically to the pharmacists on 1 June, and individual PDFs were sent to the pharmacies concerned on 6 June and 7 June. So, no, I do not believe that either it is ill-conceived or there are problems with that time frame.

Hon Maryan Street: Would the Minister consider it appropriate for any service provider, including pharmacists, to sign up to a 166-page service contract they had seen only in the last week that does not specify the fee that they are to receive for their service after 1 February next year; if not, will he call for a delay in the implementation of the contract until such time as pharmacists are clear about the professional and financial implications of the contract they are being offered?

Hon JO GOODHEW: The contracts, as I have already alluded to, were first sent out not 1 week ago but on 1 June, electronically. The hard copies of the contracts that will be signed have progressively been sent out to individual pharmacists since that time. The district health boards are working with the pharmacists individually to address any concerns they have about the financial implications of this contract to their pharmacy. But I would remind the member, yet again, that back from 26 March to 27 April this proposed contract was consulted on comprehensively. More than 500 submissions addressing the concerns of the pharmacists have been addressed. So, no, I would not agree with the member.

Hon Maryan Street: Is there any point at which he considers it useful as Minister to intervene in matters of this sort, which he would normally call operational decisions, or will he simply wait for the mistakes that the pharmacists are predicting to actually occur, and for somebody’s health to be jeopardised, before he takes an interest in this issue?

Hon JO GOODHEW: This Government is absolutely committed to this contract, because we believe that it is better for pharmacists, and also for patients who have long-term conditions. The district health boards are working with individual pharmacies around the concerns. But this has been not just over the last few weeks; I will say again that this has been over quite a long period of more than 2 years spent developing this contract, and 500 submissions have been addressed, as well. I am sure the district health boards will continue to engage with the pharmacists in sorting through any of the issues that concern them.

Question No. 4 to Minister

Hon DAVID CUNLIFFE (Labour—New Lynn): I apologise for delaying the next question. I seek leave to table a letter to me from the Deputy State Services Commissioner in relation to the previous question, to the Minister for Economic Development, which says “there are no other papers in relation to the due diligence process”, contradicting what the Minister has just told the House.

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.

Better Public Services—Justice Sector

7. TIM MACINDOE (National—Hamilton West) to the Minister of Justice: How is the Justice sector contributing to the Government’s better public services programme?

Hon JUDITH COLLINS (Minister of Justice): The justice sector is well on track to make significant contributions to the Government’s Better Public Services programme. The sector is working collaboratively on groundbreaking plans to reduce crime, violent crime, and reoffending. We will be reducing opportunities for crime by targeting repeat locations and supporting repeat

victims, targeting vulnerable youth and youth offenders, reducing alcohol and drug abuse, and reducing reoffending by strengthening rehabilitation services. The crime rate is at the lowest—

Mr SPEAKER: Order! Before the Minister goes on too long, I am not sure any members can hear this. There seems to be a problem with the—[Interruption] Order! It would be helpful if members allowed a little time to try to fix it. There appears to be a problem with the microphone.

Hon JUDITH COLLINS: Would you like me to start again, Mr Speaker?

Mr SPEAKER: Order! I would like the Minister to start again with a briefer answer. That answer is too long.

Hon JUDITH COLLINS: Oh, it was just such good news. Well, we are reducing opportunities for crime by targeting repeat locations and supporting repeat victims, targeting vulnerable youth and youth offenders, reducing alcohol and drug abuse, and reducing reoffending by strengthening rehabilitation services. The crime rate is the lowest it has been in 30 years. We have a great window of opportunity now to view the way in which our courts are functioning and our justice system as a whole is operating. We are committed to delivering better justice services, and I think rehabilitation might be of some use to a few members over there.

Mr SPEAKER: Order! I just hope that the public sound system is working. I want that looked into with some urgency because that is just hopeless. [Interruption] No, not the answer, the sound system. Order! I meant the sound system’s performance. The Speaker makes no comments on the performance of most members.

Tim Macindoe: How will the Justice Sector Leadership Board and the Justice Sector Fund contribute to the Government’s Better Public Services programme?

Hon JUDITH COLLINS: The justice sector Ministers have developed a cross-agency plan aimed at providing an accessible justice system. A 4-year budget plan has been developed to integrate spending, operations, and change through to 2016. This is a first in the public sector. I am delighted that our Cabinet colleagues have shown such a level of confidence in the justice sector agencies. The justice sector chief executives, who make up the leadership board, are able to look across the entire funding of the sector and discuss the application of savings in a way that best achieves the sector’s goals.

Charles Chauvel: Will most of the initial funding for the Justice Sector Fund, which she told the Justice and Electoral Committee this morning will come from Vote Corrections, be offered to the police so as to avoid a nil wage rise this year for uniformed officers; if not, why not?

Hon JUDITH COLLINS: In fact, the decisions on how any underspends are spent is going to be made by the justice sector Ministers along with the chief executives. Not one person makes that decision; it is one that we come at collaboratively, and we can do so up to a total of $100 million without going back to Cabinet. So it is going to be something that every agency is going to be looking at: how they can better use the resources they have so that we do have some money to spend, more particularly on rehabilitation—particularly of recalcitrant criminals—as we should be.

Charles Chauvel: I raise a point of order, Mr Speaker. The Minister did not address the question, which was a very simple one: why will the funds that are going into the Justice Sector Fund not be applied to a particular purpose? She told us how the fund would be managed, she told us what some general priorities for the fund would be, but she did not say why it would not go to the purpose that I asked about.

Mr SPEAKER: Forgive me, but if I heard the Minister correctly, she said that she does not make that decision alone about where those funds will be directed. A number of Ministers will be involved and, therefore, she cannot say why any money may or may not be being directed to any particular place at the moment. I may have misunderstood totally.

Charles Chauvel: Speaking to the point of order.

Mr SPEAKER: I will hear the point of order further, briefly.

Charles Chauvel: At the Justice and Electoral Committee this morning the Minister was quite clear that she is the lead Minister for the fund and for the sector, and if—

Mr SPEAKER: Order! [Interruption] No, no. Order! The member must resume his seat. That would be the subject of a further supplementary question, not a point of order. If the member thinks that the Minister’s answer was incorrect or inadequate, he has good material for a further supplementary question: why did she say at the select committee such and such? The member is welcome to do that, but not to raise it by way of a point of order.

Iain Lees-Galloway: Has the Minister used any justice sector resources to facilitate negotiations with supermarkets on the Alcohol Reform Bill, and has she made any deal with the supermarkets to weaken the current Alcohol Reform Bill?

Hon JUDITH COLLINS: I generally do not make deals.

Economy, Sustainable—Minister for the Environment’s Statements

GARETH HUGHES (Green): My question is to the Minister for Climate Change Issues and asks: does he agree with the statement made by the Minister—[Interruption]

Mr SPEAKER: Order! I apologise to the member. I want some respect shown to a member at the back of the House, please.

8. GARETH HUGHES (Green) to the Minister for Climate Change Issues: Does he agree with the statement made by the Minister for the Environment, Hon Amy Adams in Rio, that, “Money spent on fossil fuels is money that could be spent on other sustainable development priorities”, and will the Government re-allocate the $889 million for ETS credits in Budget 2012 towards sustainable projects and a green economy?

Hon TIM GROSER (Minister for Climate Change Issues): I certainly do agree with Minister Adams’ statement at Rio, and that is the reason why we set up, in June 2010, a group of countries to try to press long term for fossil fuel subsidy reform. As it stands, that group includes Costa Rica, Denmark, Ethiopia, Finland, ourselves, Norway, Sweden, and Switzerland.

Mr SPEAKER: This is a primary question, so the Minister should really answer the bit that asks “will the Government reallocate the $889 million …”. I mean, this is a primary question.

Hon TIM GROSER: Speaking to the Speaker’s point, I considered that there were two separate questions, and I answered the first part of the question. But if the Speaker would like it, I can very easily answer two questions at once.

Mr SPEAKER: Order! I am on my feet. Primary questions must be answered in full. If it is deemed that the question is in order, it must be answered in full. In respect of supplementary questions, there can only be one question asked, and if there is more than one part to a question, the Minister is welcome to answer just one part. But a primary question must be answered in full.

Hon TIM GROSER: Thank you for the clarification. No, we will not be reallocating the allocations we have given to trade-exposed industries, for the very simple reason that were we to do so when those trade-exposed industries are facing competition internationally from similar industries that do not face a price on carbon, it would create such a huge increase in unemployment—and I am sure that the member would be at the forefront of any queue to complain about the unemployment were we so reckless as to follow the advice.

Gareth Hughes: Does the Minister stand by his statement made in 2010 that it would be incoherent to have a market price on carbon and to be subsidising it; how, then, does the Minister stand by the Government’s spending of $25 million subsidising the acquisition of petroleum exploration data to give to the petroleum industry, and given that this Government in the next financial year has $1.5 billion of free emissions trading scheme credits to polluters?

Hon TIM GROSER: Yes, I certainly do stand by that statement. It is time people stopped throwing around these loosely worded concepts of subsidies and started to reference them to the international jurisprudence that defines us. Although I would love to elaborate in detail on the Agreement on Subsidies and Countervailing Measures code and the issues of specificity, actionability, and serious prejudice, were I to so elaborate I think my friend and colleague the Leader of the House would have convulsions—and we do not want that.

Louise Upston: Is the Minister aware of any other country with a fully comprehensive ”allgases, all-sectors” emissions trading scheme?

Hon TIM GROSER: No, and I would like to elaborate on that. Even the EU emissions trading scheme exempts nearly 60 percent of EU27 GDP from the scheme.

Gareth Hughes: Can the Minister confirm that the New Zealand taxpayer is giving the oil industry in New Zealand $25 million of seismic survey data for free, and the taxpayer in the next financial year is paying $1.5 billion in emissions trading scheme credits?

Hon TIM GROSER: As far as I recall, it is a statement of fact that the Government is providing $25 million to assist in seismic exploration. But we are doing this so that we can stimulate an industry that, from memory, produces something like an $800 million return to the taxpayer, and it is a policy that I strongly support.

Gareth Hughes: Does he think the Government’s agenda of increasing petroleum exploration, giving hundreds of millions of dollars of taxpayers’ money to carbon polluters, and supporting the massive lignite coal developments in Southland is putting the interests of the next generation ahead of all other interests, and boldly doing the right thing, as 17-year-old New Zealander Brittany Trilford has asked all world leaders to do in Rio?

Hon TIM GROSER: No.

Employment, Seasonal—Recognised Seasonal Employer Scheme

9. MIKE SABIN (National—Northland) to the Minister of Immigration: What reports has he received on the benefits to New Zealand of the Recognised Seasonal Employer scheme?

Hon NATHAN GUY (Minister of Immigration): I recently received the results of the 2011 survey of the Recognised Seasonal Employer scheme, which show the scheme is working well. The Recognised Seasonal Employer policy was designed to help with seasonal labour shortages in the horticulture and viticulture industries where New Zealanders are unavailable. The research found that most employers in the scheme have enjoyed better quality, more productive workers and a more stable workforce. Many employers reported that workers in the scheme have helped their business to expand.

Mike Sabin: What feedback has he received on the Recognised Seasonal Employer scheme?

Hon NATHAN GUY: I have received some very positive feedback: 93 percent of employers surveyed say that the benefits of this scheme outweigh the costs. I am also aware that there has been some very good feedback from one particular MP, who took part in a television show last year working with workers in the scheme at Tendertips Asparagus farm in the Ōtaki electorate. That MP said: “I am now convinced that it’s a good thing for the workers, a good thing for employers, and a very good thing for the New Zealand economy.” And that MP was, of course, former Minister of Labour the Hon Trevor Mallard.

Police, Minister—Statements to Law and Order Committee

10. KRIS FAAFOI (Labour—Mana) to the Minister of Police: Does she stand by all the statements she made to the Law and Order Committee yesterday?

Hon ANNE TOLLEY (Minister of Police): Yes.

Hon Phil Goff: Why did she yesterday tell the select committee no less than four times that Budget 2012 did not represent a cut in real terms to police operational funding, when patently it does?

Hon ANNE TOLLEY: Because it did not. The police received a similar budget to the previous year, other than carry-overs, and that is the same amount of money.

Hon Phil Goff: When the police told the select committee that inflation was likely to push up their costs by $24 million this year, and the police operational funding only goes up by $8.891 million, does that not represent in real terms—that is, taking inflation into account—a cut of over $15 million this year?

Hon ANNE TOLLEY: Because this Government lives in the real world where we are in the middle of a global world recession, and the police, as I said yesterday—

Hon Phil Goff: I raise a point of order, Mr Speaker. It is apparent to me that in the Minister’s answer so far she is not addressing a very straightforward and clear question.

Mr SPEAKER: Order! I think the member has asked a very straight question. I think the answer should address the question rather than get into broader discussion first.

Hon ANNE TOLLEY: As I said in answer to that question in the Law and Order Committee yesterday, the police have received the same amount of money. They have been asked to live within their budget like every other ministry and department. That in no way represents a cut, which is a withdrawal of money from the Budget.

Hon Phil Goff: I raise a point of order, Mr Speaker. I had this problem four times in the select committee yesterday; I am having it again in the House today. Either it does represent a cut in real terms or it does not, and I cannot get an answer from that Minister.

Mr SPEAKER: Order! It seems to me the remedy is in asking the right question. [Interruption] Order! I think the issue being pursued seems to be what the Minister said yesterday, and I have got no idea what the Minister said yesterday. But it seems the problem is the Minister is answering in terms of actual dollars—in terms of cuts—and the member asking the question is trying to establish that if there is not a full adjustment for inflation, that that represents a cut. Now that is a debatable matter, and obviously the question has to be very clear if the member is to be able to pin the Minister down, and must not leave any wriggle room. So I do not believe I can pull the Minister up yet, because I have not heard yet a question that leaves no wriggle room in terms of what is actually being asked. It is no use hypothesising about whether things were adjusted for inflation. If the question is asking about cuts, the Minister has answered about cuts, and if the member wants to ask whether the Budget was inflation-adjusted, he should ask that. That is a different question.

Hon Phil Goff: I raise a point of order, Mr Speaker. You understand and I understand what the term “in real terms” meant. There was no room for wriggle room. The Minister is not answering the question—

Mr SPEAKER: Order! I did not hear the member ask a question whether the Budget in real terms was a cut.

Hon Members: He did.

Hon Phil Goff: I raise a point of order, Mr Speaker. I did.

Mr SPEAKER: Well, if he did, I invite him to repeat his question. I will listen very carefully.

Hon Phil Goff: When the police told the committee that inflation this year could be expected to add $24 million in costs to the police and that operational funding increases by only $8.892 million, does that not represent a cut of over $15 million in operational funding in real terms?

Hon ANNE TOLLEY: The difficulty is that it is what is called estimates. So there is an estimate of what inflation might be, and in the real world you have to wait and see what happens.

Hon Phil Goff: I seek leave to table a number of documents. The first document is a transcript of yesterday’s inquiries of the Minister about cuts in real terms—

Mr SPEAKER: Order! Can I just check. This was in public—

Hon Phil Goff: Yes, it was in public.

Mr SPEAKER: It is already available to members, then, so we do not table that.

Hon Phil Goff: This is a partial transcript. I can table, if you like, the whole CD-Rom—

Mr SPEAKER: Order! All members have access to that material, so we do not—[Interruption] Oh, I beg your pardon. I beg your pardon; the business has not been reported yet. Leave is sought to table that document. Is there any objection? There is objection.

Hon Phil Goff: I seek the leave of the House to table answers to questions Nos 150 and 155 to the Law and Order Committee, Vote Police 2012-13, where the police indicate quite clearly that the extra costs may represent $24 million, and that is in response to a second question that said: “Was there an increase or a decrease in real level of funding?”.

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

Hon Phil Goff: I seek the leave of the House to table a document from the Office of the Auditor- General briefing—just one clause—that backs up the figure of $8.892 million being the increase that the police get when their costs have gone up by $24 million.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is objection. [Interruption] Order! [Interruption] Order! That kind of interjection is not appropriate.

Kris Faafoi: Do personnel costs equate to 71 percent of the current total expenditure budgeted in 2012-13 for police?

Hon ANNE TOLLEY: I understand that is correct.

Kris Faafoi: I raise a point of order, Mr Speaker. This is a question that I put to the Minister in select committee yesterday and she refused—I was actually prevented from asking it.

Mr SPEAKER: Order! The member will resume his seat. This is question time today. The member asked a question; the Minister answered it. There is no point of order I can see available. The member may ask further supplementary questions.

Kris Faafoi: I raise a point of order, Mr Speaker. I am just wondering what kind of remedy I have—

Mr SPEAKER: Order! It is very simple. This is question time. The member can ask further questions that focus in on what the Minister said yesterday. There is nothing wrong with that, but the member does not take the time of the House with points of order when his question was answered perfectly appropriately.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. You could possibly have added the advice to the member that if he had received an incorrect answer with regard to confidentiality of the information yesterday at the select committee, he should complain now about a breach of privilege.

Mr SPEAKER: He should not. The shadow Leader of the House has been in this place now as long as I have and he knows that those sorts of issues are not raised by way of point of order in this House. He should know that.

Kris Faafoi: Given the fiscal pressures police face, can she guarantee that there will not be a cut in front-line police staffing and the closure of police stations?

Hon ANNE TOLLEY: Those questions were answered quite clearly to the member yesterday. The commissioner has made it very clear that there are no plans to close any police stations.

Hon Phil Goff: When the police cut staff and services because they need to find savings because of the rising costs that they face, will she accept responsibility for that, because she failed to stand up for her portfolio, and at least get compensation for rising costs; or will she blame the police, saying it is operational responsibility?

Hon ANNE TOLLEY: Quite the contrary. As I explained yesterday in the select committee the police are working through the Policing Excellence in a number of different ways. They are using 21st century technology, which has meant that much of the entry work and the bookwork is able to be done while out on the streets, while the police are still out in the community, without having to come back to police stations and fill in forms and use carbon paper. That means that has freed up a lot of the jobs in the back-room office that used to be done.

Hon Phil Goff: I raise a point of order, Mr Speaker. If you recall my question it was—

Mr SPEAKER: Order! The member’s question was so loaded with his views on matters that it did not comply with the Standing Orders and therefore he cannot expect me to ask the Minister to comply any more than he did in asking his question.

Court Facilities—Christchurch

NICKY WAGNER (National—Christchurch Central): To the Minister for Courts, what recent announcements has he made—[Interruption]

Mr SPEAKER: Order! I want to hear Nicky Wagner’s question. I invite the member to start again. I could not hear the question, because of interjections across the front of the House.

11. NICKY WAGNER (National—Christchurch Central) to the Minister for Courts: What recent announcements has he made regarding court services for Christchurch?

Hon CHESTER BORROWS (Minister for Courts): On Tuesday I announced the plans to build the new Youth Court on the marae at Ngā Hau e Whā. This is the location where we have been running the criminal list court and it has proved to be an excellent venue.

Rt Hon Winston Peters: Ngā Hau e where?

Hon CHESTER BORROWS: Whanganui dialect. The construction of a Youth Court on this marae will be very conducive to dealing with youth appearing before the Youth Court and will have facilities for other agencies to be housed within the same building.

Nicky Wagner: What benefit will the new courtroom offer to the wider court system in Christchurch?

Hon CHESTER BORROWS: When not in use by the Youth Court, the facility will be able to be used by other jurisdictions, increasing the capacity for the courts in Christchurch.

Charles Chauvel: Supplementary question—

Mr SPEAKER: Charles Chauvel. I will allow this supplementary question.

Charles Chauvel: Thank you, Mr Speaker. Does the Minister think it is acceptable that nearly half—27—of New Zealand’s 60 courthouse facilities are used for less than half of the time; if not, what plans does he have for improving the utilisation of court services in New Zealand generally?

Hon CHESTER BORROWS: There is currently a review of court utilisation and how court services will be provided in the future. There are a number of considerations to be made as to court placement, and their utilisation in terms of court hours is one of those important considerations.

Christchurch, Recovery—Rental Situation

12. DENIS O’ROURKE (NZ First) to the Minister for Canterbury Earthquake Recovery: Does he still believe that the best way to deal with the price increase in home rentals in Christchurch is to leave it to the market?

Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery): Yes, but with the qualification that the Government has provided temporary housing villages—soon that will be 75 residences—and financial assistance to earthquake-affected households, costing $330,000 per week in rental subsidies, alongside accommodation supplements, which have always been available. And we continue to pressure the Housing New Zealand Corporation to put more properties back into commission. We have ensured that the Earthquake Commission has paid $21 million towards the repair of council social housing. My colleague the Minister of Housing announced a $2 million grant towards 25 social houses to be built in Christchurch. He made that announcement yesterday. We have also taken moves to increase the supply of sections by inserting new chapter 12A in the regional policy statement. So this Government, although we believe in the market, has also taken active steps to ensure that there is a market.

Denis O’Rourke: What is the Minister’s response to the mother of two who was recently reported in the Press as stating that she has had to leave Christchurch because “the wages were so low, the rents getting so high and the ongoing hassles with insurance, EQC and Cera were so awful.”?

Hon GERRY BROWNLEE: Well, my first point would be that if that person has got a hassle with the Earthquake Commission and insurance, then it is surprising that she is renting. However, what I would say is that the rental prices charged in Christchurch are not disproportionate to other metropolitan centres. I would actually point the member to the same newspaper, the Christchurch Press, today, which reports “Landlords stunned at low response” to properties. The advice that is given to property managers there is that if they are finding they have properties with long waits before someone rents them, they will have to lower those rents. That is the market working. I would

also indicate to the member that today TradeMe shows that there are 245 houses available for less than $300 a week.

Denis O’Rourke: Is the Minister aware that home rentals in Christchurch have increased over the last year by up to $60 per week in some suburbs and by an average of $32 per week over the whole city, according to the Press; if so, what assurance will he give to Christchurch tenants about future additional rent increases in the short term resulting from departures of homeowners from red zone properties and demand from the influx of workers for the rebuild?

Hon GERRY BROWNLEE: The first point I would make is that the Christchurch Press is a very inaccurate source of information on these matters. He may rely on its information; I do not. What I do know is that there is a number of people in Christchurch—landlords, in fact—who are saying that they cannot rent properties, because people do not want to take them, and there are currently a total of 1,032 properties for rent in Christchurch.

ENDS

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