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Questions and Answers - February 21


QUESTIONS TO MINISTERS

Skycity, Convention Centre—Negotiations

1. GRANT ROBERTSON (Deputy Leader—Labour) to the Prime Minister: Does he agree that the Prime Minister certainly moved to the extent of saying that he himself offered regulatory relief, if so, were other bidders to build a convention centre in Auckland offered regulatory relief?

Hon STEVEN JOYCE (Minister for Economic Development) on behalf of the Prime

Minister: What the Prime Minister stated quite clearly in the answer to question No. 2 yesterday was that “regulatory relief has not been offered to Skycity. That may be part of the negotiations that they want, but, actually, all bidders were told that we were looking for creative solutions and it was a cash-strapped Government. Every bid was different. In fact, in the case of every bid, with the exception of Skycity, they were asking the Government for $300 million - odd to build it.”

Grant Robertson: I raise a point of order, Mr Speaker. The Minister’s answer just now equates, essentially, to a no to the first part of my substantive question. That is actually a quote given by you as Speaker yesterday interpreting the answer of the Prime Minister to be that he had “certainly moved to the extent of saying that he himself offered regulatory relief.” We now have a problem because Mr Joyce, answering on behalf of the Prime Minister, has come to the House today and effectively said no. So now we have the issue of your interpretation versus what the Prime Minister has actually said.

Mr SPEAKER: I thank the member for raising the point. The member cannot bring the Speaker into the debate. I am ruling that the question has been adequately addressed—though maybe not to the satisfaction of the member. The member has further supplementary questions that he can utilise to try to obtain the answer he wants.

Grant Robertson: I raise a point of order, Mr Speaker. The issue we have is that in effect it is not me who has brought the Speaker into the debate; it is the Speaker who has brought the Speaker into the debate by giving an interpretation that today has been contradicted by Mr Joyce answering on behalf of the Prime Minister. It leaves the Opposition in a very difficult position in terms of being able to hold the Prime Minister to account when an interpretation is given by the Speaker and then it is contradicted by the Minister.

Mr SPEAKER: I accept that the point being raised by the member is genuine, but I refer him to Speaker’s ruling 17/3(3) where it is clearly stated that it is out of order “to bring the Speaker’s name and opinions into a debate.” The member has further supplementary questions—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think there are two points that I would like to make. First, I would like to indicate to you that I contemplated writing a privilege letter yesterday based on your interpretation of Hekia Parata’s answer, which, if she had given it, would have been a clear breach of privilege. What I am trying to do is to highlight the danger of this

situation occurring. I think the other point that must be made is that the Speaker’s ruling to which you have referred refers to debate. This is not a debate; this is question time.

Mr SPEAKER: With respect to the member, this is a House of debate and clearly when we have question time there are issues of debate within question time. So I do not accept that part of the member’s point of order.

Hon Trevor Mallard: I would like to continue that, because dozens of Speakers before you have ruled that there are rules for debate and there are rules for question time, and they differentiate. You do not bring the Speaker into debate. We were not; we were quoting him at question time, and that is something that is quite different and quite proper. Your opinion, like anyone else’s, can be quoted.

Mr SPEAKER: I took careful advice on this issue from the Clerk prior to the beginning of question time and I have concluded that the issue of bringing the Speaker into the debate applies equally to question time.

Hon David Parker: I raise a point of order, Mr Speaker. I think the difficulty arises where the Speaker interprets the answer, because members on both sides are then left not able to refer to what is then put in Hansard by the Speaker in any way other than to pretend a fiction. We have here the Prime Minister saying that the interpretation that the Speaker put on the Prime Minister’s comments yesterday was wrong. I think that leads to the view that I think has been put by Mr Brownlee previously, as well as by Opposition members, that this is where we get to when the Speaker interprets the answer that is given by a Minister rather than requiring the Minister to answer for him or herself.

Rt Hon Winston Peters: I do not think that New Zealand First would oppose the proposition that you can interpret the Minister or the Minister’s answer, providing that that is the answer that binds the Minister as well. If the Minister wants to be excused from that, they must get up and immediately rebut it; otherwise it stands in their name, and it means we can have a meaningful question time.

Mr SPEAKER: I accept the points raised are genuine. I accept the difficulty with this particular issue is my attempt to interpret an answer yesterday. The difficulty I am faced with is that on numerous occasions yesterday members who had asked a question then felt that question had not been adequately addressed. In future what I will do is not attempt to reinterpret the answer, but will rule simply whether the question has been addressed to my satisfaction, and, therefore, I do not think that members can expect me to continue to justify the decisions that are made. The situation we have here today is that we are now relitigating rulings that I made yesterday, which will lead only to disorder. So I am concluding this matter. I am inviting the member to ask supplementary questions if he wishes to, otherwise we will move to question No. 2.

Grant Robertson: Is the Deputy Auditor-General’s finding correct, that his “Chief of Staff asked SkyCity for details of the regulatory relief it would seek in return.” for fully funding the convention centre.?

Hon STEVEN JOYCE: The chief of staff made it very clear that the Government had no money for the centre and that Skycity needed to think outside the box and come up with something, which might not work—but he did not specifically offer regulatory relief, which I think is the point the member is suggesting.

Grant Robertson: I raise a point of order, Mr Speaker. It was a very specific question.

Mr SPEAKER: I missed the detail of the question. I invite the member to ask the question again.

Grant Robertson: Is the Deputy Auditor-General’s finding correct that his “Chief of Staff asked SkyCity for details of the regulatory relief it would seek in return.” for fully funding the convention centre?

Hon STEVEN JOYCE: I am not sure that that is a finding of the Deputy Auditor-General. Paragraph 3.25 suggests that Skycity told the Deputy Auditor-General certain things about a

particular meeting, but to suggest that that is a conclusion of the Deputy Auditor-General is, I think, stretching the description of the paragraph.

Grant Robertson: Is it correct that what is written in paragraph 3.25 of the Deputy Auditor- General’s report is true, that the chief of staff of the Prime Minister asked Skycity “for details of the regulatory relief it would seek in return.” for fully funding the convention centre?

Hon STEVEN JOYCE: I have no—what would be the word—suggestion that what Skycity told the Deputy Auditor-General was not what it interpreted the conversation to mean, but the Prime Minister’s chief of staff made it very clear that the Government had no money for the centre and they needed to think outside the box and come up with something that might work. It is quite reasonable for two people to take different meanings from a conversation.

Grant Robertson: I raise a point of order, Mr Speaker. The Prime Minister is responsible in this House for the actions of his staff—in this case, the chief of staff whom he has. It is a very simple question as to whether or not the statements contained in the Deputy Auditor-General’s report at paragraph 3.25 are, as the Minister has suggested, correct.

Mr SPEAKER: Would the member ask the question again.

Grant Robertson: Is the statement in the Deputy Auditor-General’s report correct when it says that “the Chief of Staff asked SkyCity for details of the regulatory relief it would seek in return.” for fully funding the convention centre.?

Hon STEVEN JOYCE: My answer remains the same. It is clear that paragraph 3.25 in the report is Skycity’s recollection of the meeting. The chief of staff’s recollection of the meeting is as I have repeated—what I said earlier. He made it very clear that the Government had no money for the centre and that they needed to think outside the box and come up with something that might work. If Skycity interpreted it in that manner, well, then it is obviously for it to report its own views to the Deputy Auditor-General.

Grant Robertson: Does he believe, then, that the Deputy Auditor-General believed Skycity’s account rather than his chief of staff’s account?

Hon STEVEN JOYCE: On behalf of the Deputy Auditor-General—

Hon Members: Ha, ha!

Hon STEVEN JOYCE: That is what he seems to be suggesting; that somehow I am answering questions on behalf of the Deputy Auditor-General. Quite fundamentally, I am not. I am answering on behalf of the Prime Minister. But the reality is that the Deputy Auditor-General reported an item in the report in terms of Skycity’s interpretation of a conversation. Whether the Deputy Auditor- General believes it or not, I have no idea.

Grant Robertson: Given that only one bidder was told that regulatory relief was a convention centre payment option and that that information came via the Prime Minister and his office, what responsibility does he take for the Deputy Auditor-General’s finding: “we do not consider that the evaluation process was transparent or even-handed.”?

Hon STEVEN JOYCE: The member seems to be leaping on from failing to get to the answer that he was seeking. But the key point is that this period of the process was prior to the evaluations and the expressions of interest. Actually what the Deputy Auditor-General said in relation to this part of the process, and I quote from paragraph 3.32 of the report, is that “We have no concern that the Government took steps to find out whether SkyCity’s development plans might be relevant to the discussions about an international convention centre. Nor is it unusual for a company like SkyCity to approach government officials and Ministers to explore whether there might be government interest in, and support for, its development ideas. Government and private business interests are free to talk to each other. It was sensible for both parties to explore whether they had a common interest.”

Grant Robertson: Would the Prime Minister care to point his attention to the next paragraph of the report, paragraph 3.33, where the Deputy Auditor-General discusses her “concerns about the apparent readiness of officials to support those discussions developing into more substantive

negotiations without preparing to give advice on the Government’s procedural obligations and options.”; what responsibility does the Prime Minister take for officials going down that path given they went there only after he stopped the tender process in August 2009?

Hon STEVEN JOYCE: Well, Mr Robertson and I can quote paragraphs of the report to each other all afternoon. I would perhaps conclude by quoting paragraph 3.44, which, to be helpful to the member, is actually at the conclusion of this chapter. That says: “the matter became moot because SkyCity did not produce a proposal at this time. Instead, the Minister”—which I presume is the Minister for Economic Development—“directed officials to proceed to an EOI process as part of a broader discussion of economic development possibilities.”

Grant Robertson: Why did he ignore the warnings from Treasury about “the probity of the bidding process” contained in a briefing note given to him on 12 November 2009?

Hon STEVEN JOYCE: He addressed the note yesterday. I would only go and repeat what was said yesterday that in relation to that note my understanding is that that was in relation to if matters were to proceed to a public-private partnership, which, of course, is noted in paragraph 3.43 of her report. In case the member does not remember, it did not go to a public-private partnership, so that also becomes moot.

Grant Robertson: Is the Prime Minister telling the House that he takes no responsibility whatsoever for the fact that a process around the convention centre, to quote the Deputy Auditor- General, failed to meet basic standards of “transparency and fairness.”, and is he taking absolutely no responsibility for that?

Hon STEVEN JOYCE: Having failed to make his points the member likes to make a sweeping generalisation at the end. The reality is the Deputy Auditor-General said there were no substantive issues in relation to the process and nothing that would change the outcome of the process, and raised some procedural issues in regards to the expressions of interest. The member just does not want to hear it.

Grant Robertson: How does the Prime Minister reconcile his statement in the House yesterday that “Television New Zealand entered a commercial agreement with Skycity to sell land that it owned” with the statement from the Television New Zealand (TVNZ) board chair, Wayne Walden, to the Commerce Committee today that there was no such commercial arrangement?

Hon STEVEN JOYCE: I am not quite sure how that fits into the frame of question No. 1, but, nevertheless, the Prime Minister was answering yesterday accusations of a “cosy deal” brokered by the Prime Minister between TVNZ and Skycity. Fundamentally it is obvious that that did not occur.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I would like to refer you to your ruling you made earlier in question time as to the difference between debates and question time where you indicated there was not one, and refer you to Speaker’s ruling 168/1 from 2011, Dr Smith: “The rules for question time are very clear. It is not a time when we have debates. We have questions asked,”.

Mr SPEAKER: I thank the member for his contribution. I will consider that. But he is now relitigating an earlier ruling of mine where I said to bring the Speaker into a question was bringing the Speaker into debate and that would lead to disorder.

Rt Hon Winston Peters: On the issue of regulatory or other relief, why did the PM say yesterday: “Its architects designed such a thing, realised they needed more land, worked out who owned the land, and approached Television New Zealand.”, when TVNZ has claimed overnight that that statement is false?

Hon STEVEN JOYCE: The Prime Minister accepts the TVNZ assurance accordingly. But I think the point is—and perhaps the member misses it—that that actually goes to underline the fact that there was absolutely no conspiracy about a TVNZ land purchase and sale, because, fundamentally, it obviously has not occurred.

Rt Hon Winston Peters: The question really concerns the Prime Minister: why did he say it yesterday, and when was the Government going to advise TVNZ of the regulatory relief it was prepared to offer Skycity, given that the deal would include TVNZ land?

Hon STEVEN JOYCE: The member is pirouetting. Yesterday there was some terrible conspiracy; today there is—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It was a straightforward question. I think Winston Peters might be nimble on his feet, but he is not doing ballet in the House. You, Mr Speaker, should make sure that Ministers answer questions in a straightforward manner.

Mr SPEAKER: I thank the member for his assistance. It would be helpful if the honourable Minister, on behalf of the Prime Minister, would give a clear answer to the question. Would the member Winston Peters please repeat the question?

Rt Hon Winston Peters: I will put the question again. When was the Government going to advise TVNZ of the regulatory relief it was prepared to offer Skycity, given that the deal would include giving away or transacting TVNZ land?

Hon STEVEN JOYCE: No deal has been concluded, so that matter does not arise. It has been raised publicly that some land might be needed. If a deal was done, that would be progressed at the time.

Rt Hon Winston Peters: Is it not a fact that on 6 September 2010, the Minister for Economic Development received an aide-mèmoire from Skycity asking the Government to “contribute” land owned by TVNZ as part of this deal; and, furthermore, that the ministry undertook extensive work to determine the valuation of the property and to clear up any Treaty of Waitangi claims on the property?

Hon STEVEN JOYCE: One of the criticisms of the officials from the Deputy Auditor- General’s office was of places where they did not do preparatory work. I am assuming the member is now being critical of them doing preparatory work in regards to a matter in relation to any land that might be required if a deal went ahead. But the reality is that no deal has been agreed, and, until such time, any arrangements in regard to some land are moot.

Rt Hon Winston Peters: On the subject of preparatory work, why does the Prime Minister consider himself so unaccountable to the New Zealand public and taxpayers as to attend official meetings as the Prime Minister and at the taxpayers’ expense when no records are kept at all of those meetings?

Hon STEVEN JOYCE: The Prime Minister meets and discusses things with people all over the country, informally and formally, at many different times. Generally, records are kept of formal meetings, but that does not mean there can be any expectations that any time the Prime Minister talks to somebody, that somehow there will be formal minutes.

Rt Hon Winston Peters: Did the Prime Minister go to the meeting in respect of the Auckland convention centre involving Skycity with the deliberate intention that no record be kept because any record would demonstrate just how sleazy these deals are?

Hon STEVEN JOYCE: I would just say I reject completely the premise in that member’s suggestion.

Dr Russel Norman: Does the Prime Minister accept the conclusion of the Deputy Auditor- General’s report that “we do not consider that the evaluation process was transparent or evenhanded.”?

Hon STEVEN JOYCE: This is a fair way from the start of the question, which was about what the Prime Minister offered or did not offer in regard to the very early meetings in this process. But, in terms of the expressions of interest process, the Deputy Auditor-General has made it clear that she feels that the—

Dr David Clark: Look us in the eye. Come on!

Hon STEVEN JOYCE: What a clown.

Mr SPEAKER: Order! If the members want to hear the answer, they should allow some silence for Mr Joyce to answer the question.

Hon STEVEN JOYCE: The Deputy Auditor-General made it absolutely clear—[Interruption] Mr Norman is over here in case you have not noticed—that she felt that the officials should have closed off the expressions of interest process earlier. The officials accept that criticism, and the Minister for Economic Development is working with the officials on further guidance in that regard. But she also makes it clear there are no substantive concerns about the conclusions reached through this process. There were some procedural issues. The Government accepts the procedural issues, but they were not substantive and would not have changed the outcome of the process.

Dr Russel Norman: I raise a point of order, Mr Speaker. I seek your guidance as to whether you think my very simple question as to whether the Minister accepts the conclusions has been answered or not. It did not appear to me that it had been.

Mr SPEAKER: I think the Minister addressed the question very substantially. In fact, he took too long to do so.

Incomes, Household—Growth

2. DAVID BENNETT (National—Hamilton East) to the Minister of Finance: What reports has he received on rising household incomes?

Hon BILL ENGLISH (Minister of Finance): Westpac has released a report on household income growth since 2008 showing that disposable household incomes adjusted for inflation have risen by $5.7 billion. This is a product of lower household interest payments of $3.3 billion—that is, they are paying less in interest—reduced income taxes of $6.3 billion; and welfare payments that increased by $2.7 billion, mainly due to an additional 70,000 people now being eligible for national superannuation compared with 2008. Offsetting these increases were reduced interest received on savings by those who have put savings in the bank—despite higher savings rates—and reduced profits for companies. Both of these things reflect difficult economic conditions over the past 4 years.

David Bennett: How has household savings changed recently and what reports has he received on household wealth?

Hon BILL ENGLISH: I think, as we are familiar with, official measures show a significant improvement in the last 3 years, from dissaving of 7.1 percent of household income in 2007 to just positive household savings more recently. Alongside that, though, there is a maybe confusing report from the Reserve Bank, which has recently highlighted that in measuring household wealth its statistics exclude some important items. For instance, when it measures household wealth it does not include equity in farms. It does not include equity in shares in some businesses and commercial properties and forests, and nor does it include some types of foreign assets held by New Zealanders. It estimates that when these items are included, household net wealth is in fact $167 billion higher than it thought, or around 25 percent—that is, the Reserve Bank’s revision of the numbers indicates households may be 25 percent wealthier than they thought.

David Bennett: What steps is the Government taking to increase savings and investment, and how will this improve New Zealand’s competitiveness and productivity?

Dr David Clark: KiwiSaver flip-flops.

Hon BILL ENGLISH: There is plenty to do—and I am pleased the member mentioned KiwiSaver, because probably the next most significant step is that on 1 April the minimum contributions rate to KiwiSaver will rise from 2 percent for employers and employees to 3 percent for employers and employees. We would hope that this may have some impact on national savings rates.

Hon David Parker: Does the Minister of Finance agree that the same Westpac report that he quoted says “this analysis does not extend to how these incomes were spent”, and so the figures he

quoted do not adjust for the increase in GST and other taxes, which largely offset the 2010 income tax cuts, except, of course, for the highest earners?

Hon BILL ENGLISH: I do agree that the report says that, but the member is drawing the wrong conclusion. In fact, what the figures show is that wage and salary earners and those in the welfare system have had their income supported by the Government, and their incomes have increased. Those who were depending on income from savings and from business have tended to have their incomes dropping. Generally, that would mean incomes at the higher end dropping and incomes at the lower end rising, or at least rising faster.

Hon David Parker: Is he aware that the latest statistics out from Australia today on income comparisons, which allow income comparisons between New Zealand and Australia to be updated, show that the income gap on a purchase price parity basis has grown from $121 in December 2008 to $179.94 per week, or a difference of $887 earned in New Zealand compared with the Australian—you know, on a purchase price parity basis—earning $1,067 a week?

Hon BILL ENGLISH: I cannot comment on that particular measure, but we would expect that since 2008 up until fairly recently Australian incomes have grown more, because their economy grew significantly faster there for a couple of years than the New Zealand economy. However, to pick up another one of the member’s favourite measures, in recent times the New Zealand dollar has risen against the Australian dollar, illustrating the fact that we have reasonably good growth prospects and there is quite a lot of questioning about Australia’s growth prospects. So it could be that over the next 5 years our incomes grow faster than theirs.

David Bennett: What other policies has he seen for saving and investment?

Hon BILL ENGLISH: I have seen put forward a number of other policies that the Government has disagreed with: capital gains tax on every business and farm, imposing large costs through a much more expensive emissions trading scheme, and printing money, which, actually, is a tax on savers and wage earners. We do not agree with those policies proposed by the Opposition parties.

Skycity, Convention Centre—Expressions of Interest Process

3. Hon DAVID PARKER (Labour) to the Minister for Economic Development: Was a document summarising the process involving SkyCity and the proposed convention centre, as referred to at paragraphs 3.17 and 3.18 of the report from the Deputy Auditor General, sent by MED or the Ministry of Tourism via email to DPMC on 12 November 2009, and did that email record Treasury advice that advice should be sought from the Office of the Auditor General to determine the probity of that process?

Hon STEVEN JOYCE (Minister for Economic Development): As the Auditor-General records in her report, an email dated 12 November 2009 was sent from one official at the Ministry of Economic Development to another one at the Department of the Prime Minister and Cabinet. The email included reference to a suggestion that should the Government choose to progress a public-private partnership to build a convention centre, then seeking advice from the Office of the Auditor-General in that regard was recommended. As the process the Government entered into was quite different from a public-private partnership, I am advised there was no need for Office of the Auditor-General advice regarding a public-private partnership.

Hon David Parker: Will the Minister forthwith release the document emailed to the Department of the Prime Minister and Cabinet on 12 November that recorded that Treasury advice to get advice from the Auditor-General as to probity?

Hon STEVEN JOYCE: I am not aware at this time whether it has already been released or not. I will certainly look into that for the member.

Hon David Parker: I raise a point of order, Mr Speaker. That was not my question. My question is: will he release it forthwith? It is a different question.

Mr SPEAKER: And I do not want to get into the issue of relitigating the question and the answer. The easiest way is for the Minister to repeat his answer, I think. Would the Minister please—does the Minister want the question again?

Hon STEVEN JOYCE: As I said to the member, I am not aware of the status of that document, whether it has been previously released or not. I will check for the member, and see what I can do in that regard.

Hon David Parker: I raise a point of order, Mr Speaker. That again does not answer my question. My question was not whether it has been released, or whatever is the status of the document. My question is: will he release it?

Mr SPEAKER: And the Minister has satisfactorily addressed the question. Does the member have further supplementary questions?

Hon David Parker: I raise a point of order, Mr Speaker. I still do not know whether the Minister is going to release it or not, so how can he have properly addressed that question?

Mr SPEAKER: He said he would look into it. Does the member have further supplementary questions?

Hon David Parker: Had any of the staff at the Ministry of Economic Development or the Ministry of Tourism expressed concerns about the probity of the process, or had discussions with Treasury about the probity of the process, before that part of the document was sent on 12 November; if not, why was that document prepared?

Hon STEVEN JOYCE: On behalf of myself, because I am the Minister, although I was not the Minister at the time, the reality is that that memo was sent. Whether there were any discussions between officials prior to that, I have no idea at this time.

Hon David Parker: Given that the Minister has today conceded that the Auditor-General was right that the document was sent by the Ministry of Economic Development, and the Auditor- General’s finding in section 3.31 of the report that in its private briefing—that is, the private briefing from the Department of the Prime Minister and Cabinet to the Prime Minister by way of a briefing note on 3 December—it referred to Treasury’s comments, does he believe that the 12 November email that was sent by his ministry was received by the Department of the Prime Minister and Cabinet?

Hon STEVEN JOYCE: I said in my answer to the primary question that an email was sent from one official at the Ministry of Economic Development to another official at the Department of the Prime Minister and Cabinet on 12 November 2009. I also said that it was in reference to a publicprivate partnership, should one be used to build a convention centre, and it recommended that if that was the case that it be discussed with the Office of the Auditor-General. Of course, it became absolutely moot because a public-private partnership was not proceeded with.

Hon David Parker: If the Minister is saying that the email was sent by the Ministry of Economic Development and was received by the Department of the Prime Minister and Cabinet, why did the Prime Minister deny yesterday that it was received by the department?

Hon STEVEN JOYCE: I am not aware exactly what the Prime Minister said yesterday. What he did say, I understand, was that he had not seen it. This is my recollection of it, but the member could direct a question to the Prime Minister in that regard. However, again, I would point out that even the Auditor-General says that this matter became moot because it did not have a proposal at this time. If the matter were to proceed to a public-private partnership, that would be a concern, but it did not have a public-private partnership, so the whole thing is just a wild goose chase.

Passports—Duration

4. Hon TARIANA TURIA (Co-Leader—Māori Party) to the Minister of Internal Affairs: Will he agree to follow the lead of many of our major trading partners including Canada, Australia, the United States, the United Kingdom and China, and introduce a ten-year passport option, and if not, why not?

Hon CHRIS TREMAIN (Minister of Internal Affairs): I am willing to consider changes, but I am not convinced that a 10-year passport is necessary. A better option may be to enable New Zealanders to get 5 full years of use out of their current passports. Moving to 10 years would require a large increase in the passport fees at a time when we have just reduced fees by almost 20 percent. The 5-year period also enables us to update security and technology features on the passport and on SmartGate much more quickly, to reduce counterfeiting, and to gain visa-free access to more countries.

Hon Tariana Turia: Does he agree that given that Māori and Pasifika families are larger, on average, and that they travel either to Pacific nations or to Australia, where increasingly their families are living, they carry a heavier financial burden if passports need to be renewed twice as often, and what does he intend to do about this inequity?

Hon CHRIS TREMAIN: Yes, I do agree that Māori and Pasifika families are larger, on average, but moving to a 10-year passport would create an estimated $200 million shortfall in the passports account. This would need to be made up by higher fees, which would be carried by users, and Māori and Pasifika families would fall into that category. We have already reduced the cost of a passport by close to 20 percent. I think all customers, including Māori and Pasifika families, are currently getting good value for money. And, importantly, because children’s passports are subsidised by nearly 50 percent, large families actually benefit over other passport users.

Hon Tariana Turia: So is the Minister saying that the reason for the reduction from a 10-year passport to a 5-year one was to enable the Government to accrue revenue?

Hon CHRIS TREMAIN: No, I do not say that, but I have a quote from someone else who said that “A shorter validity period will help New Zealand keep ahead of fraudsters by retaining a leading edge in technology.” That was said by Rick Barker in 2005.

Rt Hon Winston Peters: I seek leave to table a list of the First World countries with 10-year passport times and the Third World countries, like New Zealand, with 5-year passport times.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection. It can be so tabled. Document, by leave, laid on the Table of the House.

Prescription Subsidy, Change—Fiscal Impact

5. Hon MARYAN STREET (Labour) to the Minister of Health: What reports has he received about the estimated revenue to be generated or savings to be made from the increase in prescription charges from $3 to $5 an item?

Hon TONY RYALL (Minister of Health): Including articles, letters, ministry reports, and suchlike, as well as other documents, then I have received a number of reports—too many to list. The $2 per item increase, or maximum increase of $40 a year per family, is the first increase in 20 years, and it has helped fund cost pressures in new initiatives in health this year of $20 million.

Hon Maryan Street: Given the Commerce Commission’s strongly held view that the compulsory levying in the community pharmacy services agreement of $5 per prescription item was the same as price fixing and breached section 27 of the Commerce Act, what estimates has he received for savings or revenue if pharmacists choose not to charge the $5 amount?

Hon TONY RYALL: The information that I have received is that this should not have a significant impact on any of the estimates of the revenue.

Hon Maryan Street: Has he seen the reports of Joe Tiller of the Linwood Community Pharmacy in Christchurch refusing to charge $5 an item and being inundated with customers as a result; does this indicate anything to him about the affordability of medicines for people?

Hon TONY RYALL: Yes, I have seen those reports.

Hon Maryan Street: Has he seen reports of pharmacists already with shelves full of prescriptions waiting to be picked up, and how does he think this trend will impact on revenue or savings from the prescription charge increase?

Hon TONY RYALL: Yes, I have seen the picture the member is holding before in the House. I would say to members of the public that if they do have concerns about their ability to meet prescription charges, they should discuss them with their general practitioner or their pharmacist, or seek support from Work and Income New Zealand. The additional revenue raised from this prescription charge is being used in the health services to fund the expansion of cancer treatment services and additional support for others in the public health service.

Hon Maryan Street: Has he seen reports of correspondence he has received regarding the prescription charge increase, released under the Official Information Act to Pharmacy Today, in which at least one pharmacist has said these changes will seriously compromise patients’ safety; if so, what has he done to mitigate such risks?

Hon TONY RYALL: I think the feedback in various reports is different. What I can tell that member is that the Government has made it quite clear. This is the first increase for 20 years. The increase is essentially an inflation adjustment. The additional money is going into providing more cancer treatment services and cheaper doctors’ visits for under-sixes. But those who do have difficulty meeting prescription charges should talk to their doctor, their pharmacist, or Work and Income New Zealand, which is able to assist.

Hon Maryan Street: I seek leave to table a letter from the Commerce Commission to a lawyer acting on behalf of the district health boards, advising that it is their strongly held view that the compulsory levy clause is in breach of the Commerce Act.

Mr SPEAKER: Leave is sought to table the letter from the Commerce Commission. Is there any objection? There appears to be none. It can be tabled. Document, by leave, laid on the Table of the House.

Hon Maryan Street: I seek leave to table the resulting letter from the district health boards to all pharmacies, saying they no longer have to comply with the clause that they have been compelled to agree—

Mr SPEAKER: Leave is sought to table a letter from the district health boards. Is there any objection to that course of action? There appears to be none. It shall be tabled. Document, by leave, laid on the Table of the House.

Hon Maryan Street: I seek leave to table the February edition of Pharmacy Today, with the headline—

Mr SPEAKER: No. [Interruption] No. Order! That is something that is available to members. It is supplied to most members in the House.

Hon Maryan Street: I raise a point of order, Mr Speaker. I was very careful to listen to your explanation on Tuesday as to which items might be presented to the House. This is a subscriptiononly magazine. It comes out monthly. It is not—

Mr SPEAKER: The easiest way—

Hon Maryan Street: —a daily newspaper.

Mr SPEAKER: I accept the point. The easiest way to resolve the matter is to put the leave. Is there any objection to Pharmacy Today being tabled in the House? Yes, there is. There is objection.

Welfare Fraud—Prosecution of Partners of Beneficiaries

6. Peseta SAM LOTU-IIGA (National—Maungakiekie) to the Associate Minister for Social

Development: Why do the welfare fraud reforms he announced yesterday focus so heavily on relationship fraud?

Hon CHESTER BORROWS (Associate Minister for Social Development): Relationship fraud, such as claiming a domestic purposes benefit while being in a marriage or de facto relationship, is one of the most common types of fraud, and last year over $20 million of entitlements was taken illegally from hard-working taxpayers in this country. Because domestic relationship fraud is difficult to detect, it can go on for some time before it is detected. It is interesting to note that last year, of the 61 people who were charged with receiving entitlements in excess of $100,000, 41 of those were people in relationship fraud, largely women with not a lot of equity available to meet those and carrying the full weight of criminal responsibility. We think that having the other party in a relationship in respect of that getting away scot-free is unjust, unfair, and immoral.

Peseta Sam Lotu-Iiga: What is the Government doing to address relationship welfare fraud?

Hon CHESTER BORROWS: Yesterday I announced provisions that would mean that the nonbeneficiary party in a relationship fraud situation would be criminally responsible and responsible for the debt if they knew, or should have known, that fraud was being committed. It is unthinkable to me that someone could live for some time in a long-term relationship, in a marriage-type relationship, with a crime being committed in the home that they are living in while they are there and be able to get away with it scot-free. What I am pleased to note is that from the emails and the responses I have had today from good, decent, and hard-working Labour Party voters, they love it.

Jacinda Ardern: Given that all fraud should be pursued, has he suggested to the Minister of Revenue that he apply his new welfare provisions to tax fraud, including a new offence for spouses who ought to have known they were benefiting from fraud; if not, why not?

Hon CHESTER BORROWS: I have been having discussions with the hard-working Minister for Revenue, the Hon Peter Dunne. It is important to note a couple of things from the quite proper question that has been put. For instance, in respect of tax evasion, that is a fraud that is frequently committed away from the home by one member of a household. In respect of the criminal justice— [Interruption]

Mr SPEAKER: Order! Do the members want to hear the answer or not?

Hon CHESTER BORROWS: —system, as that member will know, the threshold of proof is beyond reasonable doubt. The next point to realise is this: relationship benefit fraud does not exist except for two people in a relationship, and the Government does not believe one person should get away from that scot-free.

Peseta Sam Lotu-Iiga: How does he respond to concerns that the changes may disadvantage women in an abusive relationship?

Hon CHESTER BORROWS: This is a very important point, and it is a point that has been raised over the last 24 hours by a number of people. The fact is that the law recognises that a woman living in an abusive relationship is not living in a relationship in respect of a marriage. What that means is this: for the purposes of the Social Security Act a woman living in an abusive relationship, or any person living in an abusive relationship, is not, by definition, living in a relationship in the nature of marriage, and so cannot be prosecuted—cannot be prosecuted—for benefit fraud.

Skycity, Convention Centre—Minister for Economic Development’s Involvement in

Expressions of Interest Process

Dr RUSSEL NORMAN (Co-Leader—Green): Thank you, Mr Speaker—[Interruption]

Mr SPEAKER: Order! The member has a right to have his question heard.

7. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister for Economic Development: Did the Minister for Economic Development sight the request for Expressions of Interest for Growing New Zealand’s share of the International Business Events Market and Strengthening the National Network of Convention Centres document before it was issued on 19 May 2010; and was it shown to other Ministers?

Hon STEVEN JOYCE (Minister for Economic Development): A draft expressions of interest document was seen by the Minister for Economic Development prior to publication. I am advised that there is no record of the draft document being provided to other Ministers.

Dr Russel Norman: Why, then, did the economic development Minister allow the expressions of interest document to go public without the inclusion of the key criterion, which was that the Government would not fund any capital costs for the convention centre?

Hon STEVEN JOYCE: That actually is discussed at some length, as the member may or may not be aware, in the Auditor-General’s report. In fact, the Deputy Auditor-General says that “[they] are not suggesting that the EOI document should have specified a budget or any particular figure, or provided information that would have prevented the competitive process from managing price effectively.” She goes on to make some suggestions in terms of what could have been said instead of what was said, but in no way was it suggested that the Government should say that there was no money for the centre.

Dr Russel Norman: I raise a point of order, Mr Speaker. I was asking why the Minister took the view that the expressions of interest document went public without the key criterion in it. The Minister told us about what the Deputy Auditor-General thought. That is fine, but I am interested in what the Minister thinks.

Mr SPEAKER: I think that is a fair point.

Hon STEVEN JOYCE: I think it is safe to say to the member that the Government took a similar view. It was not sure who would come up with what. The Government said that it would welcome creative ideas and suggestions as to how the construction and operation of an international-standard convention centre could be funded. As I said, the Auditor-General, while saying that it could perhaps have been a little more explicit in a couple of areas, was not suggesting that the expressions of interest document suggest that there would be no funding.

Dr Russel Norman: Why did Ministers tell Skycity, and Skycity alone, in October 2009 and again in March 2010 that a mandatory criterion for a successful convention centre bid was that the Government would not have to provide funding for any capital costs, yet the expressions of interest document issued by his department 6 months later did not include this critical piece of information?

Hon STEVEN JOYCE: In fact, I do not think the member is right in his use of words and the way they are phrased. The reality was that the Government considered its position and decided that the best approach was to put out an expressions of interest document, call for creative and innovative ways of funding a convention centre, and be prepared to accept and look at any proposals. But it also made very clear—and, in fact, Mr Brownlee, I understand, made clear at the time—to prospective bidders that the Government was very cash-strapped and did not have much money, so obviously not putting a huge amount of money on the table was very important from the Government’s perspective.

Dr Russel Norman: Does he accept that it was a fundamentally non-transparent and non - evenhanded process, as the Deputy Auditor-General found, because one of the bidders, Skycity, was aware that it was a fundamental criterion that there should be no capital funding from the Government, but the other bidders were not aware that that was a fundamental criterion of a successful bid?

Hon STEVEN JOYCE: The member is creating a straw man at least twice in that particular question, by suggesting something that I have not seen the Auditor-General to have said and suggesting the Government said something that I have also not seen that the Government said, and then asking whether that was a major problem. The reality is that the premises and the way that the member describes the process are incorrect.

Dr Russel Norman: Well then, is the Deputy Auditor-General creating a straw person when she said “one potential submitter”—that is, Skycity—“had a clearer understanding of the actual position on a critical issue … than … other potential submitters.”, and that critical issue was the issue of whether the Government was going to provide any funding for capital costs?

Hon STEVEN JOYCE: I would be appreciative of the member to refer to where that is said in the report. What I can say to the member in relation to the expressions of interest process is that the Deputy Auditor-General said that the consequences of the flaws in the expressions of interest document were relatively minor. Again, she felt there should have been more planning done in terms of the process, but, actually, the suggestion she made in terms of the expressions of interest document in relation to cost were actually not hugely different from what the Government did in the initial phase.

Dr Russel Norman: I raise a point of order, Mr Speaker. In light of the Minister’s request that I point to where that comes from, I seek to table one paragraph from the report, which is 4.61, where the Deputy Auditor-General says—

Mr SPEAKER: Order! The report is publicly available. It has been studied by many members.

Dr Russel Norman: When will the Minister read paragraph 4.61 of the Deputy Auditor- General’s report, where the Deputy Auditor-General says “the result was that one potential submitter had a clearer understanding of the actual position on a critical issue—that the Government did not want to fund any capital costs—than any other potential submitters.”—that is, that it was a fundamentally unbalanced, uneven, and non-transparent process?

Hon STEVEN JOYCE: If the member reads out something from the report, I am happy to read to the rest of that paragraph, particularly one sentence that I think is important. The Deputy Auditor- General then said “We accept that it is unlikely that this … made [any] material difference to the outcome.” This is the problem. The Opposition members, firstly, try to completely rubbish the process and put words in the Deputy Auditor-General’s mouth that are not actually there. The second thing underlying all of this is their absolute distaste for anything that the Government does to increase economic growth in this country.

Dr Russel Norman: Does he accept that the Ministers who had personally spelt out to Skycity that the Government’s bottom line was that it would not stump up any money for capital costs had a fundamental responsibility to ensure that the other bidders for the convention centre were also aware of this bottom line, because the Deputy Auditor-General is very clear that the other bidders were not aware of it?

Hon STEVEN JOYCE: I just reject the characterisation in the member’s question. He constantly does this. He says “This is what the Government said.” when it is actually patently not what the Government said, and then asks whether we regret that or should stop doing that, and tries to get us to actually respond to that. I reject the premise in his question.

Dr Russel Norman: Is it just a coincidence that out of the dozens and dozens of tendering and evaluation processes run by the Ministry of Economic Development, the only one that has been found by the Auditor-General to be not transparent or even-handed is the process kick-started and personally overseen by John Key?

Hon STEVEN JOYCE: Again, the member is seeking to smear the Prime Minister in that regard—[Interruption] He is, because the Auditor-General herself said that there was no concerns about the stage of the process where the Prime Minister was involved in having preliminary discussions with Skycity. The criticisms were in relation to the procedural matters of the expressions of interest. Frankly, the member is grasping at straws.

Dr Russel Norman: Is he aware that the definition of crony capitalism is an economy where success in business depends on close relationships between business people and Government officials; and, if we are to avoid falling into that trap, it is critical that the process is properly followed by the Government, and the Auditor-General was very clear that the evaluation process in this case was not balanced or even-handed, it was not transparent?

Hon STEVEN JOYCE: I accept that the definition of green capitalism is only something when you can be subsidised by the Government.

Pike River Mine Disaster—Progress of Pike River Implementation Plan

8. CHRIS AUCHINVOLE (National) to the Minister of Labour: What progress can he report on the Government’s Pike River Implementation Plan?

Hon SIMON BRIDGES (Minister of Labour): Earlier today I announced the creation of a new Crown agent. This was one of the main recommendations of the Pike River royal commission and was supported by the Independent Taskforce on Workplace Health and Safety. The workplace health and safety functions that currently sit within the Ministry of Business, Innovation and Employment will transfer to the new agency. We plan to introduce legislation to establish the Crown agent in June, with the agency expected to be in place by the end of the year.

Chris Auchinvole: How will the Crown agent fit with the wider health and safety reform programme?

Hon SIMON BRIDGES: The establishment of a Crown agent is a significant part of the Government’s reform programme and shows our strong commitment to addressing New Zealand’s unacceptable health and safety record. It will have a dedicated focus on workplace health and safety, and will enforce relevant regulations.

Andrew Little: Why don’t you say sorry?

Hon SIMON BRIDGES: If the member has got something to say, why does he not ask a question after? Further reform of our health and safety system—

Mr SPEAKER: Order! It shows the difficulty of members interjecting. Would the Minister answer the question.

Hon SIMON BRIDGES: Further reform of our health and safety system will be announced after the Government considers the bulk of the recommendations of the independent health and safety task force, which are due in April. Indeed, these reforms are on top of our Pike River Implementation Plan, which we will carry out this year.

Dairy Industry—New Overseas Investment

9. BRENDAN HORAN (Independent) to the Minister for Primary Industries: Does he support new foreign investment in the New Zealand dairy sector?

Hon JO GOODHEW (Associate Minister for Primary Industries) on behalf of the Minister

for Primary Industries: Yes. This Government has a goal of increasing exports as a percentage of GDP, from 30 percent to 40 percent by 2025. Increased investment into our primary industries will be crucial for this to happen. This investment will need to come from people overseas, as well as from New Zealanders—

Brendan Horan: I raise a point of order, Mr Speaker. A simple yes or no would have sufficed.

Mr SPEAKER: And I accept it would have, but the Minister is attempting to give more information to the member, and I would have thought the member would be grateful for that. Has the member got a supplementary question?

Brendan Horan: What proportion of foreign ownership does the Minister think is desirable within the New Zealand dairy industry?

Hon JO GOODHEW: I am not going to give you an absolute answer because I am not briefed on any statements that the Minister has made about aspiration. But what I will say to the member is that currently foreign ownership of farms in New Zealand is at a percentage in the order of 1 percent. However, the outrage we hear seems a little beyond that percentage.

Brendan Horan: Given that response, does the Minister think that it is a good idea that foreigners own over 40 percent of Fonterra’s derivative shares?

Hon JO GOODHEW: Fonterra asked the Government for the ability to raise the external capital, in the form of Trading Among Farmers. The Government passed legislation last year that enabled it. It has its own constitutional limits around how large the Trading Among Farmers fund is, and the fund investors have no voting rights.

Better Public Services Targets—Immunisation

10. Dr JACKIE BLUE (National) to the Minister of Health: What reports has he received on the Government’s Better Public Service target for immunisation?

Hon TONY RYALL (Minister of Health): The latest national health targets will be published next week, and they will show that we finished last year with 89 percent of 8-month-olds in New Zealand completing their first three courses of immunisation on time. This exceeds the national health target for immunisation. We were aiming to have 85 percent of our 8-month-olds completing their first three immunisations by July of this year, so we are 6 months ahead. This is really a testament to the hard work of our front-line immunisation teams, who have taken our country from having one of the lowest immunisation rates in the world to having one of the highest in the past 4 years.

Dr Jackie Blue: What initiatives have contributed to achieving this national health target?

Hon TONY RYALL: The Government has, for example, introduced automatic enrolment, so when babies are born they are now automatically enrolled in a general practice, and we have also taken several additional steps to assist preventing whooping cough, with making the vaccine available to pregnant mothers and also to front-line health workers. That has been free since 2009. What we know is that 70 percent of babies who contract whooping cough in the first few weeks of life catch it from their parents or other close family members, and what we know is that if kids begin their immunisations on time, this significantly increases the likelihood that they will receive all their childhood vaccinations.

Teachers and Support Staff, Payroll—Measures to Address Problems with Novopay System

11. CHRIS HIPKINS (Labour—Rimutaka) to the Minister responsible for Novopay: What steps, if any, has he taken to ensure that individuals and schools are not financially disadvantaged as a result of the Novopay debacle?

Hon STEVEN JOYCE (Minister responsible for Novopay): Where a school employee has not been paid there are two or three courses of action that could be taken. Firstly, the employee contacts their school administrator who contacts Talent2 for it to be rectified, or the school may make a direct payment to the staff member for which the school is later reimbursed, or the Ministry of Education is able to make a direct payment to any school employee. If any employee is charged any fees in relation to non-payment, the ministry will reimburse that employee. The wider question of course, and a very important question, is whether the work is being done to remediate the situation so these underpayments and non-payments stop occurring. We have instituted, with the help of the ministry and the acting Secretary for Education, a range of measures in that regard.

Chris Hipkins: Will employees who have had KiwiSaver or other superannuation contributions deducted from their salaries but not paid over to their scheme provider be compensated for lost returns that would otherwise have accrued, and if not, why not?

Hon STEVEN JOYCE: My understanding is that yes, they will be made good in those regards.

Chris Hipkins: Has he asked for or received any advice on whether the Government as the employer or Novopay as the overall payroll provider are in breach of their obligations under tax and KiwiSaver legislation as a result of non-payment of an employee’s contributions to their savings providers; if not, why not?

Hon STEVEN JOYCE: I have received some advice from the Inland Revenue Department in regards to the payment of PAYE and so on. I cannot recall exactly what that covered at this point in relation to the matters that the member raises. It is obviously crucially important that those people are looked after, and that things are made good. There is a lot of work going on to make sure that is the case.

Chris Hipkins: What steps is the Minister taking to ensure that KiwiSaver and other savings contributions that have been deducted from people’s salaries but not paid to their savings providers are paid to their savings providers, and when does he expect that to be sorted out?

Hon STEVEN JOYCE: The ministry and Talent2 are working through a process at this time to catch up with the issues that have led to the matters that the member raises. A schedule is provided to the Inland Revenue Department on a monthly basis. That can be updated and corrected. They are working back from the current month. That is the process they are going through. I would state again for those who are affected that it is not satisfactory at all. We are working very hard, and the ministry staff and the Talent2 staff are working hard, on catching up on those issues. But it is taking too much time, and we are continuing to work on it.

Civil Defence Emergency Management System—Response to February 2013 Tsunami Threat

12. KANWALJIT SINGH BAKSHI (National) to the Minister of Civil Defence: What advice has she received regarding the response of the New Zealand Civil Defence Emergency Management system to the 6 February 2013 tsunami threat?

Hon NIKKI KAYE (Minister of Civil Defence): I was very pleased to see firsthand the response from agencies involved in the civil defence emergency management system. I had the opportunity to be at the National Crisis Management Centre on 6 February. I want to thank all the local civil defence agencies for their prudent approach and swift response to the tsunami threat.

Kanwaljit Singh Bakshi: What key message does she believe should be taken away from this response?

Hon NIKKI KAYE: Firstly, it is very important that New Zealanders heed the warnings provided by the New Zealand civil defence emergency management. Secondly, New Zealanders should be aware that local civil defence agencies have the most relevant knowledge of hazards and conditions in specific areas and that this knowledge is used to ensure that all our citizens are kept safe.

Point of Order—Amended Answers

Hon TREVOR MALLARD (Labour—Hutt South): I raise a point of order, Mr Speaker. I deliberately left this until the end of question. It is to ask you whether the obligation to correct an answer when the Minister becomes aware that it is incorrect flows to people who are acting for that Minister. It has been widely reported that the Prime Minister has indicated that he misled the House yesterday on the Television New Zealand matter. I wonder whether either the Deputy Prime Minister or the Minister acting for the Prime Minister is going to correct that answer now.

Mr SPEAKER: I am advised that a correction to an answer can only be taken by a personal explanation by leave by that particular Minister or Prime Minister. He is not here today, so his opportunity, if he wishes to do so, would be next question time.

ENDS

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