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Questions and Answers - February 27


strong>QUESTIONS TO MINISTERS

Economy—Initiatives Targeting Investment, Business Growth and Jobs

1. JONATHAN YOUNG (National—New Plymouth) to the Minister of Finance: What is the Government doing to encourage investment, business growth and jobs?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: Today in Auckland the Minister for Economic Development and I released the sixth and final progress report in the Government’s Business Growth Agenda. This latest report, which is called Building Capital Markets, updates on 50 initiatives that the Government is working on to provide a productive and efficient environment for both investors and the borrowers of capital for jobs and growth. Together with the five previous progress reports, which were on export markets, innovation, skills, infrastructure, and natural resources, the Government has now spelt out more than 300 initiatives that it has prioritised to assist businesses to become more competitive on the international playing field and to help them to be profitable and to invest and grow. It is only when that happens that we get the job growth that we are all working to see.

Jonathan Young: Why were capital markets, in particular, chosen as a topic for the Business Growth Agenda?

Hon STEVEN JOYCE: The global financial crisis brought home to everyone how imperative it is that markets function well, because we have seen around the world what happens when they do not. Compared with other countries our public equity markets are small as a percentage of GDP. For example, our listed market capitalisation is equivalent to about 30 percent of the size of our economy, compared with 85 percent in Australia and nearly 120 percent in the United States, so even though New Zealanders are saving more than they have in the past, they may not yet be taking advantage of investment opportunities that are open to them. We are working to encourage that because we have an ambitious target of lifting exports to 40 percent of GDP by 2025. That will require an extra $160 billion to $200 billion of new productive capital, or around 70 to 90 percent more than is currently invested in the export sector, and that is what we are working on through the capital markets report.

Jonathan Young: What needs to happen to reduce the cost of capital?

Hon STEVEN JOYCE: There is a broad range of areas we are working on to reduce the real interest rate premium that makes debt in New Zealand more expensive than in places like Australia or the US. In particular, factors that influence our borrowing costs being higher include our small capital markets, our higher levels of national indebtedness, volatility in the exchange rate, and low domestic savings compared with investment. We are seeing those ameliorated over time as we are proceeding through the Business Growth Agenda. For its own part, the Government also must continue with its responsible fiscal management. As well, reforms like those planned for the

Resource Management Act will help create an environment that encourages investment in the New Zealand economy.

Hon David Parker: Why should New Zealanders believe him when he says he is going to grow exports and jobs, when data released by Statistics New Zealand today shows the value of manufactured exports fell by nearly 7 percent and we know that 17,000 jobs were lost in the manufacturing sector in the past year?

Hon STEVEN JOYCE: I see the member is not referring to the fact that there was only 1 month’s data, but he is a trainspotter so he always likes to find something that can talk the New Zealand economy down. The reality is that both our goods exports and our services exports have grown over the last few years. In relation to job losses in manufacturing, the reality is that with increased mechanisation in manufacturing we have had that job loss situation for the last 40 years.

Hon David Parker: Has the Minister of Finance seen the latest forecasts from the New Zealand Institute of Economic Research, which see the current account deficit blowing out to more than 8 percent of GDP in 4 years; if so, why is he sticking to a plan that has failed to rebalance the economy towards exports and jobs?

Hon STEVEN JOYCE: Well, I did notice that the New Zealand Institute of Economic Research report is expecting significantly higher growth over the next 2 years. I would also note that if the balance of payments deficit did get to 8 percent—and we are not predicting that and neither is Treasury—it would be at levels last seen only under the previous Labour Government. In terms of a plan, I would back this plan as against that plan, which is the one-page plan released by the Hon David Parker. It calls to change gear.

Film Production, Employment Relations—Minister’s Statements

2. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister for Economic Development: Does he stand by all of the Minister of Economic Development’s statements made regarding the Hobbit dispute?

Hon STEVEN JOYCE (Minister for Economic Development): Yes, because in my experience both the current and former Ministers for Economic Development in this Government are fine and upstanding gentlemen.

Dr Russel Norman: Does he stand by the statement by the Minister for Economic Development in this House on 28 October 2010 when he said there had been “no request or … pressure from Warner Bros to change our law.”?

Hon STEVEN JOYCE: Yes. My understanding is that at that stage that was the situation. I would expand for the member in this regard that the information released yesterday just shows how much risk there was that The Hobbit movies would not be produced in this country.

Dr Russel Norman: Is the Minister aware that that statement was made on 28 October 2010 during the debate on the bill to introduce the law changes, so it came after the negotiations, and is he also aware of the correspondence from Carolyn Blackwood of Warner Bros on 12 October, which referred to its deep concerns with our employment law?

Hon STEVEN JOYCE: I am not aware of the details of those particular communications, but it is apparent that there was concern about whether The Hobbit movies would be produced in New Zealand. It is apparent that the law was changed and The Hobbit movies were produced in New Zealand.

Dr Russel Norman: How can the statement by the Minister for Economic Development on 28 October 2010 that there had been “no request … or pressure from Warner Bros to change our law.” be true when we have the email correspondence from Warner Bros stating its deep concerns with New Zealand’s employment law?

Hon STEVEN JOYCE: I have not seen the original quote the member is referring to, and, of course, there are differences in practice between what is a concern and what is requiring a law to be changed. But the fact remains that the Government moved to clarify a law that was obviously

causing concern for this industry. As a result of that, this industry has been far more successful in New Zealand, and this Government is very proud of that fact.

Dr Russel Norman: Will the Minister make himself familiar with the speech by the Hon Gerry Brownlee in this House on 28 October 2010, where Gerry Brownlee said, and I quote from Hansard: “I want to make it abundantly clear, again, that there has been no request or—the Opposition would say—pressure from Warner Bros to change our law.”; and, if that statement is not true, will he request the Minister to come to this House and amend it?

Hon STEVEN JOYCE: I have not had the opportunity to read that. I am working through Mr Brownlee’s speeches since 1996, since I have been in the House, because they are generally brilliant speeches, but I am only up to 2002 at this point, so I have a fair way to run before I get to 2010.

Dr Russel Norman: Does the Minister think it is a laughing matter when a Minister of the Crown comes to this House and misleads this House—directly misleads this House—by telling the House that there had been no pressure from Warner Bros when the email traffic released just yesterday proves that there was very significant pressure from Warner Bros to change our law?

Hon STEVEN JOYCE: Well, I think what is a laughing matter is the fact that this member talks constantly about creating jobs in the New Zealand economy but opposes every hands-on—

Dr Russel Norman: I raise a point of order, Mr Speaker. The Minister was not addressing the question in any way whatsoever. I want to know the answer to the question. Does he think it is a laughing matter when a Minister misleads Parliament?

Mr SPEAKER: I think the member ought to go back and reread his own question to the Minister. The Minister very adequately responded to and addressed that question.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I apologise for being somewhat late with this, because I thought our Opposition would have picked up the matter that there was an accusation in the House, unrefuted by the Government, of deliberate misleading the Parliament. I think that should not be allowed to stay on the record, because the right way of bringing that up is a breach of privilege.

Mr SPEAKER: I am advised that it was not a suggestion of a deliberate misleading of Parliament, and, if it was in the hands of the Government and they wanted to take objection, they are able to do so.

Dr Russel Norman: Will the Minister now familiarise himself with the speech by the Hon Gerry Brownlee on 28 October where Gerry Brownlee said that “there has been no request or … pressure from Warner Bros to change our [labour] law.”; and, if he discovers that I am in fact correctly quoting from Hansard, will he go to Gerry Brownlee and ask him to correct this statement, which is clearly untrue?

Hon STEVEN JOYCE: In answer to the first part of the member’s question, I may well at some point read that speech, but the Government has no concerns about the actions that it took to get The Hobbit movies and other movies produced in this country. It is because we like to be hands-on and actually achieve some things for the New Zealand economy.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. That is not the question that the Minister was asked. What he has sought to do now twice is to duck out of it by making a statement to do with another issue, but not to do with—

Mr SPEAKER: Order! [Interruption] Order! I do not need any more assistance from the member. [Interruption] I do not need any further assistance from the member. The member asking the question asked a two-part supplementary question. The Minister rose and very satisfactorily answered the first part of that question.

Dr Russel Norman: Will the Minister for Economic Development be correcting his clearly misleading statement that he made in this House during The Hobbit law debate that there had been no pressure from Warner Bros to change our labour laws?

Hon STEVEN JOYCE: I need to point out to the member that I was not the Minister for Economic Development at the time.

Dr Russel Norman: I raise a point of order, Mr Speaker. Nonetheless, he has responsibility. He is the Minister. He must answer the question.

Mr SPEAKER: I think the appropriate way forward is for the member to re-ask that question.

Dr Russel Norman: OK. Will the Minister for Economic Development come back to this House to correct the statement he made that Warner Bros had never pressured the Government to change the labour law, given that there is clear evidence that Warner Bros did pressure the Government to change the labour law?

Hon STEVEN JOYCE: I would repeat that I was not the Minister at the time, but, in any respect, the Government is very happy with the decisions it has made in regard to The Hobbit movies and to the legislation change.

Dr Russel Norman: I raise a point of order, Mr Speaker. Are you saying that he addressed the question, given that he is the Minister and there is continuity in ministerial responsibility—

Mr SPEAKER: No. No, I am not, and I think on this occasion it is appropriate that the member asks the question a second time, or now a third time.

Dr Russel Norman: I have got to remember.

Mr SPEAKER: Yes, it is varying a little bit. I appreciate that.

Dr Russel Norman: The essence of the question is that the record is very clear that the Minister for Economic Development said to this House there had not been any pressure or request from Warner Bros to change our labour law, yet the email evidence is very clear that Warner Bros did put pressure on New Zealand to change the labour law, so will the Minister for Economic Development correct the record in Hansard? [Interruption]

Mr SPEAKER: Order! I particularly want to hear the answer.

Hon STEVEN JOYCE: Well, I have struggled with this particular suggestion of the member, because my question is how far back do I go in terms of responsibility as Minister for Economic Development, because I am no more responsible for the statements of my good friend the Hon Gerry Brownlee than I could be for Jim Anderton or Trevor Mallard before them.

Hon David Parker: I raise a point of order, Mr Speaker. The problem with that answer is that he is responsible.

Mr SPEAKER: The difficulty I have here is that the question has now been asked three times. It is not for me to satisfactorily design any answer to the satisfaction of the member asking the question. It is now for the House and the public to judge that answer for themselves.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. With respect, given your ruling, the fact that you allowed the member to ask the member three times presumably indicates that the Minister had not complied with the Standing Orders in even addressing the question. So to leave it there, I think, is very unfair to the questioner, because the Minister still has not complied, given what you have just said, with the Standing Orders. That is grossly unfair to the questioner.

Mr SPEAKER: I think the Minister has addressed the question—I accept maybe not to the satisfaction of the member asking the question. There have been three opportunities. That is quite sufficient, and the matter now will be for the public of New Zealand to judge the answer.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker.

Mr SPEAKER: Is the member questioning my ruling?

Hon Clayton Cosgrove: No, I am going to ask you a question, Mr Speaker.

Mr SPEAKER: Well, no, you are not. You are going to raise a point of order.

Hon Clayton Cosgrove: Yes, I am. The point of order is this: is the new regime now, in effect, whereby a questioner—a member—can ask a question several times with your indulgence, and then, if the Minister has not complied with Standing Orders, that is it? They have worn out their welcome—

Mr SPEAKER: No.

Hon Clayton Cosgrove: —and the Minister gets off the hook?

Mr SPEAKER: I appreciate the point raised by the member. At the end of the time, I have stated that in my opinion the question has been addressed. I am not arguing that it has been satisfactorily answered to the questioner’s satisfaction or to that of any member of the Opposition. The question has been addressed and on that basis we are moving on.

Grant Robertson: Did the Minister for Economic Development become aware that the blacklist on The Hobbit movie imposed by Actors Equity had been lifted before 20 October 2010?

Hon STEVEN JOYCE: I am not exactly aware of that chronology, but I would point out to the member that there is no doubt that the damage caused by the blacklist had been done and the confidence of the industry was obviously affected, as is reflected—

Grant Robertson: I raise a point of order, Mr Speaker. We have the same problem here. We have the Minister for Economic Development, who is responsible for that portfolio and responsible for answering questions, and he has once again failed to answer a very direct question.

Mr SPEAKER: I thought the question was whether the Minister was aware, and he said he was not aware.

Grant Robertson: No. Do you want me to re-ask the question?

Mr SPEAKER: I think on this occasion that that is the safest way forward.

Grant Robertson: Did the Minister for Economic Development become aware that the blacklist on The Hobbit movie imposed by Actors Equity had been lifted before 20 October 2010?

Mr SPEAKER: And I would have thought that was adequately answered, but I give the Minister another opportunity.

Hon STEVEN JOYCE: Well, I will do it again. I am not aware of the exact chronology, because there was a lot happening at that time, but if the member wants to put it down in writing, I am sure we could address it for him. But the reality is that the damage, in any event, had been done in terms of the confidence of the industry.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Why are you allowing this Minister to get up and say “No, I am not aware of the detail that is being asked.”, and then to bombard the House with information that is not to do with the question? Why do you not sit him down, like you would anybody else?

Mr SPEAKER: Because on this occasion I was absolutely sure that that was the way the Minister answered on the first occasion. Mr Grant Robertson took a legitimate point of order, suggesting the question had not been addressed. I wanted to listen to that being addressed. The question clearly has been addressed, and on that basis we will move on, if there are any further supplementaries.

Prime Minister—Statements

3. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes. In particular, I stand by the statement that the Opposition spokesman on education, Mr Hipkins, is making so little progress against Hekia Parata that he has taken to pulling his hair out.

Mr SPEAKER: Order!

David Shearer: Which is correct: that the revenue from asset sales “could easily be $5 billion to $7 billion”, as he said yesterday, or that the numbers will “move around and may need to be revised downward”, as his finance Minister conceded yesterday?

Rt Hon JOHN KEY: Both of them are potentially correct, and they are not incompatible.

David Shearer: Does he stand by his statement “We’re delivering on our election promise, so we can free up between $5 billion and $7 billion,” given that Solid Energy is now considered worthless?

Rt Hon JOHN KEY: Yes, but, of course, that is subject to the Supreme Court ruling, which we will hear at 3 o’clock.

David Shearer: As someone who has worked for an investment bank, does he think it is a smart idea to sell a State-owned energy company when electricity demand is projected to be flat for at least a decade?

Rt Hon JOHN KEY: It is not for me to give investment advice to New Zealanders— [Interruption] Well, I know that the Prime Minister in Labour’s term got herself in trouble with securities law, but I do not intend to. It is not for me to give investment advice, but what I can say is this. If we go and have a look at the mixed-ownership model, and we go right back to when National started promoting that policy, we see that it led to us in 2011 undertaking a scoping study. That scoping study really did the work of what the mixed-ownership model companies would be much more subjected to, which is external analysis, external directors, continual disclosure to the NZX, and a capacity to have a better understanding of what is going on with the company. In my opinion, if the member is asking me whether that would make those companies stronger and therefore more likely to succeed, the answer to that is “Definitely.”

David Shearer: Has he contemplated cancelling his mixed-ownership model programme?

Rt Hon JOHN KEY: No, but I will let you know at 3 o’clock this afternoon.

Brendan Horan: Does he stand by his words in the Prime Minister’s statement on 29 January that he would continue to support KiwiRail’s Turnaround Plan, given that the near-fatal Morningside crossing accident would not have happened if track maintenance workers were still employed instead of having been laid off under KiwiRail’s Turnaround Plan?

Rt Hon JOHN KEY: Yes, I stand by that statement. Secondly, I would really urge the member, who is relatively new to Parliament, to be extremely careful about making statements that could prove to be very incorrect and extremely upsetting for families. The member has a responsibility as a member of Parliament to get his facts right, and I am not entirely convinced that they are.

David Shearer: What advice has he received about legislative change should the Supreme Court ruling be adverse to the Government’s mixed-ownership model programme?

Rt Hon JOHN KEY: I have not had any advice.

Rt Hon Winston Peters: Given that the Skycity expansion is the biggest single event in his ministry as tourism Minister and the biggest single event in Auckland at this present time—

Hon Craig Foss: The World Cup.

Rt Hon Winston Peters: —at this present time—which sees him go with officials, armed with taxpayer resources and money, to a meeting with Skycity with no pre-meeting record, no meeting record, no post-meeting record, and no contact with Skycity to find out whether it has a record, is it fair or unfair in those circumstances for the average New Zealand person to think that you as Minister are flat-out lying?

Mr SPEAKER: Please address it to the Minister, not to the Speaker.

Rt Hon JOHN KEY: Seeing as the member did not ask me a question, I am not going to answer it. It started with “Given”, buddy!

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. You know that I asked him a question. I set up the circumstances and asked him whether it was, in the circumstances, his lack of—

Mr SPEAKER: Order! Can the member please resume his seat. I listened very carefully to the question, and at the end of the question there was something about “is it fair”. I think if just that part of the question was given to the Prime Minister, the member would have more chance of his answering to the member’s satisfaction.

Rt Hon Winston Peters: I will say it slowly. Given that the Skycity expansion is the biggest single event in his term as the Minister—

Rt Hon JOHN KEY: I raise a point of order, Mr Speaker. Starting a question with “Given” is a statement.

Mr SPEAKER: We have heard—[Interruption] I am trying to assist the member on this occasion. It was a very lengthy question. We have all heard the “Given”. If the member could now just get to the question, which is “Is it fair?”, I will try to elicit a response for the member.

Rt Hon Winston Peters: My question very simply is: is it fair or unfair for the public of New Zealand to conclude after this denial in respect of no pre-meeting, actual meeting, or post-meeting record of either party that he, as Prime Minister, is flat-out lying?

Mr SPEAKER: Order! That is a very—

Rt Hon JOHN KEY: The member has not indicated which meeting he is talking about. I cannot answer that question.

David Shearer: If there is an adverse decision by the Supreme Court today, will he rule out cancelling the mixed-ownership programme?

Rt Hon JOHN KEY: It would be extremely imprudent of me to make a comment when we are 35 minutes away from a Supreme Court ruling. If I were to answer that question, what would happen is the muppets on the other side would jump up and down saying I was trying to run in front of the Supreme Court, and I do not intend to do that.

Health Targets—Progress

4. SHANE ARDERN (National—Taranaki - King Country) to the Minister of Health: What reports has he received on this quarter’s national health targets?

Hon TONY RYALL (Minister of Health): The latest quarterly report released today shows that district health boards have achieved four of the national health targets this quarter and made improvements in the other two. The results show that 95 percent of hospitalised patients who smoke were offered support to quit in the last quarter of last year, which means we have achieved this national health target for the first time. Our district health boards have performed nearly 4,000 more operations than planned, and, once again, we are well on the way to exceeding the target of increasing elective surgery volumes for New Zealanders by at least 4,000 discharges a year.

Shane Ardern: What other progress can he report on the Government’s national health targets?

Hon TONY RYALL: There has been an increase to 93 percent of patients admitted, discharged, or treated in emergency departments within 6 hours, which is an improvement compared with the last quarter in the same time last year. The national immunisation coverage of 8-month-olds increased by 2 percent, and the rates for Māori and Pacific increased by 5 percent and 3 percent respectively. The Government is committed to protecting and growing the New Zealand public health service, and we are seeing more high-priority front-line services being delivered as a result of the Government’s $14.1 billion investment in health this year.

Hon Annette King: Will he give a guarantee that no district health board is manipulating his 6- hour target for patients being admitted, discharged, or transferred from an emergency department— for example, by putting patients into other units so that the clock does not start when the patient actually arrives at the emergency department?

Hon TONY RYALL: Look, if you put that bluster aside, what I would be very clear to that member—

Hon Annette King: I raise a point of order, Mr Speaker. It was a very straight question with no bluster, and that is no way to start an answer.

Mr SPEAKER: I agree. If the Minister could address a very clear question that has been asked, I would be grateful.

Hon TONY RYALL: I am regularly assured that district health boards know that the Government’s very clear message to them is that we do not expect anyone to game the target. But I can tell that member that I am surprised she asks a question on emergency departments. When she was Minister of Health—

Hon Annette King: I raise a point of order, Mr Speaker. Apart from the fact that it was a straight question to the Minister on his performance, he did not answer whether he would give a guarantee.

Mr SPEAKER: I am ruling that the Minister adequately addressed the question.

Solid Energy—Former Chief Executive

5. Hon CLAYTON COSGROVE (Labour) to the Minister for State Owned Enterprises: Prior to his resignation as CEO of Solid Energy, on what date was Don Elder’s contract last renewed?

Hon TONY RYALL (Minister for State Owned Enterprises): I am advised that Dr Elder’s contract was last updated for employment law changes on 31 August 2012, although this is an operational matter. I am advised that no changes were made to pay or entitlements, and this has been confirmed by Mr Mark Ford, the current chair, and Mr John Palmer, the former chair.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. Given the noise, could he confirm the date. I could not hear it, I am sorry.

Mr SPEAKER: I am sure he can. Minister?

Hon TONY RYALL: I am advised that Dr Elder’s contract was updated for employment law changes on 31 August 2012, although this is an operational matter.

Hon Clayton Cosgrove: Given that 31 August 2012, according to the Companies Office, was the last date that the then chair of Solid Energy, John Palmer, held that office, does he think it is appropriate that an outgoing chair, on the day he leaves office, signs off a new contract, thereby locking in the incoming chair to a financial commitment that as a result would mean a far greater amount being paid by the taxpayer for Dr Elder’s subsequent severance pay?

Hon TONY RYALL: As I told the member yesterday, that same allegation he made yesterday was incorrect. The contract was updated—

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I asked the Minister whether, given that 31 August, according to the Companies Office, was the last official date that Mr Palmer was in office, it is appropriate for the outgoing chair to sign off a new contract, thereby locking in that commitment to the incoming chair, which has a direct impact on the severance pay the taxpayer would pay—

Mr SPEAKER: Order! The member has now repeated his question, and I think, considering the length of the question, it is only appropriate that the Minister be given an opportunity to answer it. If I look at Hansard, I am sure I will see that the Minister was about 2 seconds into his answer before the member raised the point of order, which is hardly helpful. Would the Minister like to respond to the question?

Hon TONY RYALL: As chairman, Mr Palmer was entitled to enter into whatever arrangement. It is my understanding that Dr Elder’s contract was updated for employment law purposes, and there were no changes to the pay or to the entitlements that Dr Elder received. This means that his—

Hon Trevor Mallard: The term.

Hon TONY RYALL: He did not have a fixed-term contract. He was, effectively, a permanent employee, operating under a contract since about the year 2000. There was no change to Dr Elder’s pay or entitlements. Therefore, there was no effect on what his contractual arrangements would be during the changes to his employment. I think it is quite wrong for that member to come into the House and make misinformed allegations. It is exactly the same as—

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. My point of order is very similar to Annette King’s. The question was answered. He then started to ramble on with extraneous words.

Mr SPEAKER: Has the member got a further supplementary question?

Hon Clayton Cosgrove: Yes. Is Dr Elder still employed and being paid in any capacity today by Solid Energy?

Hon TONY RYALL: I think in the statement that came out when Dr Elder announced his resignation it was made clear that he was going to be available to the company for a period of time; I think that period of time is still in existence.

Hon Clayton Cosgrove: Does he believe it was appropriate to reward the chief executive with a new contract on the day the outgoing chair officially left office, given the severe financial strain the company was under, the fact that Solid Energy was under month-to-month monitoring and the Minister was receiving month-to-month reports, and further that Dr Elder then subsequently resigned some months later?

Hon TONY RYALL: Dr Elder had an open-ended contract, so I think trying to paint it as a renewal is quite inappropriate. I have been assured by both Mr Ford and Mr Palmer that there were no changes to his pay and entitlements that would have affected any of his requirements thereafter. Can I say to that member that he is constantly misrepresenting the situation, like he did when he claimed $22 million—

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I raise the same point of order again. This member has a habit of answering questions and then rambling on with extraneous material.

Mr SPEAKER: It was a very—

Hon Clayton Cosgrove: You have ruled previously with Annette King that once the question is answered, the Minister should sit down and we get on with it. I just simply ask for consistency.

Mr SPEAKER: It was a very long question. It was equally a very long answer, but a satisfactory one.

Hon Clayton Cosgrove: How can the Minister characterise the re-signing of a contract with the chief executive of Solid Energy as anything but a renewal of a contract?

Hon TONY RYALL: Because the advice that I have received was that it was an open-ended contract, that what Mr Palmer was doing was seeking to regularise it for later employment law changes. I have been assured that there were no changes to his employment, pay, or entitlements that came as a result of that process.

Hon Clayton Cosgrove: Will the Minister give a commitment to the House today that he will initiate an independent inquiry into the governance and so-called financial management of Solid Energy, given that last year his Government valued Solid Energy at $1.7 billion as part of the asset sales programme, and now, according to his own Prime Minister, it is worth “less than nothing”? Will he give that commitment to the House today?

Hon TONY RYALL: No, I am not going to launch some sort of independent investigation into the governance of Solid Energy. The governance of Solid Energy, much of which was appointed under the previous Labour Government, was running that company and it was doing very well up until 2011. We had the scoping study. It identified a number of issues. And I agree with Trevor Mallard: the collapse of world coal prices is a most significant factor in this matter.

Hon Clayton Cosgrove: I seek leave to table a document showing that John Palmer was reappointed in 2009—

Mr SPEAKER: The source of the document?

Hon Clayton Cosgrove: I believe it is from the annual report.

Mr SPEAKER: The annual report is very available to all members.

Screen Production Industry—Government Support

6. Dr JIAN YANG (National) to the Minister for Economic Development: What support has the Government given to the film industry in New Zealand?

Hon STEVEN JOYCE (Minister for Economic Development): This Government has continued to support the Large Budget Screen Production Grant Scheme, which has supported the production of movies in New Zealand such as King Kong, The Chronicles of Narnia: The Lion, The Witch and the Wardrobe, The Adventures of Tintin, and, of course, The Hobbit. Also, in October 2010, we made changes to the Employment Relations Act to clarify the law in regard to those working in the film industry. This enabled workers in the industry to be deemed independent contractors unless they chose to have an agreement that they were employees. We have also

streamlined the immigration process for entertainment industry - related work visa applications. It is now easier for applicants who meet the criteria to work in New Zealand.

Dr Jian Yang: What recent successes have resulted from the Government’s changes?

Hon STEVEN JOYCE: The filming of The Hobbit in New Zealand is a recent and very successful example. This film resulted in jobs for many New Zealand actors, including seven lead dwarfs, 24 supporting cast, approximately 16,000 New Zealand actor days worked, 1,250 people paid as extras, and 7,200 extras’ workdays. It also resulted in nearly 7,000 domestic flights, 93,000 hotel bed nights, 1,800 rental cars hired, $9.1 million spent with local set construction, and $1.5 million spent with local food suppliers. And for Wellington, an economic impact report said that the world premiere of The Hobbit contributed nearly $12 million to Wellington’s economy during the week of the premiere late last year.

Dr Jian Yang: What tourism benefits have resulted from the Government’s changes?

Hon STEVEN JOYCE: Well, very good ones. The media exposure for New Zealand tourism from the films of The Hobbit and the world premiere will be felt for years to come. The Nationalled Government realised the benefits that would come from making these films in New Zealand and is proud to have actively encouraged the Hobbit movies to be produced here from the very beginning. An example of the direct tourism benefit is the “100% Middle-earth, 100% Pure New Zealand” campaign launched by Tourism New Zealand. This video has received more than 800,000 views on YouTube, resulting in nearly 5,000 hours of video content being consumed. Research on the back of this campaign—and this is very important—shows eight out of 10 people saying that they are more interested in coming to visit New Zealand after seeing The Hobbit brand advertisements.

Dr Jian Yang: Is he aware of any opposition to the changes the Government has made to support the film industry and is making generally to support jobs and help grow the economy?

Hon STEVEN JOYCE: Yes, and it is a bit confusing. There are some groups that declare they are in favour of hands-on Government, but then they oppose it when the Government is hands-on. For example, in just the last 2 weeks these groups have opposed the Government encouraging a convention centre in Auckland and opposed, again, The Hobbit movies being produced in New Zealand. I have come to the conclusion that the only the thing the Opposition is actually hands-on about is getting its hands on tickets to The Hobbit premiere.

District Health Boards—Minister’s 2013-14 Letter of Expectations

7. Hon ANNETTE KING (Labour—Rongotai) to the Minister of Health: What expectations has he set for District Health Boards and subsidiary entities for 2013/14?

Hon TONY RYALL (Minister of Health): I would like to welcome the member back into her responsibilities. The expectations summed up in the letter of expectations to district health boards and subsidiary entities for the 2013-14 year are available on the Ministry of Health website. They have been there since 6 February. The headings in the letter are: “Better Public Services: Results for New Zealanders”, “National Health Targets”, “Care Closer To Home”, “Health of Older People”, “Regional and National Collaboration”, and “Living within our means”. I can also advise that the Government will be investing more money in health this Budget, and this contrasts with the ongoing reductions in health spending in many parts of the world.

Hon Annette King: In light of that answer, is the new way to provide his “Better, sooner, more convenient care” health service for charities to pay for the bandages and dressings for children with skin infections in Northland and South Auckland, because the Government funding is not enough, and for charities to pay for medicines where a family cannot afford his new $5 prescription charges?

Hon TONY RYALL: The Government is making a very large investment in the rheumatic fever programme around the country and we welcome any organisation that wants to join with us in backing that. The member will remember that rheumatic fever was made a national health priority

in 2001 and that Government did absolutely nothing in the subsequent 7 years—a priority in 2001 and absolutely nothing was done until this Government put $24 million in. [Interruption]

Mr SPEAKER: Order! Supplementary question, Annette King.

Hon Annette King: Well, in light of that answer, why do the Minister and the Prime Minister not tell the whole truth about his flagship rheumatic fever programme: that charities are helping to fund it in South Auckland, because the district health board has not got enough money to be able to cover the 61 schools at higher risk of rheumatic fever? And can he tell the House whether all the funding has actually been allocated for the programme that he promised?

Hon TONY RYALL: I am advised that the ministry and the Counties Manukau District Health Board intend to spend $11 million in the next 2 years on rheumatic fever, and they appreciate the $95,000 that the Middlemore Foundation is contributing to the programme. This is an important programme because rates of rheumatic fever were excessive and grew dramatically between 1999 and 2008—a shameful record of Third World disease, neglected by the failed party opposite.

Hon Annette King: It’s time he manned up and took some responsibility.

Mr SPEAKER: Supplementary question. [Interruption] Order! The noise level now is getting quite excessive, from both sides of the House. Would the member please ask her supplementary question.

Hon Annette King: Why does he not—

Hon Paula Bennett: This is the fresh new face of Labour—the fresh new face.

Hon Annette King: Oh, come on. There’s the old fishwife over there.

Mr SPEAKER: Order! Does the member want to ask her—[Interruption] The Hon Paula Bennett, unless you can stop interjecting across the House, I am going to ask you to leave the Chamber.

Hon Annette King: Why does he not change his expectations of “Better, sooner, more convenient care” to “Worse, later, and very inconvenient” in light of the latest Quality of Life Survey, released yesterday, showing 46 percent of those who wanted to go to a doctor last year did not because it was too expensive, because general practitioner fees in some areas have doubled under his watch, and because poor children have to rely on charity to bail out their health services?

Hon TONY RYALL: No, because we would have to adopt Labour Party policies if we wanted to do that. This Government is determined to improve services for New Zealand, and the reason why we want to do that is that we are not prepared to accept that for the 6 years that that member was Minister of Health, the number of operations performed for patients went down. The budget went up, and the number of operations went down. We are not prepared to accept that. We are trying to provide better services for New Zealanders, in much tighter funding circumstances.

Buildings, Earthquake-prone—Proposed Changes to Policy

8. AARON GILMORE (National) to the Minister for Building and Construction: Has the Government changed the system for dealing with earthquake-prone buildings?

Hon MAURICE WILLIAMSON (Minister for Building and Construction): No, not yet. Right now a Ministry of Business, Innovation and Employment consultative document that outlines proposals for improving the earthquake-prone buildings policy system in our country is out for public comment, but it is only a starting point. We need the public’s feedback to set a national policy that balances risk versus cost. Submissions can be made up until 8 March, and I would encourage people to put one in.

Aaron Gilmore: Is the criticism of these proposals from a number of mayors valid?

Hon MAURICE WILLIAMSON: No, because we have not yet decided on any new policy. I would encourage all those mayors to carefully read the consultative document and then make a submission. I want to tell the House that the Government is listening to all those submissions. We will not be going to any extreme policy that sees “the main streets of all our provincial towns demolished”. There will be exemptions for things like heritage buildings. I truly believe that when a

discussion document has a picture of a pretty rumpty old woolshed and says that this will not apply to haysheds, woolsheds, and other used things, and then mayors say that is going to cause a whole lot of problems, they really do need a remedial reading course.

Aaron Gilmore: How much could changes to the earthquake-prone buildings policy system cost?

Hon MAURICE WILLIAMSON: If we use the figures based on the starting point that the royal commission has suggested, the estimated cost of this scheme would be around about $1.7 billion for the whole country. Given that the current earthquake-prone buildings policy that is in place is estimated to cost around $1 billion, it means that if we did adopt the starting point, we will have only about $700 million expenditure over 15 years. When I hear the mayors of Timaru south saying that in their region alone it will cost $1.8 billion just for them, I really do find that my gast is flabbered.

Wage Rates—Living Wage

9. DARIEN FENTON (Labour) to the Prime Minister: Does he stand by his statement that the living wage is “simplistic”?

Hon SIMON BRIDGES (Minister of Labour) on behalf of the Prime Minister: Yes, and for two reasons. The first is that the Family Centre’s living wage of $18.40 an hour is calculated on the basis of a two-adult, two-child family, whereas a lot of low-income earners are in different circumstances—for example, students working part-time. The second reason is that it assumes that paying much higher wages is costless, when it is not—it costs jobs. If all employers in the country paid a minimum wage of $18.40, it would cost an estimated 26,000 jobs.

Darien Fenton: When he said that providing New Zealanders with a living wage is not high on his Government’s agenda, was he saying that Kiwi workers should not expect to make a living from their work while he is Prime Minister?

Hon SIMON BRIDGES: No. Ultimately, above the minimum wage, what is paid is up for employers and their employees to negotiate.

Darien Fenton: Does he believe that the minimum wage of $13.75 an hour is enough for families to live on; if so, why do two out of the five children in poverty come from families in work?

Hon SIMON BRIDGES: What is very clear is that actually there is a range of circumstances. For people on the minimum wage with children, for example, there are a range of packages available to them from the Government. The truth of the matter is that actually our minimum wage, as a proportion of the average wage, is the highest in the developed world.

Darien Fenton: How is it fair that his Government is giving minimum wage workers a measly 25c pay rise, while at the same time it is splashing out on $23 million worth of bonuses for Solid Energy’s management?

Hon SIMON BRIDGES: What is very clear is that having a job is much better than not having one, and we are very conscious, unlike the other party, which does not seem to understand economic fundamentals, that the higher we raise the minimum wage, the more people are put out of jobs—7,000 under your policy.

Darien Fenton: Why is the Prime Minister still insisting that a $15-an-hour minimum wage will cost thousands of jobs when Treasury and the Ministry of Business, Innovation and Employment both say there is little evidence to support this, and his own Minister of Labour said this morning that there is no science behind that argument?

Hon SIMON BRIDGES: It is uncontroversial amongst good economists that the higher the minimum wage goes, the more jobs people do not get. At $15 an hour, it is about 7,000—a town.

Te Ururoa Flavell: Tēnā koe, Mr Speaker. Kia ora tātou. Does the Prime Minister agree that income inequality has increased in the last 30 years, and that increasing the minimum wage to $16 an hour would be a significant step in reversing that trend and achieving what the Living Wage

campaign also seeks—that is, the income necessary to provide workers and their families with the basic necessities of life, to enable workers to live with dignity, and to participate as active citizens in society?

Hon SIMON BRIDGES: No, because, with respect to the member, I think what is distinctly arguable is that at $16 an hour for the minimum wage we would end up putting a lot of people out of jobs. That would increase inequality, not the other way.

Television, Switch-over to Digital—South Island

10. NICKY WAGNER (National—Christchurch Central) to the Minister of Broadcasting: What percentage of households in the South Island have gone digital ahead of the digital switchover on 28 April 2013?

Hon CRAIG FOSS (Minister of Broadcasting): In the South Island 91 percent of households with TVs have now gone digital ahead of the switch-over of the South Island on 28 April. The West Coast of the South Island, along with Hawke’s Bay, successfully went digital at the end of September last year. There is a high degree of awareness in the South Island, at around 95 percent, of the need to go digital. Although some households may choose not to go digital, I encourage all those that intend to, to do so well before 28 April. Nationwide, 91 percent of all households have already gone digital, and are enjoying more channels, better pictures, and new services.

Nicky Wagner: What action needs to be taken for those households that want to watch TV after the digital switch-over?

Hon CRAIG FOSS: To keep watching TV, households need to go digital by getting FreeView, Sky, TelstraClear, or Igloo. You do not need to have a new TV to go digital, as practically any television can receive the signals, with the right equipment. There is currently a comprehensive public awareness campaign around the South Island to help people know everything they need to know about the digital switch-over before 28 April. People wanting to find out what they need to do to go to digital should visit www.goingdigital.co.nz or call 0800 838 800.

Kiwifruit Industry—Psa Outbreak

11. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister for Primary

Industries: Has he received a report from the Ministry for Primary Industries that identifies the pathway by which Psa bacteria entered New Zealand?

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

for Primary Industries: My predecessor, the Rt Hon David Carter, received a briefing from the Ministry for Primary Industries on the possible pathways by which Psa could have entered New Zealand. The report does not identify a single likely pathway, but does identify pollen and people movements as the most likely pathways. This report is available on the Ministry for Primary Industries’ website.

Rt Hon Winston Peters: Has he received any advice about a shipment of antlers from Shaanxi province in China to Kiwi Pollen Ltd in June 2009; if so, what was the advice?

Hon JO GOODHEW: I have not been given any advice that the Minister is aware of that.

Rt Hon Winston Peters: What assurances can he give the public that the Ministry for Primary Industries and its predecessor, the Ministry of Agriculture and Forestry, have been totally objective and rigorous in investigating the biosecurity breach by which Psa bacteria entered New Zealand and devastated the New Zealand kiwifruit industry?

Hon JO GOODHEW: Since the incursion that brought Psa to New Zealand there have been a number of reports. The first report was a business-as-usual report—the pathway tracing report—that looked at what could possibly have been the ways in which Psa came to New Zealand. The second report was commissioned by the director-general, Wayne McNee—an independent report called the Sapere report. That looked again at what the possible pathways of Psa into New Zealand actually were, and also made some recommendations. I am aware that there is one other report, again an

independent report, from a gentleman down in Dunedin, which has made a suggestion about where in fact the origin of Psa has come from. But I can assure the member that the recommendations are being looked at by the Ministry for Primary Industries, and that we take this matter very seriously indeed.

Rt Hon Winston Peters: Has the Ministry for Primary Industries used the research of Associate Professor Russell Poulter of the department of biochemistry at Otago University, who has undertaken genetic analysis to trace the particular Psa bacteria strain that entered New Zealand; if not, why not?

Hon JO GOODHEW: The Minister is aware of the report. The Minister is aware that the report suggests Psa arrived in New Zealand from China rather than Italy. This is not unexpected, but the research does not point to a definitive pathway into New Zealand. The Ministry for Primary Industries will continue to look at any new evidence that might suggest pathways and might suggest ways in which we can improve the biosecurity in New Zealand to prevent things like Psa coming into New Zealand again and affecting the industry as Psa has done.

Rt Hon Winston Peters: What assurances can he give the public that the investigation into the biosecurity breach by which Psa bacteria entered New Zealand has not been constrained or limited—has not been constrained or limited—in order to avoid opening up the Ministry for Primary Industries and its predecessor, the Ministry of Agriculture and Forestry, to legal action on the grounds of negligence and a failure to exercise a proper duty of care?

Hon JO GOODHEW: I can assure the member that this is being taken very seriously, and, in fact, the very independence of the Sapere report means that the Ministry for Primary Industries is taking it seriously and is not looking to conduct just an in-house investigation. Of course, the initial report was a business-as-usual pathway report, as I mentioned in my first answer.

Rt Hon Winston Peters: What does that mean?

Hon JO GOODHEW: The pathway tracing report. But then an independent report was commissioned—the Sapere report. I believe that points, in fact, to no covering off the opportunity to find out exactly what happened in this case.

State Housing—Progress on New Houses

12. HOLLY WALKER (Green) to the Minister of Housing: Is the Government on track to build the 2,000 new state houses promised by Rt Hon John Key and Hon Bill English over the next two financial years, or was the Minister correct when he said “I am not yet at the point where I can tick off and say they are going to meet all of those targets”?

Hon Dr NICK SMITH (Minister of Housing): Yes, I am now confident, having met the chair and chief executive of Housing New Zealand Corporation and having been on the ground and seen the developments that are occurring both in Christchurch and in Auckland, that we will, in fact, be able to build those 2,000 new houses in the next 2 years.

Holly Walker: Did he prevaricate about Housing New Zealand Corporation’s ability to meet the target because he knew that in the last financial year the corporation built only 68 houses and is clearly not in a position to increase its building programme by the 1,400 percent needed to meet the target?

Hon Dr NICK SMITH: No. I am just not in the business of giving false assurances. I was a new Minister—

Hon Clayton Cosgrove: What about ACC?

Hon Dr NICK SMITH: That is well-known. I am very proud of—[Interruption] Unlike ACC making a loss of $4.8 billion, it is now doing very well. But in respect of when you are a new Minister and you are asked whether you can give absolute assurances, someone from the other side may be prepared to do so. I said no, I want to check it out. I have now checked it out, and that is why I am confident that those houses can be built.

Holly Walker: Given that Housing New Zealand Corporation had a net loss of more than 300 houses last year, can he really deliver on the Prime Minister’s promise of 2,000 new houses, or will he have to give the Prime Minister some sage advice and tell him he is dreaming?

Hon Dr NICK SMITH: The members in the Greens may not have noted that over the last 2 years Housing New Zealand Corporation was dealing with the biggest natural disaster in New Zealand history, in which hundreds of homes were severely damaged in Christchurch. I think it is absolutely proper that the corporation has focused on repairing those existing houses rather than simply being solely focused on the building of new State houses.

Melissa Lee: How does the approach of the current Government to Housing New Zealand Corporation vary from that of the last decade?

Hon Dr NICK SMITH: The focus last decade was solely on the number of State houses, and maintenance was deferred. We have been far more concerned, firstly, about the quality of State housing; secondly, about aligning the housing stock by location and size to family needs; and, thirdly, ensuring that those most in need get priority for social housing, and also enabling the community housing sector to play a greater role.

ENDS

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