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Questions and Answers - February 28

Questions To Ministers

Question No. 1 to Minister

Hon CLAYTON COSGROVE (Labour): I seek leave to have this question held over until the Minister for State Owned Enterprises is present in the Chamber. I am also advised that my colleague the health spokesperson would also like the—

Mr SPEAKER: Order! Leave is sought to hold this question over. Is there any objection to that course of action? There is. The member can ask his question.

Solid Energy—Financial Position

1. Hon CLAYTON COSGROVE (Labour) to the Minister for State Owned Enterprises: Does he take any responsibility as a shareholding Minister for Solid Energy’s precarious financial position?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Minister for State Owned

Enterprises: Yes, the Minister is responsible for exercising the powers of the shareholding Minister under the State-Owned Enterprises Act. The State-Owned Enterprises Act also lays out that the responsibility for the operational and financial performance of all State-owned enterprises, including Solid Energy, lies primarily with the boards of those companies, although shareholders and the Government are ultimately held accountable by the House and the public. The Minister is not responsible for the significant commercial risks faced by Government-owned businesses, and, in the case of Solid Energy, a 40 percent drop in the coal price and a substantial drop in orders for its export coal.

Hon Clayton Cosgrove: At the no-surprises meeting that he, along with Ministers English and Joyce, had with the then chair of Solid Energy, John Palmer, was he advised that the contract of the then chief executive of Solid Energy was to be signed off by Mr Palmer prior to his official departure date from office?

Hon BILL ENGLISH: The Minister met with the chair of Solid Energy on a number of occasions and, in the absence of a date, I do not know which meeting that member is referring to.

Hon Clayton Cosgrove: At the no-surprises meeting on 21 August 2012 did he make any inquiries as to the then chief executive of Solid Energy’s terms of employment; if he did not, how does he expect the New Zealand public to believe that he was not, yet again, asleep at the wheel as the shareholding Minister?

Hon BILL ENGLISH: I can only refer to the answers that the Minister gave yesterday, when he told the House that he was advised that Dr Elder’s contract was last updated for employment law changes on 31 October 2012, and that that would normally be considered an operational matter, not a matter for Ministers, and that he was advised there were no changes made to pay or entitlements.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. That answer refers to what the Minister was advised. I know it is a subtle difference. My question was what inquiries the Minister made at that specific meeting.

Mr SPEAKER: And I heard the question, and, considering that the Minister is answering on behalf of another Minister, I think the question was very adequately addressed.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I will invite you to—

Mr SPEAKER: Order! [Interruption] Order! Would the member please resume his seat. What the member is now attempting to do is litigate the quality of the answer by using the point of order system, and that is not acceptable. That will lead to disorder. If the member has further supplementary questions, I invite him to ask them; otherwise we will move to the next question.

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

Mr SPEAKER: No. If it is a fresh point of order, I will happily hear it, but if it is any attempt to relitigate a ruling I have made as to the satisfactory nature of that answer, then I will not allow further supplementary questions from the member. So the choice is his. Does he have a further point of order, or a supplementary question? Supplementary question, the Hon Clayton Cosgrove— [Interruption] Order! I certainly want to hear the question.

Hon Clayton Cosgrove: Did any additional benefits accrue to Dr Elder as a consequence of his contract being signed off on 31 August 2012?

Hon BILL ENGLISH: I think for the fourth time I can state this in the House: I am advised, on behalf of the Minister, that no changes were made to pay or entitlements. In fact, this has been confirmed by the previous chair and the current chair. I think that is the fourth time the Government has answered that question.

Hon Clayton Cosgrove: When he became Minister did he read each and every quarterly report of Solid Energy since 2009, which show the steady decline in the financial position of the company; if he did read each and every quarterly report of Solid Energy since 2009, why did he not act earlier?

Hon BILL ENGLISH: I imagine he did read the quarterly reports. Where the member’s assertion is incorrect is that it does not show from 2009 a steady decline in the operations of Solid Energy. I might also point out that when one decision was made to close the Spring Creek Mine, that member and his party bitterly accused the Government of abandoning workers and their jobs, but that was one of the early decisions to try to get this company back under control.

Hon Clayton Cosgrove: Given that the Government knew when it received the scoping study on 4 November 2011 that Solid Energy was in a precarious financial position, why has he and other Ministers continued to claim ever since that asset sales would raise $5 billion to $7 billion, when he and other Ministers knew full well that Solid Energy was not in any state to sell?

Hon BILL ENGLISH: The $5 billion to $7 billion was an estimate made, I think, perhaps 3 years ago now, certainly 2 years ago, and, as I will point out to the member, $5 billion to $7 billion is a range of $2 billion. The reason there was a range was that it allowed for the fact that these are commercial businesses that face market risks. In the case of Solid Energy some of those risks have eventuated, and unfortunately the taxpayer has to bear the costs of those risks because we own the company. Perhaps if it had been sold 3 years ago and we had collected a couple of billion for it, we would all be a lot better off.

State-owned Energy Companies, Sales—Progress

2. MAGGIE BARRY (National—North Shore) to the Minister of Finance: What progress is the Government making in its programme to offer New Zealanders minority shareholdings in energy companies?

Hon BILL ENGLISH (Minister of Finance): The Government share offer programme is on track. The Supreme Court yesterday ruled in favour of the Crown regarding the sale of shares in Mighty River Power. This confirms that the Government can proceed to sell up to 49 percent of the

shares in Mighty River in the first half of this year, in line with legislation passed by Parliament and promises made by National in the last election. On Monday Cabinet will consider a timetable and other details of the share offer. This will include laying out how New Zealanders will be at the front of the queue for the shares. We would expect, when the shares are sold, that the company will remain 85 to 90 percent in New Zealand ownership.

Maggie Barry: What are the main benefits of proceeding with the Government’s share offer programme?

Hon BILL ENGLISH: In the first place, it will free up $5 billion to $7 billion of cash, which we can use to invest in the Government’s other priorities. Secondly, it means that we will be able to avoid borrowing that $5 billion to $7 billion. Thirdly, it will give New Zealanders the opportunity to invest in these companies at a time when their savings have increased and they may want to diversify their growing savings. Fourthly, it will enable us to reduce the potential for the taxpayers to carry the burden of commercial risks that go wrong, as they sometimes can, as in the case of Solid Energy.

Maggie Barry: What proportion of these energy companies does the Government expect to be held by New Zealanders after the share offers?

Hon BILL ENGLISH: The Government has made it clear that New Zealanders will be at the front of the queue for shares. Including the Government’s majority stake of 51 percent, Ministers expect 85 to 90 percent of the shares will be held by New Zealanders after the public offerings. I am confident that we can achieve that. As of last December Kiwis had $115 billion in bank deposits. More than 2 million New Zealanders have amassed $14 billion in their KiwiSaver funds. They may be interested in buying shares.

Maggie Barry: What impact will the share offer programme have on the $240 billion of total assets that the Government holds on behalf of the taxpayers?

Hon BILL ENGLISH: The Government’s ownership of assets will continue to grow consistently. The taxpayer currently owns $240 billion worth of assets. The Half Year Economic and Fiscal Update in December shows that even after the sale of this $5 billion to $7 billion of assets taxpayer wealth will be $270 billion by 2017. That is an increase of $30 billion in assets, and some may argue that that is too rapid a growth in Government ownership of assets in a small economy.

Hon David Parker: Does Treasury advice show whether the loss of up to 49 percent of dividends and retained earnings from the sale of State assets make a Government surplus— operating balance before gains and losses—easier or harder to achieve?

Hon BILL ENGLISH: As we have discussed in this House before, there is a number of measures of the impact of the sales on the Government accounts, and the measure on the operating balance before gains and losses shows that we will be a bit behind on it—about $80 million in the first year in a budget of $70 billion. But the driving reasons for this are not just the accounting. The Government believes that the mixed-ownership model is a better way to manage the substantial commercial risks faced by taxpayers, a better way to build our public markets, and enables us to avoid $5 billion to $7 billion of debt—of extra debt—in a world that is increasingly hostile to debt.

Te Ururoa Flavell: Tēnā koe, Mr Speaker. Tēnā tātou katoa. What will the Minister do to ensure that any investment statement for a mixed-ownership model company will clearly and prominently explain that the Crown’s decision regarding its 51 percent shareholding must be “consistent with the principles of the Treaty”, otherwise the courts are able to review those decisions?

Hon BILL ENGLISH: The offer document will have to reach the current quite high legal standard of disclosure on all material risks that Mighty River Power might face. I would expect that, in the light of the attention that has been given to the Supreme Court case, that issue will be covered in the offer document.

Hon David Parker: Given that net debt in 2020 is now forecast to be around 26 percent of GDP, an increase of around $15 billion over that forecast in May last year, the difference being due to

downgrades in economic and job growth, does that not prove that growing the economy and jobs is the best way to pay down debt, rather than flogging off State assets like power companies?

Hon BILL ENGLISH: What it proves is that we need to do both—both grow the economy and use the Government’s very large balance sheet more effectively than we have done in the past. The Government’s debt target remains at 20 percent of GDP by 2020. We have fallen behind that target and we are going to have to work hard to make that target, because that would give us a reasonable level of debt to enable us to deal with the next recession whenever that comes along.

State-owned Energy Companies, Sales—Power Prices

3. ANDREW WILLIAMS (NZ First) to the Minister of Energy and Resources: Does he agree with Grey Power New Zealand that “Privatisation means not only higher prices, but suppression of energy efficiency and household energy options that reduce electricity sales and profits”; if not, why not?

Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery) on behalf of the Minister of Energy and Resources: No, the Minister does not agree. Regardless of ownership, electricity prices are set in a competitive market, and all suppliers face the same competitive pressures and constraints, no matter what their ownership is. I note that in the latest quarterly survey Contact Energy, the largest privately owned electricity company in New Zealand, has the lowest national weighted average for electricity retailers. As for energy efficiency, New Zealanders have embraced energy efficiency over the past few years, as evidenced by the 200,000-plus households that have insulated their homes under the Government’s programme. I note also the very favourable response to the Energy Efficiency and Conservation Authority Energy Spot advertorials, which screen seven times a week across a number of channels. To date 82 percent of New Zealanders have seen those programmes and recall them, and 41 percent report taking action on them. They are very good results.

Andrew Williams: Does he accept the research findings of Geoff Bertram of Victoria University that, relatively, New Zealand power prices have escalated far more rapidly than power prices in the United States, the UK, Japan, France, and South Korea; if so, what action will the Government be taking to address the rate at which electricity companies can increase prices?

Hon GERRY BROWNLEE: I note the irony that those prices have increased at a time when the industry is largely in public ownership, when we look at the fact that New Zealand’s largest privately owned electricity retailer, Contact Energy, currently offers the cheapest prices, and, when, in that same survey, 15 out of 21 regions in which the Powerswitch website operates reported that it is private companies that are offering the cheapest prices. So, I think, Mr Williams, you are on to it and we are on the right track.

Andrew Williams: Why are New Zealanders paying substantially more for power than consumers in many other developed countries?

Hon GERRY BROWNLEE: That is an assertion the member may make that I do not particularly agree with. What I do know is that under 9 years of a Labour Government we had an annual increase in excess of 8 percent. Since the National Government came into office, it has slowed to 4.5 percent.

Andrew Williams: I raise a point of order, Mr Speaker. I asked why New Zealanders are paying substantially right now. I did not want to hear about what happened under the Labour Government 4 or 5 years ago. I want to know about now.

Mr SPEAKER: Order! And the Minister having received the question has every right to answer it. Have the members got further supplementary questions?

Andrew Williams: What specific steps, if any, is the Government taking to reduce household electricity prices?

Hon GERRY BROWNLEE: I will resume where I was before, because the trend when we came to Government was rapidly escalating electricity prices. Under the 9 years of the previous

Government—I will not name them; they are your friends—we had an 8 percent per annum price increase. But under this Government, where we have reformed the market and put into place some forward sales, redistributed assets, and made switching power companies a strong possibility for New Zealanders, those prices have increased on average by 4.5 percent. That is a huge reduction, and we will continue looking at ways in which you can do that. I have to say the member points out very successfully to the House that the mixed-ownership model is likely to contribute to that trend in the years ahead.

Andrew Williams: Will the Government support New Zealand First’s policy of an electricity discount for SuperGold cardholders during winter months; if not, why not?

Hon GERRY BROWNLEE: That is a prospect that I personally have not considered.

Andrew Williams: What protection for household consumers will the Government provide as part of its mixed-ownership model programme, given these companies will no longer be subject to the social responsibility clause, which currently binds other State-owned enterprises?

Hon GERRY BROWNLEE: Let me make it clear again. Right now, and for a while now, the cheapest electricity available to retail consumers has been supplied by Contact Energy, New Zealand’s largest privately owned company. During the 9 years of the previous Government it was the State-owned companies that led the price rises at a rate of 8 percent per year. I think we are doing very well on this particular part of the New Zealand economy, and the member will do well to support more of it.

Andrew Williams: I raise a point of order, Mr Speaker. The Minister is not answering the aspect of the social responsibility clause of State-owned enterprises. He is deliberately—

Mr SPEAKER: I invite the member to repeat his question.

Andrew Williams: I will repeat the question. What protection—I say that again: what protection—for household consumers will the Government provide as part of its mixed-ownership model programme, given these companies will no longer be subject to the social responsibility clause, which binds other State-owned enterprises?

Hon GERRY BROWNLEE: The assertion behind the member’s question is that State-owned enterprises have acted in a socially responsible way, when clearly the evidence is demonstrably that they did not. I notice that one of the worst incidents that happened for cutting off power to anybody was done by a State-owned company. State-owned enterprises have not exercised that provision to any great advantage to New Zealanders. It is now the private sector that provides the cheapest electricity in this country.

State-owned Assets, Sales—Impact on Government Operating Balance

4. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Finance: Does the Half Year Economic and Fiscal Update 2012 state that the Government’s operating balance before gains and losses will be worse off by $441 million over the next five years if the Government proceeds with the partial sale of state owned assets; if so, why does his asset sale programme increase the Government’s budget deficit?

Hon BILL ENGLISH (Minister of Finance): Yes, it does show that. That is one measure of the impact of the sale of the assets on the Government’s books. Other measures show the Government in a slightly better-off position. For instance, in terms of straight cash, we will get more cash in than we forgo. However, any of those calculations are based on the assumption that interest rates on Government debt stay at 50-year lows, and that these companies continue to make the currently predicted profits. I think we have all learnt in the last couple of weeks that there is no guarantee of that just because these companies are owned by the Government. As in the case of Solid Energy, the forecast profits and dividends are not going to show up, so if we did not own it we would actually be much better off.

Dr Russel Norman: I raise a point of order, Mr Speaker. The primary question had two legs. It has been previous Speakers’ rulings that both parts of a primary question are to be answered. The

second part of the question—why the asset sales programme will increase the Budget deficit—was not answered, in my opinion.

Mr SPEAKER: I invite the Minister of Finance to address the second part of that question more specifically.

Hon BILL ENGLISH: It shows that because, on that particular measure, if you assume that current interest rates on Government debt remain the same and that the companies continue to make the currently forecast profits and dividends, then on the operating balance before gains and losses measure—I will not go into all the explanations of what that is—the Government’s books would be slightly behind. We, of course, have weighed that up against other facts, like the fact that we will avoid having to borrow another $5 billion to $7 billion. The logic of the member’s question is that the Government would be better off—

Dr Russel Norman: I raise a point of order, Mr Speaker. Standing Order 383(2) is very clear: “The reply to any question must be concise and confined to the subject-matter of the question asked,”. The Minister had answered the question.

Mr SPEAKER: And so must the question be. The Minister has now very adequately addressed the question, and it is over to the member whether he has further supplementary questions.

Hon David Parker: I raise a point of order, Mr Speaker. I ask the Speaker to consider why, when the member Russel Norman raised the point of order, which you accepted, you took a flick at him.

Mr SPEAKER: I did not. I acknowledged that questions need to be concise, and answers need to be concise. The question had been answered very satisfactorily, and I invited the member, if he wished to, to raise further supplementary questions.

Dr Russel Norman: Does the Minister agree that the operating balance before gains and losses measure is the main conventional measure of a Government’s deficit, and that asset sales increase the Government’s deficit, using that measure?

Hon BILL ENGLISH: It is the current measure, although I have to say it has got arbitrary elements to it, as any measure does. Whatever measure you pick—and the calculations are done against three or four different measures—in some the Government is a bit ahead, in some it is a bit behind. But the logic of the member’s question is that the Government should go—

Dr Russel Norman: I raise a point of order, Mr Speaker. The question was very specific. It asked whether the operating balance before gains and losses was the usual measure used. The Minister agreed with that. He answered that question, and he agreed that the $400 million is a deficit increase. He has finished answering the question.

Mr SPEAKER: No. If the Minister goes on for an unnecessarily long period of time, I will bring that to order. On that occasion, the Minister was very satisfactorily answering the question for the benefit of the member, and I think the Minister should have been allowed to continue his answer. We are going to get nowhere in this House today if every time a question is not answered to the satisfaction of the member asking the question, a point of order is raised that the answer is too long. If the member has further supplementary questions, I invite him to ask them.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think the point of order was not that it was too long; it was that it was out of order because the answer had been completed.

Mr SPEAKER: That is certainly not the way I took the point of order from the member. I took it that Dr Russel Norman had decided to his satisfaction that the question had been answered and did not need any further addition. But we are moving on. I am inviting the member to have further supplementary questions if he so desires.

Dr Russel Norman: I raise a point of order, Mr Speaker. The reason why I am insisting on a black and white interpretation of the Standing Orders is that on Tuesday you told us that Ministers would be kept to the black and white interpretation of the Standing Orders that they must only address the question, not answer it. So I am insisting that you apply the Standing Orders fairly.

Mr SPEAKER: The member has no right through either the Standing Orders or Speakers’ rulings to insist on a black and white answer. Does the member have further supplementary questions? Otherwise, I intend to move to the next question.

Dr Russel Norman: How can the Minister claim to be fiscally prudent when he intends to spend over $440 million on this particular Government programme?

Hon BILL ENGLISH: I do not know whether I can emphasise any more that although there is a calculation that has been made, the number is uncertain. According to the member’s logic, the Government could fix its accounts by buying every business in New Zealand, because they might make a return greater than the cost of debt. So why do we not borrow $100 billion and buy all the supermarkets and farms? Of course, the Greens will not have to do that; they will just print the money to fill the gap.

Dr Russel Norman: I raise a point of order, Mr Speaker. I ask you once again to apply the Standing Orders to the Minister. These are the orders of the House; I do not make them up—right. They say—

Mr SPEAKER: The member is now attempting to use the point of order process to debate the quality of the answer. If he continues to do that, we will move to the next question.

Dr Russel Norman: Can the Minister confirm that the claim of a $441 million cost to the asset sale programme by increasing the Budget deficit is not a claim made by the Green Party; it is made by his own department, called Treasury?

Hon BILL ENGLISH: Yes, I can confirm that Treasury has done that calculation, but, of course, that is uncertain. Last year it did a calculation about Solid Energy that has proven to be spectacularly wrong, OK? So we have not made a lot of money by keeping Solid Energy. These businesses are all risky, and if we were to follow the member’s logic, we could solve the Government’s Budget problem by printing $100 billion and buying every business in New Zealand.

Dr Russel Norman: Point of order, Mr Speaker.

Mr SPEAKER: Supplementary question?

Dr Russel Norman: Supplementary question, Mr Speaker.

Mr SPEAKER: Thank you.

Tracey Martin: I raise a point of order, Mr Speaker. Sorry, Mr Speaker, I know I am new, but I understood that points of order were to be heard in silence.

Mr SPEAKER: Yes, they are, and the member is now asking a supplementary question; otherwise, we are moving on.

Dr Russel Norman: Has the Minister seen the other Treasury estimate—if he reads Treasury papers—that shows that 95 percent of New Zealanders will not be able to buy shares in his newly privatised State-owned enterprises?

Hon BILL ENGLISH: I do not recall that estimate. If that was in a Treasury paper, I do not agree with it. We will get to find out over the next few weeks, when the Government offers the opportunity for pre-registration. Of course, there will be thousands of New Zealanders who are able to buy the shares who will decide not to because they think they have got better ways of spending the money, and that is one thing National believes in—Kiwis making their own choices about how to spend their own money.

Dr Russel Norman: I seek leave to table the Treasury request for proposal—[Interruption] I raise a point of order, Mr Speaker. We have had yelling—

Mr SPEAKER: Order! It is a point of order and it will be heard in silence. The member may start again.

Dr Russel Norman: I seek leave to table the Treasury request for proposal dated 24 May 2012, which says—

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

Dr Russel Norman: Will the Minister pledge to listen to the results of a specific referendum on asset sales, now that we have the numbers needed to have a citizens initiated referendum, or are we now living in a country where the board of Skycity Casino has the ear of the Prime Minister but this Government does not listen to ordinary New Zealanders?

Hon BILL ENGLISH: Well, the referendum that we think is the most credible one—and the Greens might have a different reason, because they prefer referendums where they pay their parliamentary staff to collect the signatures. However, we prefer the referendum—[Interruption]

Mr SPEAKER: Order! [Interruption] Order! The tone of the question was very political; a political answer has been given in return.

Hon BILL ENGLISH: There was a referendum in 2011, where we did not have to go and pay people to sign up. It was called the election. As I recall it, National and its coalition partners won the election. That member had had 12 months to persuade New Zealanders that asset sales were a bad thing, and he failed.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. Far from disputing your ruling, I am agreeing with your last ruling, but could I just ask you this question. Is it correct that that member asked, I think, at least three very specific and straight questions, with no political loading in them by my count, and on each and every occasion you allowed flicks, political comment, and irrelevant information to be hurled back at that member? I simply ask you this: are you going to be consistent with your last ruling—which I endorse—or are you going to be inconsistent, as you have been, in my view, with that member? [Interruption]

Mr SPEAKER: Order! That is quite a dangerous point of order, where you are questioning the ruling of the Speaker. I am attempting to be consistent with all my rulings. You must acknowledge that every question, every answer, has difficult connotations, but I gave my assurance on my election to this position that I would operate in an absolutely unbiased fashion, and I am genuinely attempting to do that. I thank the member for his point.

Welfare Reforms—Minister’s Statements

5. JACINDA ARDERN (Labour) to the Minister for Social Development: Does she stand by all her statements on Tuesday, 26 February 2013 in relation to her welfare reform programme?

Hon PAULA BENNETT (Minister for Social Development): Yes.

Jacinda Ardern: How can she claim her welfare reforms are a success when the number of people on all main benefits has increased by more than 60,000 since her reforms were introduced?

Hon PAULA BENNETT: As I said on Tuesday, I do not think anyone is surprised that benefit numbers have gone up when we were faced with the worst global recession, and, quite frankly, we should have a system that is there to support those who need it most. But as I also pointed out, since those reforms have come in, and in the last 2 years, we have actually seen benefit numbers going down for those on the unemployment benefit and considerably down, I think, which is significant, for those youth—

Hon David Parker: They’ve gone to Australia.

Hon PAULA BENNETT: —who are on the unemployment benefit. The member yells out that it was because they have gone to Australia. Well, less than 3 percent have actually gone to Australia who have gone off benefits, so that is not factually correct, either.

Jacinda Ardern: How can she claim her welfare reforms are a success when the number of people she claims did not reapply for an unemployment benefit because they got a job was exceeded by the number of people who did not reapply because they left the country in desperation?

Hon PAULA BENNETT: The member likes to try to make this number seem bigger than it is. I have given it to her factually in the House again, so bear with me while I get the number for her so that she can have it specifically. But, actually, less than 3 percent of those—

Hon Trevor Mallard: Fewer—“fewer than 3 percent”.

Hon PAULA BENNETT: —who have left the benefit have gone overseas. So—yep, “fewer than”; thank you for that. So it is quite clear. It is not the big number that she keeps trying to kind of throw around, and that is where it is at.

Jacinda Ardern: How can she claim her welfare reforms are a success by boasting that 21,000 left the unemployment benefit because they did not reapply, when double that number left simply because they moved to another benefit category?

Hon PAULA BENNETT: In some respects I am pleased the member has raised it, because the reality is that in the last 2 years under this Government we have seen the unemployment benefit numbers go down, and we are seeing fewer youth on the unemployment benefit. However, under that Government we saw the sickness benefit numbers increase by nearly 50 percent, we saw the invalids benefit numbers increase by 50 percent, we saw a significant increase in transfers between benefit—

Chris Hipkins: I raise a point of order, Mr Speaker. That was a very straightforward question from my colleague, asking the Minister to reconcile two different things. There was nothing to do with the—

Mr SPEAKER: Order! I invite the member to have a look at the Hansard as to how that question was initiated, how the question was started, by Jacinda Ardern.

Jacinda Ardern: How can she claim her welfare reforms are a success by boasting that 5,100 people have left the sickness benefit since her reforms, but in that same period another 7,684 went on, meaning the figures are worse now than when she started?

Hon PAULA BENNETT: The member can choose to cut and dice it how she likes, but I think we deal with the facts. She does not like the good news, that actually more people are in work now and off the benefit than they were 2 years ago, and that we are seeing good news happening. We can look at the ANZ Business Outlook today, which I just saw, which said that New Zealand business is at a 19-month high of confidence, and we can look at Fisher and Paykel, which says that another 100 new jobs are coming on board. I know the member does not like the good news, that actually maybe people are getting off benefits and having bigger and better lives—

Jacinda Ardern: I raise a point of order, Mr Speaker. I think that answer went on long enough. Obviously she—

Mr SPEAKER: I will determine whether answers go on for too long.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Although it is your responsibility, in the end, to determine whether or not that is the case, members do have the right to ask you to apply Standing Orders and Speakers’ rulings, as the member did when you dismissed her in a very rude manner.

Mr SPEAKER: Order! I appreciate it is the last day of term. If some members want to leave early and they continue to make noise throughout a point of order, they will be leaving early.

Jacinda Ardern: How can she—[Interruption]

Mr SPEAKER: Order! Someone will certainly be leaving very shortly. [Interruption] I am not picking which side, at this stage. Has the member got another supplementary question?

Jacinda Ardern: How can she give this House her criteria for success when it comes to her welfare reforms; if so, do these criteria include a greater use of sanctions, more people leaving the country, a reduction in training opportunities, fewer jobs, and 60,000 more people on main benefits than when her welfare reforms started?

Hon PAULA BENNETT: That member is not factually correct. The reality is there are New Zealanders who are better off today than they were 2 years ago, due to our welfare reforms. I encourage that, and I see the positivity in it.

Chris Hipkins: I raise a point of order, Mr Speaker. My colleague Jacinda Ardern asked the Minister what her criteria for success were, and she did not address that question.

Mr SPEAKER: I think, if you recall, she opened her question by asking how the Minister can claim success of the reforms, etc., and then went on with a very lengthy question.

Chris Hipkins: No, she asked whether she can give the House her criteria for success.

Mr SPEAKER: It is very hard now to relitigate the issue. That is not the way I recall the question being asked.

Hon Trevor Mallard: Have a look at the video replay.

Mr SPEAKER: I certainly will. Thank you very much for your help, Mr Mallard.

Mental Health Services, Youth—Prime Minister’s Project and Social Media Innovations

Fund

6. MELISSA LEE (National) to the Minister for Social Development: What announcements has she made on the Social Media Innovations Fund, part of the Prime Minister’s Youth Mental Health package?

Hon PAULA BENNETT (Minister for Social Development): Today the Prime Minister and I will be launching the Social Media Innovations Fund, which is part of the Prime Minister’s Youth Mental Health Project. The Social Media Innovations Fund will support organisations to connect with young people, getting them the help when they need it. For most young people, Facebook, Twitter, texting, YouTube, and probably a whole lot of other things that I do not even know about, are a significant part of day-to-day life. Youth mental health can be a difficult topic for young people to talk about, so we need to communicate with them on their terms.

Melissa Lee: What sorts of projects will this initiative fund to target young people?

Hon PAULA BENNETT: Later today we will announce five projects, which will receive oneoff grants totalling $100,000. There will also be weekends held where young people will get together with some pretty amazing entrepreneurs and talk about other initiatives that could also help. But one of these clever projects is a smartphone app where young people can actually put in their mood. If over time there is some concern with it, they can automatically be told to get help, where to go for it, and how to access services that they might need.

Melissa Lee: How is the Prime Minister’s Youth Mental Health Project giving greater access to improved youth mental health?

Hon PAULA BENNETT: The project in its entirety is about doing things differently to how we have done them in the past. We are building on existing programmes in schools, online, in families and communities, and in the health system, and taking an innovative approach that takes into account the unique needs of our young people.

Roading, Wellington—Transmission Gully Public-private Partnership

7. JULIE ANNE GENTER (Green) to the Minister of Transport: Why did he agree to building Transmission Gully as a Public Private Partnership, which would treble the cost to over $3.4 billion, as confirmed by NZTA CEO Geoff Dangerfield?

Hon GERRY BROWNLEE (Minister of Transport): I have not, it does not, and he did not in the context the member asserts.

Julie Anne Genter: I seek leave to table the unofficial transcript from the financial review of the New Zealand Transport Agency that was completed last Thursday where Geoff Dangerfield did confirm that it was going—

Mr SPEAKER: Has it been tabled in the House? [Interruption] Has it been tabled? I think—I am just checking with the Clerk—there is some difficulty in the tabling of that document. It was given in public, so it is not strictly confidential. If the member wants to seek leave to do so, I ask the member to put the leave again, and we will see what the House decides.

Julie Anne Genter: I seek leave to table the unofficial transcript of the financial review of the New Zealand Transport Agency last Thursday in the Transport and Industrial Relations Committee.

Mr SPEAKER: Leave is sought to table that unofficial transcript. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.

Julie Anne Genter: Why will it cost taxpayers over $30 million just to sign the contract for the Transmission Gully public-private partnership, as confirmed in answers to written questions from the Minister of Transport?

Hon GERRY BROWNLEE: The preliminary stages of any large motorway project like that are going to be an expensive process. That has always been the case. It was no different, for example, when the northern corridor was built up in Auckland, or the Christchurch Southern Motorway, or the Victoria Park Tunnel. There is a certain amount of cost involved upfront. Sadly, an enormous amount seems to get paid to traffic consultants.

Julie Anne Genter: How can the public-private partnership structure possibly be value for money when it will cost taxpayers over $30 million just to sign the contract and an additional $2.4 billion in interest payments over the lifetime of the project?

Hon GERRY BROWNLEE: No, the member needs to understand that you cannot compare the one-off construction costs with no maintenance costs by adding up 25 years’ of financing repayments and operational costs for a public-private partnership arrangement, and then say that it trebles the cost. That is like trying to compare apples with pineapples; they are not the same thing. Although you can make that assertion and it sounds good, it simply will not work. I note that the Greens were very happy when the Government loaned Auckland Transport $500 million to buy its new trains. Then, apparently, it is good, but if it is to get some roading for people, it is not so good.

Julie Anne Genter: What justifications can he offer for spending $2.4 billion of road users’ money just to pay back a private loan for a motorway that cannot even pass Treasury’s Better Business Cases for Capital Proposals guidelines instead of prioritising the Auckland City rail link, which is essential for Auckland’s future economic development?

Hon GERRY BROWNLEE: Well, because one of those locations is Auckland, and the other is Wellington, and it will be good for Wellington’s economic well-being.

Julie Anne Genter: I seek leave to table the City Centre Future Access Study, which demonstrates that Auckland’s economic development is essential—

Mr SPEAKER: The source of the document?

Julie Anne Genter: It is from the Auckland Transport—

Mr SPEAKER: Is it available on the internet and easily obtained?

Julie Anne Genter: It probably is available on the internet.

Mr SPEAKER: It probably is. No, we are not putting leave.

Julie Anne Genter: I seek leave to table a letter from the Minister of Transport to Auckland Council, which says that he is happy with the terms of reference for the City Centre Future Access Study.

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

Resource Management Act—Reforms

8. IAN McKELVIE (National—Rangitīkei) to the Minister for the Environment: What announcements has the Government made today aimed at improving our resource management system?

Hon AMY ADAMS (Minister for the Environment): Today I have launched a discussion document detailing an extensive programme of potential reforms focused on revamping our resource management system. The package aims to improve our planning, consenting, and appeal processes to increase certainty and predictability, attract investment, and reduce unnecessary duplication and cost while continuing to protect the environment. As well as proposing a number of changes to consent processes, the reforms consider the appropriate roles of central and local

government, as well as the courts system, and propose more central guidance aimed at promoting consistency and ensuring national objectives are given effect to.

Ian McKelvie: What are the key objectives of the proposed reforms?

Hon AMY ADAMS: The overall objective for the proposed resource management reforms is to ensure the Act is meeting the needs of New Zealand, and address the unreasonable time and cost of many Resource Management Act processes. Those delays have real impacts on Kiwi households and businesses. They can be a barrier to new jobs. They mean houses are more expensive and that communities do not know what they can expect in their neighbourhoods. We want a system where New Zealanders know what they can and cannot do with their land, businesses have the certainty they need to grow and create jobs, and communities do not find themselves having to fight consent by consent to protect their local values.

Ian McKelvie: What will the next steps be in advancing these proposals?

Hon AMY ADAMS: The proposed reforms represent a significant revamp of the Resource Management Act. I am looking forward to the debate that will be had on each of the proposals in the discussion document. The difficulties with Resource Management Act processes are well known to councils, communities, and businesses alike. I will be very interested to hear what alternative suggestions opponents of the proposals come up with. There will be a number of public meetings and hui taking place across the country during March. Public submissions are open now and can be made any time until 2 April. Final policy decisions will be made only once we have had the opportunity to consider all submissions and feedback.

Hon Maryan Street: Is giving the Minister the power to direct councils to change plans, remove consultation requirements by regulation, and prevent people making submissions on matters relating to consents aimed at improving the Resource Management Act, or is it just another power grab by this Government at the expense of local communities?

Hon AMY ADAMS: Well, I welcome that member to the portfolio, and, as she is new to it, she may not be aware that the power to do—

Mr SPEAKER: The Minister will start the answer again and simply answer the question.

Hon AMY ADAMS: I point out to the member that the power to direct plan changes was introduced to the Resource Management Act by the Labour Government in 2005. The power to dictate through regulations what proposals should be subject to consultation is already in the Resource Management Act. I do accept that there is no requirement to have public consultation on proposals such as the need to extend a deck, which is what the majority of consents in this country are.

District Health Boards—Financial Plans

9. Hon ANNETTE KING (Labour—Rongotai) to the Minister of Health: Does he stand by his requirement for District Health Boards to operate within their agreed financial plans; if not, why not?

Hon JO GOODHEW (Associate Minister of Health) on behalf of the Minister of Health: Yes. This is not an unusual position and has been required by Ministers of Health for many years. Times are, however, tight and district health boards will continue to face challenging decisions about how to meet growing health needs.

Hon Annette King: What influence has his non-negotiable requirements for district health boards to improve their financial performance had on the decision of the Nelson Marlborough District Health Board to review surgical and orthopaedic services because “the current scenario of service provision is not sustainable”?

Hon JO GOODHEW: I am advised that the Minister has been to Wairau Hospital and believes it is a great hospital—in fact, he had the privilege of opening it. There is a consultation currently taking place regarding the services that are happening at that hospital. What I would like to fill in

for the member is that over the last 4 years the Nelson Marlborough District Health Board has had a funding increase of some $48 million.

Hon Annette King: Was he aware that the Nelson Marlborough District Health Board intended to review the surgical and orthopaedic services at Wairau Hospital when he signed off its annual plan on 2 July 2012; if so, why did he agree to a plan that failed to tell the people of Blenheim that their surgical and orthopaedic services were up for grabs again; and did he tell Colin King 7 months ago that he would have to front the public on the threat to his health services?

Hon JO GOODHEW: I think the member opposite is jumping the gun. This is a consultation process. I have already pointed out to the member that there has been a $48 million increase in funding to that district health board, and I would remind the member that just 11 years ago to the day—

Hon Annette King: I raise a point of order, Mr Speaker. You recall that I asked the Minister whether he was aware—

Mr SPEAKER: Order! I invite the member to ask her question again.

Hon Annette King: Was he aware that the Nelson Marlborough District Health Board intended to review the surgical and orthopaedic services at Wairau Hospital when he signed off its annual plan on 2 July 2012; if so, why did he agree to a plan that failed to tell the people of Blenheim that their surgical and orthopaedic services were up for grabs again; and did he tell Colin King 7 months ago that he would have to front the public on the threat to their health services?

Mr SPEAKER: The Hon Jo Goodhew can answer any one of those many supplementary questions.

Hon JO GOODHEW: Yes, there are three questions there, two of which I have—well, I certainly alluded to the increase in funding and the consultation plan. I think the member is really desperately wanting me to answer whether the member was aware that this district health board, like many district health boards, will be consulted on services within that district health board. Unfortunately, I am not sure whether that part of the plan for that district health board was something the Minister was aware of at the time or not.

Hon Annette King: Why has a National Party member and a likely challenger for the Kaikōura seat set up a new organisation in Blenheim called Save Our Services—something that has not been necessary since 1998, the last time the National Government tried to reduce services at this hospital—and is holding a public meeting on Tuesday night in an effort to save their valuable services?

Hon JO GOODHEW: I do not believe that the Minister of Health has any responsibility whatsoever for that.

Mr SPEAKER: Supplementary question, Annette King. [Interruption] Order! I am trying to help the member ask her supplementary question, but it requires a bit of assistance.

Hon Annette King: Does he agree with Dr Tom Miller, a doctor from Blenheim, who wrote in the Marlborough Express recently: “Fourteen years ago the hospital was under threat and the loss of secondary services looms again. If general and orthopaedic services are transferred to Nelson it would only be a matter of time before other services are axed and eventually leave Blenheim as a health facility with no other than A and E and other ancillary services.”?

Hon JO GOODHEW: When health services are discussed by communities, these are very anxious times for communities, and therefore I would suggest to the member that she convey to the doctor that he should take part in the consultation process. But I could also add for the member’s interest that when the member herself made erroneous claims about Ashburton Hospital cutting its services—

Hon Annette King: I raise a point of order, Mr Speaker. The member has answered the question, and anything else has nothing to do with this question.

Hon Dr Nick Smith: Can the Minister advise the House—[Interruption]

Mr SPEAKER: Order! The member on his feet has every right to ask a supplementary question.

Hon Dr Nick Smith: Can the Minister advise the House of the six different services that were transferred from Wairau Hospital to Nelson Hospital when a Mrs Annette King was the Minister, and can she recall whether Annette King at the time expressed concerns about that for the people of Marlborough? [Interruption]

Mr SPEAKER: Order! The Minister can answer the question in regard to whether she is aware, but she is certainly not accepting responsibility for any action of a former health Minister.

Hon JO GOODHEW: I have no ministerial responsibility, but I certainly take that member’s word, if it happened. [Interruption]

Mr SPEAKER: I cannot hear a word above the Hon Trevor Mallard, so when he is silent we will hear what—

Hon Annette King: Is the Minister—

Mr SPEAKER: Is this a supplementary question, or a point of order?

Hon Annette King: It is a supplementary question. Is the Minister aware that the former Minister of Health Annette King stopped that hospital being saved and had it rebuilt so that the hospital remained in Blenheim, and that it was under threat by a National Government?

Hon JO GOODHEW: What I am aware of regarding the former Minister of Health Annette King is that she urged, some 11 years ago today, New Zealanders to be realistic on health: “New Zealand is not rich enough to have the kind of health system found in Australia, Canada, Britain, or the United States.” It is clear that even 11 years ago, that member as health Minister had given up on New Zealand’s health system.

Mr SPEAKER: Question No.—[Interruption] Is Mr Hipkins finished? Thank you.

Marine Farming—King Salmon Application

COLIN KING (National—Kaikōura): Thank you—[Interruption]

Mr SPEAKER: Order! Now this member has every right to have his question heard.

10. COLIN KING (National—Kaikōura) to the Minister of Conservation: Has he received the final report from the Board of Inquiry on King Salmon’s application for additional space in the Marlborough Sounds?

Hon Dr NICK SMITH (Minister of Conservation): The final decision, and report, was received today. It provides for four new farms that will enable King Salmon to double its production to 15,000 tonnes, provide an additional 170 jobs, and increase New Zealand exports of fine foods by $60 million per year. The surface area of water space approved is 6 hectares of over 100,000 hectares within the Marlborough Sounds. Today’s decision is a very practical expression of how the member for Kaikōura and this Government support jobs and growth.

Colin King: How many additional marine aquaculture areas were approved between 2000 and 2010, and what steps has the Government taken to get a better balance between conservation and job opportunities in aquaculture?

Hon Dr NICK SMITH: I am advised that not one—

Hon Gerry Brownlee: What?

Hon Dr NICK SMITH: —not one new aquaculture area was approved in the years from 2000 to 2010, because the previous Government imposed a moratorium and then passed legislation that was so cumbersome that not a single farm was able to be approved. This Government changed the national Coastal Policy Statement to specifically recognise aquaculture. The Resource Management Act in its first round of reforms enabled these national applications, and I am delighted to see a further phase of reforms that will enable jobs for New Zealanders.

Question No. 9 to Minister

Hon ANNETTE KING (Labour—Rongotai): I should have sought leave to table a document after the end of my question.

Mr SPEAKER: Let us check what the document is.

Hon ANNETTE KING: The document is the review document from the Nelson Marlborough District Health Board entitled: The Future of General Surgical and Orthopaedic Service Delivery from Wairau Hospital.

Mr SPEAKER: Is it freely available?

Hon ANNETTE KING: No it is not. I do not think many people have got it at all.

Mr SPEAKER: Let us see whether there is any objection to that document being tabled. No? There is no objection. The document may be tabled. Document, by leave, laid on the Table of the House.

District Health Boards—Performance

11. KEVIN HAGUE (Green) to the Minister of Health: Is he satisfied with District Health Boards’ performance against his targets for the health sector?

Hon JO GOODHEW (Associate Minister of Health) on behalf of the Minister of Health: Overall, yes, but we can always do better.

Kevin Hague: Why has he not made unexpected readmissions a national health target when these are internationally recognised as the standard measure of overall hospital service performance?

Hon JO GOODHEW: Under the previous Government there was a plethora of targets. This Government has chosen to have just six targets and those six targets are for the concentration of district health boards and are reported on. So instead of some 42 targets under the previous Government we have narrowed down the targets and we believe that those six targets represent a start. However, the member raises a good point, because there are always other things we can be working on and pathways and integrating care certainly go to the heart of the suggestion that the member has made.

Kevin Hague: I seek leave to table a graph showing readmission rates rising sharply. The graph is actually from the Ministry of Health, but it is sourced here from a document from the Association of—

Mr SPEAKER: I will allow leave to be put. Is there any objection to that graph being tabled? There is not. Document, by leave, laid on the Table of the House.

Kevin Hague: What evidence does he have for his assertion that senior doctors are wrong when they say that part of the reason that unexpected hospital readmission rates are increasing is because New Zealand has the second-highest rate of emigration by medical specialists?

Hon JO GOODHEW: What I am able to answer on behalf of the Minister is that we now have 1,000 more doctors working in our hospitals around New Zealand. I believe that the member is quoting from an Association of Salaried Medical Specialists report that has been released quite recently—timed to coincide with its negotiations over salaries.

Kevin Hague: I seek leave to table data that shows that only 141 more senior medical specialists—

Mr SPEAKER: The source of that document?

Kevin Hague: It is from the Association of Salaried Medical Specialists report that the Associate Minister—

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There appears to be none. Document, by leave, laid on the Table of the House.

Kevin Hague: I seek leave to table research showing New Zealand needs an additional 285 senior medical officers.

Mr SPEAKER: And the source of the document?

Kevin Hague: It is from that same document.

Mr SPEAKER: How many more documents are you seeking to table from the same document?

Kevin Hague: That would be it.

Mr SPEAKER: That would be it? Let us put leave. Leave is sought to table that document. There is objection.

Kevin Hague: Is the Minister not concerned that unexpected hospital readmission rates are increasing, especially for Māori and Pasifika people, because money and resources are instead going to the areas that he has incentivised through his narrow health targets?

Hon JO GOODHEW: I actually refute the member’s assertion, when district health board increases in funding are across the board under this Government and when there has been a priority to put additional funding into health and primary care in terms of children getting free visits after hours and children getting free visits to their doctors. I could actually provide for the member a huge list of additional funding to address health care issues.

Kevin Hague: I seek leave to table the findings of a new study, published in the International Journal of Quality in Health Care, that Māori had 16 percent higher odds of readmission or death compared with European New Zealanders.

Mr SPEAKER: Leave is sought to table that new research document. Is there any objection? There appears to be none. Document, by leave, laid on the Table of the House.

Defence, Minister—Responsibility for Defence Force Morale

12. Hon PHIL GOFF (Labour—Mt Roskill) to the Minister of Defence: Does he take responsibility for Defence Force morale reaching the lowest level since surveys began, attrition rates soaring to over 21 percent and reduced Defence Force capability; if not, why not?

Hon ANNE TOLLEY (Minister of Police) on behalf of the Minister of Defence: No; the member is using historical data. Morale is going up, attrition is going down, and both measures are forecast to continue improving. To deal with the three issues raised by the member, I note that attrition for the New Zealand Defence Force regular force today is less than 17 percent—well below the 19 percent high reached in 2001. Army attrition is less than the level in 2005, and air force attrition is less than half of the 24 percent reached in February 2002. On capability, to quote the Chief of Defence Force’s last report to the Foreign Affairs, Defence and Trade Committee on recent events, “There has been no effect on our ability to generate immediate capability, no reduction in our ability to respond to any contingencies or our ability to sustain operations.” Finally, morale has been on the rise for the last three quarters, and four out of five people do not have an issue with their morale.

Hon Phil Goff: Since the Minister’s answer was no, I seek the leave of the House to table documents authenticating each of the statements in the question as factual, and accepted as such by the Clerk’s Office.

Mr SPEAKER: The source of those documents?

Hon Phil Goff: There are three documents. One is the Office of the Auditor-General financial review, another is a document—let me just find it for you—the Vote Defence Force estimates for Vote Defence—

Mr SPEAKER: At this stage all of these are readily available to members. What is the third document?

Hon Phil Goff: I am making the point—

Mr SPEAKER: The third document?

Hon Phil Goff: —that the Minister denied these reports were factual.

Mr SPEAKER: That is not purpose of tabling a document.

Hon Phil Goff: Well, actually, not all of these—

Mr SPEAKER: The member has further supplementary questions. I have not heard what the third document is.

Hon Phil Goff: I raise a point of order, Mr Speaker. Just to answer your question, I do not believe that the document from the Office of the Auditor-General, the financial review, is a public document. It sets out clearly that the attrition rate—

Mr SPEAKER: That is a fair call. What is the third document?

Hon Phil Goff: The third document—let me find it, once again—is a document that was actually given to the select committee this morning, showing that satisfaction rates had declined from 65 percent in the Defence Force in 2010—

Mr SPEAKER: The easiest way to sort this out is to put the request for leave that those two documents be tabled. Is there any objection to that? Documents, by leave, laid on the Table of the House.

Hon Phil Goff: Is the Chief of Defence Force right in saying that the Government required the Defence Force to implement the civilianisation project, which caused such low morale and soaring attrition rates, and that he as Chief of Defence Force could not avoid it, and does that not place the responsibility for the failure of that project squarely on the Minister’s shoulders and those of her Government?

Hon ANNE TOLLEY: I refute the assertion in that question that the civilianisation has failed; in fact, it has been extremely successful. The point that I made to the member on his original question is that the data that he is using is out of date.

Hon Phil Goff: I seek the leave of the House to table a memo from the Chief of Defence Force—and I can assure the House this is not in the public arena—where the Chief of Defence Force makes it absolutely clear that civilianisation was the responsibility of the Government.

Mr SPEAKER: A member is asking for clarification on the date of that memo.

Hon Phil Goff: 30 January 2013.

Mr SPEAKER: Leave is sought to table the memo. Is there any objection? There is none. Document, by leave, laid on the Table of the House.

Hon Phil Goff: Was it a deliberate policy by the National Government last year to slash Defence Force numbers by over a thousand to the lowest level in at least 11 years, and probably longer, or was it an inadvertent response to the failed and disastrous policies of the Government that led to a quarter of the Defence Force leaving and another 40 percent in the Defence Force survey saying they intended to leave?

Hon ANNE TOLLEY: I say again to that member there has been high attrition in the past. However, the figure today is less than 17 percent—less than 17 percent. That is well below the 19 percent reached in 2001. If we want to talk about cuts, then the biggest cut to the Defence Force was the cut of the air combat part by the former Labour Government.

Hon Phil Goff: Why did the Minister ignore clear warnings from the army in 2011 that the policy of cutting numbers, as I have pointed out, would “significantly impact on their ability to sustain operations”, and warnings from the navy that the cuts would mean they could not put their ships to sea, something that has been borne out this year in practice?

Hon ANNE TOLLEY: Again, I refute the assertions made in that question. The Chief of Defence—

Hon Phil Goff: I raise a point of order, Mr Speaker. Is it in order for the Minister to challenge assertions that I have quoted from the Auditor-General’s report?

Mr SPEAKER: Yes, it is certainly in order for the Minister to do that.

Hon Member: Does it have credibility?

Mr SPEAKER: That is for the House to determine.

Hon ANNE TOLLEY: Yes. I have not even said which assertions I was challenging.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Continuing from the comments you and my colleague Phil Goff have made, my understanding is that, certainly, the convention of the House is that you do not bring the word of the Auditor-General, who is an Officer of Parliament, into doubt, either in debate or in question time, and the Minister did.

Hon Gerry Brownlee: If that were the case, then the member should never have used those comments in questions without making it very clear where they had come from, which he did not.

Mr SPEAKER: I think it would be an odd situation where every comment ever written by the Auditor-General was accepted as gospel by every member of the House.

Hon Phil Goff: How does the Minister justify over 300 staff who were made redundant solely because the Government needed to cut numbers being told that they were being made redundant because they were not up to their job—something refuted by the New Zealand Defence Force staff itself and by the Auditor-General, who said that that was effectively telling good people they were bad? How does she justify that slur on the character of people she dismissed?

Hon ANNE TOLLEY: I think it is fair to say that the New Zealand Defence Force acknowledged over a year ago that the civilianisation project could have been handled better. It acknowledged that publicly. However, the important thing is that attrition is falling, morale is improving, and we have an outstanding Defence Force in New Zealand.

Point of Order—Urgent Questions

Hon TREVOR MALLARD (Labour—Hutt South): I raise a point of order, Mr Speaker. I understand from my colleague the Hon Damien O’Connor that you have declined an urgent question on the Auditor-General’s report on biosecurity. I would like to refer you to three things. One is Speaker’s ruling 182/3, which makes it clear that a member would normally get an answer in 48 hours, but where an adjournment is due special consideration should be given. We are going into a period of adjournment. I would like to refer you to McGee’s Parliamentary Practice, third edition, page 553, where he says in relation to urgent questions: “When an urgent question has been submitted to the Clerk, it is for the Speaker to consider whether it should be allowed to be asked on the ground that it is one which, in the public interest, should be answered immediately. For a member to be able to bypass the normal …” practice for questions “there has to be a need inherent in the question for it to be answered on that day or before the member could” normally get an answer through submitting it through the normal channels, which, of course, would be Tuesday of next week. And I refer you to the overview statement from the Auditor-General, where she says: “Plans for responding to potential incursions from some high-risk organisms are not yet complete. For example, the plan for dealing with a foot and mouth disease outbreak is inadequate.” It seems to us that we have a very real situation now where we have a gap in our system. The Minister might have an explanation as to how that gap, which appears to have been there for a little bit of time, could be closed in the next 12 days. Because of the very serious nature of, for example, foot-and-mouth disease to our agricultural system, it is a question on which, really, the whole country and our economic future hangs on the answer. Therefore, I submit that the question does, in fact, meet the test. Of course, we cannot guarantee that there will be an incursion in the next 12 days, but I would invite you, Mr Speaker, not to rule that there cannot be.

Hon GERRY BROWNLEE (Leader of the House): In no circumstances would you be in a position of having to make such a ruling as sought in the final comment from that member. But what I would say is that I think the whole issue around urgent questions—and particularly in this case—falls to one side and in favour of your decision, because the member himself has said that these conditions have existed for quite some time. Although he quotes Speaker’s ruling 182(3), the fact is that Speakers’ rulings 182(6), 182(5), and 182(4) lend a huge amount of weight to the decision you have made. We are going into what effectively is a 1-week adjournment, not a 2-week adjournment, and the circumstances that the member is trying to suggest are hypothetical. No doubt, during the time we are in adjournment officials will look at the hypothetical position being put

before the House today, and will be able to give a better explanation of why for some time this gap has existed and how they expect to fill it.

Mr SPEAKER: I thank both members for their contribution. An urgent question has been lodged. Urgent questions are allowed to deal with matters that require the absolute, immediate attention of the House. They may be asked where the Speaker considers that it is in the public interest that they be answered immediately. A classic circumstance is where an irrevocable course of events is about to happen before the House sits next. I fully accept that the question lodged by the Hon Damien O’Connor raises a serious matter, but biosecurity protection does not relate to any identified, specific, immediate risk. I have taken guidance from the Clerk. I have had a look at the Standing Orders. I refer the Hon Trevor Mallard to Speaker’s ruling 182(6), which reads: “The guidance used in deciding whether a question is urgent is to ask whether it needs to be answered today, tomorrow, or next week.”

Hon Trevor Mallard: Well, it can’t be any of those.

Mr SPEAKER: Or the week after. In my opinion, the member’s question does not raise an irrevocable turn of events, and that is the test. There is no greater risk now than there was earlier today as a result of that report. I therefore rule that I am not allowing an urgent question.

ENDS

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