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Questions and Answers - September 4


QUESTIONS TO MINISTERS

Skycity, Convention Centre—Harm Minimisation Plan

1. METIRIA TUREI (Co-Leader—Green) to the Minister for Economic Development: When he said, in relation to the SkyCity convention centre deal, “the negotiated significant additional harm-minimisation measures that apply to all gambling machines in that casino will together act to reduce harm” was he basing his claim on the Health Ministry’s gambling harm minimisation team’s advice; if not, why not?

Hon STEVEN JOYCE (Minister for Economic Development): My comment was based on information contained in the regulatory impact statement prepared by the Ministry of Business, Innovation and Employment following consultation with, and summarising advice received from, the following agencies: the Ministry of Justice, the Gambling Commission, the Ministry of Pacific Island Affairs, Te Puni Kōkiri, Treasury, the Ministry of Social Development, the Ministry of Women’s Affairs, the Office of Ethnic Affairs, the Department of Internal Affairs, the New Zealand Police, and the Ministry of Health.

Metiria Turei: Why did the Minister exclude from the regulatory impact statement the advice from the Ministry of Health that it was “doubtful” voluntary pre-commit cards would reduce harm, and that Skycity was already using the technology so it was not, in fact, either new or additional?

Hon STEVEN JOYCE: I think the member misunderstands the role of the regulatory impact statement. The regulatory impact statement is prepared by officials, and it is a summary of all the different official advice that comes from different agencies.

Metiria Turei: Why, then, did the Minister sign off on the regulatory impact statement that excluded the advice from the Ministry of Health that doubling of host responsibility staff at the Skycity Casino was likely to have at best a minimal effect?

Hon STEVEN JOYCE: Again I think the member is misunderstanding the role of the regulatory impact statement, which is to collect together the information supplied by different departments. It may come as a surprise to the member that I have not read the advice from every single one of those agencies. The regulatory impact statement—

Hon Trevor Mallard: Why not? You’re in charge.

Hon STEVEN JOYCE: Do not be a clown, Trevor. The regulatory impact statement is put together as a summary of the different agencies.

Hon Trevor Mallard: Is it not his practice to read the advice from all officials on bills?

Hon STEVEN JOYCE: It is not my practice to read advice to individual Ministers from every single agency for a paper that I am taking to Cabinet. I very much doubt that it is any Minister’s practice, and it was certainly not the practice of previous Ministers in the previous Government.

Metiria Turei: When the Minister told this House that Cabinet had considered “all of the risks and benefits of the social and economic impacts” of this deal, was he mistaken, or was he deliberately misleading the House?

Hon STEVEN JOYCE: Well, neither. Cabinet, as always in these situations, receives a Cabinet paper and in appropriate cases, including this one, a regulatory impact assessment, which different agencies contribute to and which is summarised by the lead agency, is then taken to Cabinet. That is what occurred in this case, as occurs in a whole range of other cases. It has to be said that the regulatory impact statements have been a heck of a lot better prepared under this Government than under previous Governments.

Metiria Turei: What other advice did the Minister choose to leave out of the regulatory impact statement, and did part of it include the advice on the intended reduction in the Television New Zealand (TVNZ) dividend as a result of the sale of land to Skycity under the convention centre deal?

Hon STEVEN JOYCE: Again, for the member’s benefit, if she had listened to a previous answer, she would notice that the supposition contained in the first part of that supplementary question is incorrect. In relation to the second part of the supplementary question, she is also incorrect because, in actual fact, in terms of the forgiveness of dividends, which was flagged, potentially, some time ago, that is for the opportunity for TVNZ to renovate its building next door, which I think is a fantastic outcome. It has sold some land to Skycity as part of the convention centre arrangements and it is getting an opportunity to make a much-needed renovation to its facilities.

Metiria Turei: Were Cabinet and his caucus colleagues made aware of the likely significant extra cost of this need to induce TVNZ by way of a reduced dividend expectation to move out of part of its central Auckland premises to make way for the convention centre deal before they voted for the bill?

Hon STEVEN JOYCE: I completely reject the assertion that the member makes. The reality, as I have made quite clear, is that the convention centre could proceed with this extra piece of land or without, and it is quite obvious that it could do so. TVNZ was given the opportunity to sell the land. It went to its shareholding Ministers and said: “Well, look, we would like to renovate our building. Would you support us in doing so?”. As has been said publicly for some time now, it was indicated that shareholding Ministers would support that, and so out of this we will get a fantastic convention centre for New Zealand based in the middle of Auckland City, generating jobs, generating tourism opportunities, and also TVNZ, next door, will get an upgrade of its building, including earthquake strengthening and future-proofing. So it is all working out as a pretty big win-win.

Metiria Turei: Did the Minister advise the Minister of Broadcasting, Craig Foss, last year about the possibility of a reduced dividend from TVNZ due to the Skycity deal, given that Mr Foss demanded at least 9 percent in dividends from TVNZ in December?

Hon STEVEN JOYCE: I think the matter was raised by TVNZ with its shareholding Ministers a reasonably short time ago. There was a letter that went back, which I referred to publicly I think, from memory, a couple of months ago, and it was probably shortly before that. So I think that relating it to last year is probably reasonably irrelevant.

Metiria Turei: Why did the regulatory impact statement cite the 2011 New Zealand Institute of Economic Research report and table 1 as showing that the convention centre would employ 500 full-time equivalents, when, in fact, no such figures are in either the tables or the report from the New Zealand Institute of Economic Research 2011 report?

Hon STEVEN JOYCE: I would have to go back and check the comments the member makes in relation to the regulatory impact statement, but it is important for her to realise that the figures referred to in the New Zealand Institute of Economic Research report are a different set of figures and do not bear any direct relationship to the figures around construction and operation of the convention centre. They are only an input into the New Zealand Institute of Economic Research

report. The New Zealand Institute of Economic Research report looks at wider economic analysis and does not refer to the number of jobs either in the construction or, in fact, in the operation of the centre.

Metiria Turei: What discussion has he or his officials had with Skycity about its participation or non-participation in the select committee process on the New Zealand International Convention Centre Bill?

Hon STEVEN JOYCE: I had one conversation with the chair of Skycity on a number of matters, including some not related to Skycity. He asked whether it was something that Skycity should do, and I said to him that it was open to the company to decide what to do. I did not think it was particularly necessary, but it was very much Skycity’s call to make and I think it made its own call.

Metiria Turei: Can the Minister confirm that when his colleagues, such as Peseta Sam Lotu- Iiga, voted in support of the Skycity deal, they did so on the basis of incomplete and inaccurate financial analysis, inaccurate advice on the actual cost to the taxpayer from this deal, incorrect projections of job numbers, and a patently untrue account of the impact of harm minimisation measures?

Hon STEVEN JOYCE: No, the member is wrong on all three of those counts. This particular convention centre, which all of the National Party caucus campaigned on at the last election—and I appreciate that this is the second time in 2 days that the Green Party has advised us not to follow the policies on which we were elected—will create 1,000 jobs in construction, will create 500 jobs in ongoing operation, and will enhance the New Zealand convention industry. It is a good deal for New Zealand, and this Government believes strongly in it.

Economy—Minister’s Statements

2. Hon DAVID PARKER (Labour) to the Minister of Finance: Does he stand by his statement that “our companies are becoming more competitive”?

Hon BILL ENGLISH (Minister of Finance): Yes. I am pleased the member asked that question, because this morning the Global Competitiveness Index for 2013-2014 was released. This shows that New Zealand has risen five places in the last year to a ranking of 18. This is the first time New Zealand has placed ahead of Australia, which has slipped back to 21st place. New Zealand was ranked first in the world in the following measures: procedures to start a business, days to start a business, investor protection, and inflation. We are ranked second in the world for soundness of its banks and for trade barriers. We also ranked highly for health, education, quality of institutions, goods, and labour market efficiency. Of course, there were other areas where New Zealand was ranked lower, and we will, of course, move to improve those rankings.

Hon David Parker: How does intervening to override the determination of the independent Commerce Commission for the benefit of one company, Chorus, demonstrate his Government’s commitment to competitive and fair markets, given that it will increase both fibre and copper broadband prices and reduce competition?

Hon BILL ENGLISH: I disagree with most of what the member said. As the member will know, the issues around Chorus and fibre pricing are to do with the Government’s project to roll out ultra-fast broadband, a project that was fully supported, as I understand it, by the Opposition. Of course it represents a Government intervention in the market. That is the point of it, because we believe that the market would not have delivered ultra-fast broadband to most New Zealand households probably for another decade.

Hon David Parker: Does he support the effort of the Minister for Communications and Information Technology to set the price for copper-based broadband at higher levels than recommended by the Commerce Commission?

Hon BILL ENGLISH: I do support the measures that the Minister for Communications and Information Technology is taking. As the member will know, at some stage the country will have to

pay the price of a new ultra-fast broadband infrastructure. This Government decided that that time is now, not in 10 years’ time.

Maggie Barry: What alternative policies has he seen that would affect the competitiveness of New Zealand businesses?

Hon BILL ENGLISH: The fact that New Zealand is rising in the ratings of competitiveness but still has some way to go to get from No. 18 to No. 1 means we should look out very carefully for policies that are going to hold that progress back, because a more competitive economy delivers more jobs and, in particular, higher incomes. I have seen proposals for a capital gains tax on every business and farm, increasing emissions trading scheme taxes, minimum wage increases up to $18 an hour, the cancellation of the 90-day trial period, winding back of ACC changes, extra transport charges, and proposals to borrow a lot more money. These are all coming from the Labour leadership campaign.

Hon David Parker: Does he believe Chorus and its competitors are being treated in an evenhanded manner by this Government, given that Chorus already has a 14 year, $1 billion interest-free loan subsidised by the taxpayer, and that other companies that tendered for the ultra-fast broadband contract could not get a base price for copper that it is now giving to Chorus?

Hon BILL ENGLISH: The Government’s programme to roll out ultra-fast broadband roughly 10 years ahead of when it would have occurred has been completely transparent. We spent a good couple of years discussing with market participants the process that we would follow. We went through a fully transparent, completely commercial process, the result of which was that Chorus and others won the contract to roll out ultra-fast broadband. The Government makes no apology for intervening in that market to bring forward the roll-out of that network. Until today, I thought the Labour Opposition supported that. It is now clear that along with its policy of wanting to close the smelter, it wants to stop the roll-out of ultra-fast broadband.

Rt Hon Winston Peters: Could the Minister tell us how many subcontractors are about to go belly up because Transfield Services, which is associated with the much-vaunted ultra-fast broadband programme about which he speaks, is not paying out and is months behind in its payments?

Hon BILL ENGLISH: No.

Hon David Parker: Why can the Minister not understand that with the Rio Tinto subsidy, the revisions to the Chorus subsidy, and the casino convention centre deal, the Government is saying to business and investors that it is easier to get ahead in this economy by grifting corporate welfare from the Government via private phone calls and dinner with the Prime Minister than it is to succeed as a smaller business using innovation and creativity to compete in the market place?

Hon BILL ENGLISH: The member is talking nonsense. If there was no ultra-fast broadband roll-out, if the smelter had closed, and if there was no convention centre, those members would be saying: “Why aren’t you a smart, interventionist Government like we would be?”. No one believes Labour with that kind of contradiction. He is talking rubbish.

Economic Programme—Progress

3. PAUL GOLDSMITH (National) to the Minister of Finance: What progress is the Government making in building a stronger economy that will support more jobs and higher incomes, following the domestic recession which started in early 2008 well before the global financial crisis?

Hon BILL ENGLISH (Minister of Finance): The Government is making good progress in rebuilding the economy after the recession began in 2008, before the global financial crisis. Back then unemployment started to rise and the Government faced a decade of deficits as a result of the stewardship of the last Government. This week Treasury published its monthly Economic Indicators for August, which confirmed a number of positive trends in the economy. Households and businesses are becoming increasingly optimistic and consumers, in particular, are beginning to

spend more as their confidence lifts. Of course, today we had the ratings from the World Competitiveness Index that indicate that New Zealand is beginning the long crawl back from the damage done by the previous Government, which reduced our competitiveness.

Paul Goldsmith: What did Treasury’s latest monthly economic indicators say about the outlook for the labour market?

Hon BILL ENGLISH: Treasury has noted that there is a modest strengthening of the labour market in the June quarter, and noted that the household labour force survey confirmed that the number of people employed rose by 8,000. This was a particularly positive outcome, following a large increase in the number of people employed in the March quarter. That means that over the past 6 months an extra 46,000 New Zealanders have been employed. Treasury notes that the quarterly employment survey showed a similar strengthening in the number of filled jobs. Of course, it has not grown as fast as we would like, but 46,000 jobs in 6 months is a pretty solid effort and we hope that the economy will build on that in the next 6 months.

Paul Goldsmith: In the light of the improving labour market, what do the latest indicators say about wage growth?

Hon BILL ENGLISH: Total weekly gross earnings grew by 1.2 percent in the June quarter, according to the quarterly employment survey. This took annual growth and weekly gross earnings to 3.8 percent. This is relatively subdued nominal wage growth. However, with annual inflation at only 0.7 percent, real annual wage growth is similar to the rate in the mid-2000s—that is, real incomes are about 3.1 percent higher over the year. That is above the level of inflation. This wage growth and low inflation will continue to boost Kiwi family incomes. Of course, we would like to see more of it, and the competitiveness index results today indicate there is the possibility—the probability—of better increases in incomes in the future because we are becoming more competitive.

Paul Goldsmith: What progress is being made in rebuilding Christchurch, after the devastating earthquakes, and what contribution is this making to economic growth?

Hon BILL ENGLISH: Today marks the third anniversary of the first large earthquake. We want to acknowledge the courage and resilience shown by the people of Christchurch and communities across Canterbury. They are making very good progress in what are still difficult circumstances in the challenging task of rebuilding their lives and their communities. The Government continues to back the rebuild and boosted its commitment in the May Budget, from $13 billion to $15 billion. We are also working hard to progress anchor projects in the Christchurch central business district, with the first section of the Avon River precinct opened recently. Of course, there are still issues that are frustrating both homeowners and commercial building owners, related to the complexity of insurance arrangements in Christchurch. The extra activity is reflecting in economic statistics: the Canterbury economy grew 6.6 percent in the last 12 months—well ahead of other regions.

Housing, Affordable—Commentary

4. PHIL TWYFORD (Labour—Te Atatū) to the Minister of Housing: Does he agree with the New Zealand Herald that “the Government’s latest response to the problem of housing affordability is as ill-directed as it is insipid”?

Hon Dr NICK SMITH (Minister of Housing): No—although that editorial on our KiwiSaver and Welcome Home Loan changes was entitled “... no silver bullet” on housing—but I do agree that the changes to these schemes are a small part of what is required to address housing supply and affordability. That is why the Government has taken action, including three major bills before this Parliament. In respect of the KiwiSaver changes, more help was going to Southland and helping people there to get a home deposit than to Auckland, despite the fact that Auckland has got 15 times the population and three times the average house price. Our change in the price caps and also in the income caps will reverse that. In respect of the Welcome Home Loan changes, they will increase threefold the number of families that are able to get a first home.

Phil Twyford: Does he think Kiwis will find it easier or harder to get a first home since the Government failed to secure an exemption for first-home buyers from loan-to-value ratio lending limits, and since the ANZ, the ASB, the BNZ, and Westpac have all put up their interest rates and their charges as a result of loan-to-value ratio lending limits?

Hon Dr NICK SMITH: I do agree with the member that the level of interest rates is one of the most important factors that affect housing affordability. That is why I am so proud to be part of a Government that has the lowest interest rates in 50 years. I note that in the entire time I have been in Parliament interest rates have gone up under Labour Governments and come down under National Governments. In respect of the very specific question—whether the Reserve Bank charges have resulted in an exemption—indeed they have. The Reserve Bank has said that Welcome Home Loans will be exempted from the loan-to-value ratio limits, and that is one of the reasons that the Government has trebled the number of Welcome Home Loans.

Phil Twyford: Does he agree with the Minister of Finance, who told the House that the lack of an exemption for first-home buyers was not the fault of the Government but was, in fact, the responsibility of the Reserve Bank; if so, is he calling the Reserve Bank Governor a liar, given that the governor said that the use of these tools by the Reserve Bank was recently agreed in a memorandum of understanding with the Minister of Finance? And if so, does he think that the Minister of Finance is calling himself a liar when he said that the memorandum signed by the Government provides four new measures for the Reserve Bank, including loan-to-value ratios?

Hon Dr NICK SMITH: The member shows an ignorance of the Reserve Bank of New Zealand Act—an Act that was passed by the previous Government—that is, the decisions of the Reserve Bank are independent of the Government, and we respect that independence. In respect of what the Reserve Bank has said, I would draw his attention to the fact that the single greatest factor that the Reserve Bank said we needed to move on, in respect of housing, was supply, and particularly land supply. That is what the Government is doing. What the member and the members opposite are doing is actually trying to stop the Government from freeing up land supply and making houses more affordable.

Phil Twyford: Is he concerned that low to middle income first-home buyers are going to be disadvantaged by loan-to-value lending limits, given the reported comments of mortgage broker Sonya Reid, who says that banks will cherry-pick clients, with those on high incomes and professional occupations likely to be preferred?

Hon Dr NICK SMITH: As occurs on so many issues, we get contradictions between different Labour members. The first time—

Hon Trevor Mallard: I raise a point of order, Mr Speaker.

Hon Dr NICK SMITH: —I heard it proposed that there should be loan-to-value ratio limits was—

Mr SPEAKER: Order! I have a point of order from the Hon Trevor Mallard.

Hon Trevor Mallard: Yesterday we traversed on some pretty regular occasions what responsibility that Minister has for Labour Party policy, and we agreed there was none. Describing it is not his responsibility.

Mr SPEAKER: I agree with the point of order that has been raised. I am going to ask Phil Twyford to ask the question again, and then ask the Minister to answer it.

Phil Twyford: Thank you. Is he concerned that low to middle income first-home buyers are going to be disadvantaged by loan-to-value lending limits, given the reported comments of mortgage broker Sonya Reid, who says that banks will cherry-pick clients, with those on high incomes and professional occupations likely to be preferred?

Hon Dr NICK SMITH: The most important thing for low and middle income buyers wanting to get into their first home is actually the level of interest rates. The level of interest rates was such that when Labour left office, the average Kiwi household was paying $250 a week more in their interest payments. The steps that have been taken by the Reserve Bank and the steps that have been taken

by this Government are to keep interest rates low for longer. That is the best way in which we can help both first home and other homeowners.

Phil Twyford: What action will the Government take to help first-home buyers who have already paid a 10 percent deposit, but will not be able to complete their purchase before the 6-month grace period for loan-to-value ratios ends, meaning that they will have to stump up an extra $50,000 or more within the next 6 months?

Hon Dr NICK SMITH: The member is incorrect in two respects. The first is that the Reserve Bank has actually put a limit on, and not prohibited, the number of low-value deposits. The banks have said that they are going to give priority to first-home buyers. The second point, in asking what the Government has done: the Government has trebled—trebled—the number of Welcome Home Loans that are exempted from those Reserve Bank limits. That means thousands more—thousands more—first-home buyers will have an opportunity to get into their first home.

Fees—Foundation Courses

5. COLIN KING (National—Kaikōura) to the Minister for Tertiary Education, Skills and

Employment: What recent announcements has the Government made about foundation education?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): This morning I announced a number of changes to foundation education—firstly, that the very successful Youth Guarantee scheme will be expanded to 18 and 19-year-olds next year. It is currently available only to 16 and 17-year-olds, with limited exceptions. The Youth Guarantee has been very successful in encouraging 16 and 17-year-olds to stay engaged in education and to complete level 1 and 2 qualifications instead of dropping out and going on to a benefit. However, there are older teenagers aged 18 and 19 who have already dropped out of school or who otherwise need a chance to get that vital first level 2 qualification. With Youth Guarantee, trades academies, and the new vocational pathways, the Government is confident that every single teenage New Zealander has a fees-free path to a level 2 qualification, giving them access to training and skills for employment.

Colin King: What announcements has he made regarding training for beneficiaries?

Hon STEVEN JOYCE: This morning, alongside the Minister for Social Development, we announced that from next year the Government will be winding down the Foundation-Focused Training Opportunities programme and replacing it with an expanded range of effective education and training programmes to help beneficiaries and young people get into work. From next year there will be considerably more places at English for speakers of other languages courses, more places at intensive literacy and numeracy courses, and more money spent on short courses that assist in getting beneficiaries into work, and all New Zealanders below the age of 25 will be able to access fees-free level 1 and 2 courses.

Colin King: What announcements has he made about foundation education for 20 to 24-yearolds?

Hon STEVEN JOYCE: This one is also very significant. Starting from next year, all level 1 and 2 foundation education courses will be fees-free for 20 to 24-year-olds. Level 1 and 2 courses deliver core foundational skills required for success in life. They provide students with the skills required for higher-level study, training, and employment. Most students gain these skills and qualifications in a school setting, but too many New Zealanders do not have these skills at age 20 and older. The changes I have announced today mean that anybody under the age of 25 will be able to obtain a level 2 qualification fees-free, whether that is at a secondary school, through a Youth Guarantee programme, or at a tertiary provider such as a private training establishment. This is a very significant commitment to New Zealand’s future.

Dr David Clark: What does the Minister say to the most high-risk unemployed people in Dunedin about today’s announcement of the closure of the Foundation-Focused Training Opportunities programme and the withdrawal of around $1 million from trusted Dunedin secondchance education providers such as the Kōkiri training centre, the Dunedin Training Centre, the

Salvation Army, Approach Community Learning, and Tokomairiro Training, and will the Minister guarantee that all of the funding withdrawn by the Tertiary Education Commission from Otago and Southland will be reallocated through the Otago and Southland Work and Income offices?

Hon STEVEN JOYCE: The allocations will be based on demand for positions, and as I said to the member at the outset through the earlier questions—if he had listened—actually, they will be replaced by a range of other places. For example—

Dr David Clark: It’s a very straight question.

Hon STEVEN JOYCE: —that is right, and I am giving you a very straight answer, parrot— 2,000 to 4,000 additional short-duration training skills courses for beneficiaries, 1,420 additional English for speakers of other languages places, 1,350 additional intensive literacy and numeracy courses, additional fees-free foundation education level 1 and 2 courses for 20 to 24-year-olds, and the extension of Youth Guarantee for 18 and 19-year-olds. The Tertiary Education Commission and the Ministry of Social Development will be allocating those in individual regions according to need and demand.

Dr David Clark: I raise a point of order, Mr Speaker. That was a very straight question as to whether he would guarantee that all of the funding—

Mr SPEAKER: Order! [Interruption] Order! The member will resume his seat. It was— [Interruption] I might make a comment on the point of order that he has raised. I think that on this occasion it was not a straightforward question, because there were at least two questions in the question that was asked. The Minister addressed that question satisfactorily, and the Minister has the prerogative of answering either of the supplementary questions if a member asks two in one question. Does the member have a further supplementary question?

Dr David Clark: Given that Otago unemployment is at its highest level in 20 years, can he guarantee that some of the extra allocation of Youth Guarantee places will be funded in the Otago region?

Hon STEVEN JOYCE: A couple of things there—firstly, it is important to note that although, yes, Otago’s unemployment is high, it is lower than the national average. It is lower than Auckland’s, it is lower than Wellington’s, and it is lower than Waikato’s, and therefore the number of places made available will depend on demand in different regions. It is important that we do that so that we do not artificially create a certain number of places in each region and have young people in one region missing out while there are empty places in another region.

Dr David Clark: I raise a point of order, Mr Speaker. I think you will agree, Mr Speaker, that that was a very straight question as to whether some of the extra allocation of Youth Guarantee places will be funded in the Otago region.

Mr SPEAKER: And the Minister responded by saying that the money will be allocated by demand, not by region.

State-owned Assets, Sales—Citizens Initiated Referendum

6. HONE HARAWIRA (Leader—Mana) to the Prime Minister: Does he accept that his reported comments about the asset sales referendum being a $9 million waste of money are likely to be considered rude, disrespectful and insulting by the hundreds of thousands of New Zealanders who have signed the petition for just such a referendum; if not, why not?

Hon TONY RYALL (Minister for State Owned Enterprises) on behalf of the Prime

Minister: No, because the Government’s share offer programme was extensively debated and discussed throughout 2011 and during the election campaign. The Opposition at the time described the election as a referendum on asset sales. In fact, one party put out a press release just before the general election titled “A vote for National is a Vote for Asset Sales”, and that party was the Mana party.

Hone Harawira: Does the fact that he does not want to spend $9 million to ask New Zealanders whether they support asset sales, even though hundreds of thousands of New Zealanders have

requested it, but he is happy to spend $36 million on the America’s Cup, $30 million on Rio Tinto, and $1.6 billion to bail out a failed finance company, and do backdoor deals with casinos to let them steal even more money from the poor, paint an accurate picture of this Government’s priority of corporate interests over people’s needs; if not, why not?

Hon TONY RYALL: I reject most of what that member said because this Government’s priorities are jobs, growth, and opportunities for New Zealand families. The mixed-ownership model programme is part of our wider economic plan to control debt and provide funding and money to invest in important social infrastructure like schools, roads, and hospitals.

Hone Harawira: Does the fact that he does not want to spend $9 million to ask New Zealanders whether they support asset sales, and does not want to consider any of the proven measures to raise family incomes and well-being, such as a financial transaction tax, a capital gains tax, raising the minimum wage, introducing a living wage, having a Government job creation programme, or investing in feeding our kids in schools, confirm the fact that his Government has no interest in raising the living standards of ordinary New Zealanders; if not, why not?

Hon TONY RYALL: Of course, we would reject most of the claims that that member has made in that question. The reason is that in January 2011 the Government indicated that it would embark on a mixed-ownership model programme if it were re-elected. We then detailed that in the Budget in May 2011. Then we had a general election in 2011 at the end of the year, where the Government received a resounding vote of support from the New Zealand public. A party that was promoting the plan that that member just enunciated got close to 1 percent of votes, and that party was his own.

Oil, Gas, and Minerals Exploration—Deep-sea Drilling

7. Hon MARYAN STREET (Labour) to the Minister for the Environment: Has she had any advice that exploratory drilling at deep sea levels may pose significant environmental or health and safety risks, and if so, why is she proposing that exploratory deep sea drilling, like the Deepwater Horizon Well, is non-notified under the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012 and therefore protected from public submissions?

Hon AMY ADAMS (Minister for the Environment): I have received advice that if a largescale oil spill were to occur, it may well have significant environmental risks, but I have also had advice saying that the likelihood of such a spill from an exploratory drill was very low. I also have seen advice from the National Institute of Water and Atmospheric Research Ltd (NIWA) that says there were no activities associated with oil and gas extraction that were considered to represent an extreme environmental risk. To the contrary, exploratory drilling involves the drilling of a very small hole in the seabed, and when operating as intended it has a low environmental impact. At this exploratory stage of the process it is the environmental impact and safeguards that the regulator needs to be satisfied with, and I am confident that the Environmental Protection Authority, retaining full discretion to accept or to decline the application, and impose conditions as needed on a case by case basis, achieves this.

Hon Maryan Street: Why does she think that environmental experts and local groups should not be permitted to submit on the potential environmental and economic impacts for the surrounding area, given the significant risks attaching to exploratory drilling?

Hon AMY ADAMS: I have every confidence that the Environmental Protection Authority has access to all of the expertise and advice that it wishes to access. It will have all of the information available to it, and it will be able to make the decision based on the facts and the information in front of it, which is appropriate and is the way the vast majority of regulatory decisions in this country are made.

Hon Phil Heatley: What reports has the Minister seen on the Government’s offshore oil and gas exploration proposals?

Hon AMY ADAMS: I have seen reports noting that offshore oil and gas drilling is an essential feature of domestic and export growth, and also that decisions on these matters should be made in a

rational fashion not based on knee-jerk emotionalism. The member across the House who was asking questions previously, Maryan Street, may want to check which faction she is backing because these quotes came from the Hon Shane Jones.

Hon Maryan Street: Talking about deep-sea drilling, does she think that New Zealand is sufficiently prepared to deal with the risk of a deep-sea exploratory well blow-out, given that Maritime New Zealand considers itself prepared to deal with a spill of only up to 3,500 tonnes, when the Rena vessel alone was carrying 1,700 tonnes and the Gulf of Mexico exploratory well spilled 600,000 tonnes?

Hon AMY ADAMS: Yes I am satisfied that New Zealand is very well positioned, given particularly the fact that the Health and Safety in Employment (Petroleum Exploration and Extraction) Regulations have only just recently been updated to international best practice, and that the level of insurance required to be carried by operators has been increased under this Government. I can certainly be confident that New Zealand is far better positioned now that we have a regime for environmental protection in the exclusive economic zone, which not only did the Labour-Green Government not bother with in 9 years, but when the National Government introduced it, they tried to block it.

Hon Maryan Street: Why does she expect the public to have full confidence in her Environmental Protection Authority appointees exercising their full discretion in granting nonnotified permits, given she attempted to appoint someone to the authority who was going to carry on consulting work for the oil and gas industry during his time on the board?

Hon AMY ADAMS: I reject that assertion. She is simply incorrect.

Brendan Horan: Given that nearly 2 years after the wreck of the Rena on a rock there is still oil and debris floating ashore, what confidence can the Government give to the people of New Zealand that an oil spill of, say, one-hundredth of the size of the Deepwater Horizon spill can be contained when the Government’s current rapid oil response unit consists of three aluminium dinghies just 8 metres long, complete with depth sounder, radio, compass, GPS, and two outboard motors?

Hon AMY ADAMS: First of all, the member may not be aware that the Rena incident is not a matter that would have been covered under the exclusive economic zone legislation. He may not be aware of that, but that is certainly the case. Secondly, I would refer that member to the answer I have just given around New Zealand’s preparedness. Thirdly, I would point out to the member that actually the environmental monitoring reports around the recovery from the Rena suggest that the environment has recovered extremely well and exceeded expectations.

Courts—Restorative Justice Services

8. CLAUDETTE HAUITI (National) to the Minister of Justice: What changes are being made to pre-sentence restorative justice services?

Hon JUDITH COLLINS (Minister of Justice): As a result of this Government’s further investment, I am delighted to have announced today that we are expanding our pre-sentence restorative justice conferences. In 2014-15 an additional 2,400 conferences will be provided, bringing the total number of pre-sentence restorative justice conferences to 3,600 across the country. These conferences will now be available in every court across New Zealand. To ensure providers are equipped, the Ministry of Justice has completed an open tender process and has confirmed new contracts with 17 providers and a specialist sexual offending provider. Investing in pre-sentence restorative justice helps to reduce reoffending and gives victims a stronger voice in the justice system.

Claudette Hauiti: How do restorative justice conferences contribute to positive outcomes?

Hon JUDITH COLLINS: Restorative justice gives victims the ability to confront their offenders and to tell them directly the impact their offending has had. It can be life changing for both the victim, who is able to express their feelings to the person who caused their grief, and the offender, who is directly confronted with the results of their actions. It is a voluntary process, and

both parties have to agree to participate. It is very carefully supported by trained providers contracted by the Ministry of Justice. Research shows that 74 percent of victims who engaged in a conference felt safer and 80 percent would recommend the process to others. Research also shows a 20 percent reduction in reoffending rates when compared with offenders who have not participated in a restorative justice conference.

Te Ururoa Flavell: Tēnā koe, Mr Speaker. Kia ora tātou katoa. What consideration, if any, has she given to initiate a review of racial discrimination in the criminal justice system, and is there any possibility of a review being considered in the near future?

Hon JUDITH COLLINS: That question is well wide of the primary question, but I can give an attempt at it. This is an issue that I take very seriously. Of course, we have not only our obligations to all New Zealanders but also our international obligations. This is something that I believe we are taking extremely seriously.

Māori Television—Confidence in Board

9. CLARE CURRAN (Labour—Dunedin South) to the Minister of Finance: Does he have confidence in the board of Māori Television?

Hon BILL ENGLISH (Minister of Finance): Yes.

Clare Curran: Does he believe the chair of the Māori Television board has properly managed any potential conflicts of interest in the process of hiring a new chief executive?

Hon BILL ENGLISH: I would expect, consistent with the behaviour of all Crown boards, that members of that board have followed appropriate processes for dealing with conflicts of interest.

Clare Curran: Is he aware that the chair and board were offered a briefing by the Chief Executive Officer of Television New Zealand (TVNZ), Kevin Kenrick, the former employer of Paora Maxwell, in regard to Mr Maxwell’s employment history at TVNZ, and does he find it strange that that offer was not accepted, given Mr Maxwell exited TVNZ under a confidential agreement?

Hon BILL ENGLISH: I would expect that that board, having been appointed to run the Māori Television Service, will conduct whatever process it is going through appropriately.

Clare Curran: Would it be satisfactory, as shareholding Minister, having a chief executive officer of Māori Television who left TVNZ under a cloud of financial and staff mismanagement?

Hon BILL ENGLISH: It is the responsibility of the board of Māori Television to decide on who its chief executive might be. That is what it is appointed to do, and it would not be my intention, consistent with the behaviour of all shareholding Ministers under any Government, to tell it who to recruit for chief executive.

New Zealand Security Intelligence Service—Legality of Activities

10. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he still stand by his statement yesterday when asked whether he was satisfied that the New Zealand Security Intelligence Service has always operated lawfully under his leadership; “as far as I am aware, yes”?

Hon BILL ENGLISH (Acting Prime Minister): Yes.

Rt Hon Winston Peters: How on earth can he say that the SIS has acted lawfully when it breached section 131 of the Search and Surveillance Act when they failed to produce evidence of their identity and refused to produce a copy of the search warrant when they illegally raided former Fijian Cabinet Minister Rajesh Singh’s home in Auckland?

Hon BILL ENGLISH: If the member or anyone believes that there was anything unlawful about the conduct of the SIS, they have two avenues of complaint: to the Inspector-General of Intelligence and Security or to the police. I would suggest that if the member believes there was unlawfulness, he takes the matters up with the people with the capacity to deal with them.

Rt Hon Winston Peters: Again, how on earth can the Acting Prime Minister say that, when the Minister of Internal Affairs dropped case reference CIV-2013—that is, this year—485-240 before the High Court at Wellington 1 week before the hearing date, if it was not, firstly, that illegal action by the SIS was about to be exposed, and, secondly, that former Cabinet Minister Rajesh Singh, a New Zealand permanent resident, and associate Fiji Democracy and Freedom Movement people are some of the 80 New Zealanders spied on illegally by the Government Communications Security Bureau?

Hon BILL ENGLISH: There seemed to be several questions there, but I can assure the member that I am advised that the SIS is not involved in a court case related to that matter.

Rt Hon Winston Peters: Can I ask the Prime Minister whether an arrangement was made between the Fijian military regime and the New Zealand Government to spy on former Fijian Cabinet Minister Rajesh Singh and other members of the Fiji Democracy and Freedom Movement living legally in New Zealand?

Hon BILL ENGLISH: It would be very surprising if the New Zealand Government made any arrangement of any nature with the Fijian Government.

Rt Hon Winston Peters: Well, if that is remotely true, why, then, did the commander of the Fijian land forces, Colonel Mosese Tikoitoga, text Mr Singh saying he was about to be raided by the SIS at the exact time the raid was happening?

Hon BILL ENGLISH: I have no idea.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. This Minister has had 24 hours to answer questions on this subject. The point is that the same person in the Marshall Islands got up and said: “Put up or shut up.” Now I am asking questions, and I am not getting any answers at all, on what is probably demonstrably illegal activity, and the Prime Minister knows it.

Mr SPEAKER: Order! The member is welcome to go back and look at his question. His question was whether it is true that a particular gentleman in Fiji texted somebody in New Zealand, and the Minister acting on behalf of the Prime Minister said that he had no idea.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker.

Mr SPEAKER: Can I just understand clearly that this is a fresh point of order, not in any way—

Rt Hon Winston Peters: Yes, it is a fresh point of order, because it goes to the ambit of all the questions that were asked by way of supplementary questions today. The Prime Minister, or whoever is standing in for him, did not seem to know the answer to any of them when, in fact, the court case is on record. The internal affairs action, which is associated with the SIS, is on record. The texts are available because the—

Mr SPEAKER: Order! The member—[Interruption] Order! The member will resume his seat. He is now relitigating not only rulings that I have just given but rulings that I gave yesterday.

Rt Hon Winston Peters: Stick around for the debate, then.

Mr SPEAKER: The member is welcome, at this stage, to stick around for the debate.

Wanganui Collegiate School—Fees and Contributions

11. CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education: Will Wanganui Collegiate be required to supervise a child if the child’s parents are unable to pay the $5,200 “parent contribution” for meals, house activities and supervision?

Hon HEKIA PARATA (Minister of Education): Yes. The board of trustees must provide a safe environment for students, which includes supervision. If students are boarders, then the meals, house activities, and supervision are part of their boarding fees, and, as the member was advised in questions in the House last week, the only compulsory fee that parents must pay is the attendance due.

Chris Hipkins: How many parents elected not to pay the supposedly voluntary parental contributions in the last school year?

Hon HEKIA PARATA: I do not have that level of detail, but I am happy to get it for the member.

Chris Hipkins: When she signed off the decision to integrate Wanganui Collegiate, did she read the section on attendance dues and donations, which stated that “While the remaining costs to day pupils are voluntary, there would be considerable pressure on families to pay these. This is clearly a limiting factor for families in the local Whanganui network to access education at Wanganui Collegiate, given the socio-economic profile of the area.”; if so; does she still believe that her decision to integrate the school means that a collegiate education will be available to a wider number of students?

Hon HEKIA PARATA: Yes, and yes.

Chris Hipkins: Is she aware that Wanganui Collegiate describes, under the information about its fees, that “The active involvement in house and on-campus activities for all students is unique and develops and maintains the collegial sense of community within our students.”; if so, is she seriously arguing that there is a place within Wanganui Collegiate for students whose parents will not pay the $5,200 parental contribution?

Hon HEKIA PARATA: Yes, and yes.

Chris Hipkins: When she signed off the decision to integrate Wanganui Collegiate, did she read the ministry’s advice that “The Whanganui-Rangitīkei local network of State schools has significant surplus capacity, as does the wider network of State integrated boarding schools.”, that “The network of State secondary schools currently has surplus capacity of 1,407 student places.”, and that “There are a further 3,107 surplus student places in primary schools in the area.”; if so, will she rule out making any further changes to the schooling network in Whanganui?

Hon HEKIA PARATA: Yes, I did read, understand, and completely consider all of those details, and I am comfortable with the decision. We will continue to monitor provision in the wider Whanganui-Rangitīkei region.

Chris Hipkins: So that’s a no to the second part?

Hon HEKIA PARATA: We will continue to monitor it.

Mr SPEAKER: Question No. 12, Ian McKelvie. [Interruption] Order! [Interruption] Order! I have called Ian McKelvie.

Drinking-water Supplies—Assistance for Communities

12. IAN McKELVIE (National—Rangitīkei) to the Associate Minister of Health: What recent announcements has she made regarding assistance for communities to improve their drinking water?

Hon JO GOODHEW (Associate Minister of Health): Recently I announced that $7.9 million from the Drinking Water Subsidy Fund will be provided to small communities to help them establish or improve their drinking water supplies. This funding will help council and community water suppliers provide safer drinking water to 21 communities, totalling approximately 22,000 people.

Ian McKelvie: What types of project have been approved?

Hon JO GOODHEW: Every project that was applied for in this year’s funding round and met the technical requirements has had a subsidy approved. Subsidies ranged from over $2 million for the Whakatāne District Council to upgrade the Rangitaiki Plains - Edgecumbe water supply, serving 1,730 people, to $51,000 being provided to the Pirihima Whanau Trust to treat and filter the Te Kohanga - Pirihima water supply, so that around 55 people will receive safer drinking water. In addition subsidies have been awarded to four West Coast of the South Island communities, and to Foxton, Featherston, Pahīatua, Whirinaki, Tuakau, Koriniti, Taumarunui, and other communities as well.

Iain Lees-Galloway: With regard to the technical requirements the Associate Minister referred to in her previous answer, what has been the impact of her Government’s decision to restrict access

to the Drinking Water Subsidy Fund by changing the deprivation index limit from three to seven, and reducing the Government contribution from 95 percent to 85 percent of total costs on communities like Tokomaru and others where the presence of giardia and cryptosporidium means water must be boiled to be safe?

Hon JO GOODHEW: Back in 2005, the Budget allocated time-limited funding of $117.8 million over the years 2006-2007 to 2011-2012 for the drinking water subsidies. But back in December 2010, the Government changed the timing of the expenditure so that it will now occur over a longer period of time to align better with the timetables of local authorities. Ten million dollars per annum is planned until the end of the programme, and it was determined that we would target the funding much more at the communities that needed it the most. Therefore, although I do not have the particular details I believe the member is asking for, this was to target the poorer communities in New Zealand and make sure that we also allowed the funding rounds to continue for much longer, allowing councils to make the best use of this money.

ENDS

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