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Questions and Answers - June 18


QUESTIONS TO MINISTERS

WEDNESDAY, 18 JUNE 2014

Mr Speaker took the Chair at 2 p.m.

Prayers.

Question No. 7 to Minister

Mr SPEAKER: Order! This is a point of order.

Hon Steven Joyce: I hope it is.

Mr SPEAKER: Order! I hope it is too, but there will not be any—[Interruption] Does the member still wish to raise his point of order?

GRANT ROBERTSON: Yes, I do, Mr Speaker—very much. Question No. 7, when it was originally lodged and accepted by the Clerk’s office, read: “What concerns, if any, has he expressed regarding the progress Health Benefits Ltd has made towards obtaining the $700 million of “savings” which”—and it now says—he “required”. Originally, it said “had threatened”. That was an authenticated document that your office accepted, and then it was changed after the Minister objected to that. I wonder, when we provide authentication, what the course of action is.

Prime Minister—Statements 1. Hon DAVID CUNLIFFE (Leader of the Opposition) to the Prime Minister: Does he stand by his reported statement that “if New Zealanders saved more, the money could go into the productive sector and fund new companies and investments”?

Hon BILL ENGLISH (Acting Prime Minister): Yes. I find it a lot easier to stand by my statements than that member does to stand by his.

Hon David Cunliffe: Will he stand by his position that New Zealand needs to increase its national savings and that he is not ruling out a move to a compulsory savings system?

Hon BILL ENGLISH: The Government has ruled out a move to a compulsory savings system because most of the people who can save effectively through KiwiSaver are already in it, and most of the people who are out of it have opted out because they are unable to save.

Hon David Cunliffe: Why did the Prime Minister earlier say that he was not ruling out a move to compulsory savings and has now told the House that he has?

Hon BILL ENGLISH: There has been quite a bit of discussion about that issue, and the Prime Minister has been remarkably consistent, which is quite different from the discussion about donations in which that member has been remarkably inconsistent.

Hon David Cunliffe: Does he agree with his finance Minister that there is an expectation that people “will be doing better than zero pay increases”; if so, would he expect those to take effect before 1 October 2015?

Hon BILL ENGLISH: Yes, the Prime Minister does agree with the finance Minister, which is a better effort than that member, who seems to have trouble agreeing with himself.

Hon David Cunliffe: Has the Prime Minister or, perhaps, his finance Minister put a figure on an acceptable level of a pay increase; if so, what is it, or are they taking advice from Mr Joyce?

Hon BILL ENGLISH: I presume the member is referring to the pay increase for Ministry of Business, Innovation and Employment staff, who were in industrial action yesterday. The Government has focused on managing the economy so that it can produce more growth and therefore higher incomes. Of course, the process by which any family or individual person gets a pay increase depends on their employer, the workplace they are in, or the market into which they are selling goods or services. Those are matters best worked out by them.

Hon David Cunliffe: If the Prime Minister is so worried that people are struggling to get by, why does he not adopt Labour’s policy of immediately increasing the minimum wage to $15 an hour, or is he just crying crocodile tears?

Hon BILL ENGLISH: The Government has just recently—I think it was just 3 months ago—increased the minimum wage, and in an economy where there is consistent growth we will be able to continue to increase the minimum wage.

Louise Upston: What sorts of tax changes would have an effect on household savings in New Zealand?

Hon BILL ENGLISH: The Government has made a number of tax changes, which have had a positive effect on savings. In 2010 we reduced the tax on work, the tax on profits, and the tax on savings, which enables all households to get a better return to saving. Other tax changes, such as a widespread capital gains tax, could actually have the effect of reducing savings because, as I understand it, the proposition for a capital gains tax is that it would apply directly to funds managed in KiwiSaver accounts, which means that gains currently being made by the growing investment through KiwiSaver would become subject to a capital gains tax, thereby reducing future savings.

Hon David Cunliffe: What is the Prime Minister doing to help people in the regions save when they are being punished by interest rate rises, increases that the New Zealand Institute of Economic Research says is a huge mistake and risks tipping them into recession?

Hon BILL ENGLISH: The Government has been very supportive of the regions through policy that enables them to make the best of their resource-based economies. In fact, we have been strong advocates for the regions in a fairly similar way to the way the Leader of the Opposition was a strong advocate for Mr Donghua Liu, as we discovered today.

Mr SPEAKER: Order!

Economy—Reports 2. PAUL FOSTER-BELL (National) to the Minister of Finance: What reports has he received on progress New Zealand is making in improving its external trade and investment position with the rest of the world?

Hon BILL ENGLISH (Minister of Finance): Statistics New Zealand this morning issued data showing that New Zealand posted a balance of payments surplus of $1.4 billion in the 3 months to 31 March. This is the largest quarterly surplus on record, before seasonal adjustments. It helped to reduce the annual balance of payments deficit to 2.8 percent of GDP, the smallest annual deficit since 2010, and it is another indicator of progress since the Opposition parties decided there was a balance of payments crisis. Looking ahead, the deficit is likely to increase somewhat as capital investments pick up further and export prices come off their historic highs. We are working hard, though, to prevent a reversion to the deficit that was as large as it was between 2006 and 2008 under the previous Government.

Paul Foster-Bell: How do the latest balance of payments and net international investment position statistics compare with the situation this Government inherited nearly 6 years ago?

Hon BILL ENGLISH: Both of these indicators have improved in the last 5 or 6 years. In late 2008, the balance of payments deficit was around 7 percent of GDP, having peaked at 7.9 percent in 2006. Today it has narrowed to 2.8 percent of GDP—acknowledging, though, that it is likely to deteriorate over the next couple of years. Our net international investment position has improved significantly. In 2009, New Zealand’s liabilities to the rest of the world were equal to 85.9 percent of GDP. The latest figures are that this has improved substantially to 65.3 percent of GDP. That is still high by international standards, but it is the lowest level of liability since 2001.

Paul Foster-Bell: What were the main factors driving the improvement in New Zealand’s balance of payments and net international investment position in March?

Hon BILL ENGLISH: There were a number of contributing factors. There were goods exports across a range of commodities, with meat making the most significant contribution. Exports of services were also increased as overseas visitors to New Zealand spent more while they were here. Unfortunately, Statistics New Zealand was not able to count secret donations from Mr Donghua Liu to the Labour Party—

Mr SPEAKER: Order!

Hon David Parker: Is he concerned about the conclusion of the chief economist at the New Zealand Institute of Economic Research,Shamubeel Eaqub, who says that the big gaps opening up in New Zealand are across geographical, race, and education lines, and he thinks that this is one of the biggest challenges for New Zealand?

Hon BILL ENGLISH: No, I am not concerned about his conclusions. Mr Eaqub may have recently discovered that there are educational differentials within New Zealand. This Government has been working very assertively to close up those differences over the last 5 years. It is now starting to make some significant progress—where, for instance, it is now much more likely that Māori and Pasifika students will reach national standards and that they will pass NCEA level 2.

Paul Foster-Bell: What approaches to economic policy would put at risk the good progress being made with the balance of payments and net international investment positions?

Hon BILL ENGLISH: There are really two things that the Government is seeking to manage. One is that a rapid rise in Government spending has occurred up to 2008, and the Government is managing that by curbing its own spending over the next few years. The second is to work with councils to manage our fast-rising housing market, because continued inflation in the housing market will tend to force interest rates higher than they should be.

Business, Innovation and Employment, Ministry—Pay Negotiations 3. GRANT ROBERTSON (Labour - Wellington Central) to the Minister for Economic Development: Did he meet with the Chief Executive of the Ministry of Business, Innovation and Employment on 4 June 2014, and if so did he discuss with him the pay negotiations that were under way with MBIE staff?

Hon STEVEN JOYCE (Minister for Economic Development): Yes, and yes. The chief executive briefed me on progress with the negotiations.

Grant Robertson: Is it correct that pay negotiations with ministry staff were adjourned until 3.30 p.m. on 4 June to allow for his approval to be sought for the offer the ministry intended to make at a meeting held at 2.30 that day?

Hon STEVEN JOYCE: I have no idea about the timing on that day or on any other. He was just briefing me with an update on the negotiations.

Grant Robertson: When he said to the House yesterday that the Cabinet Manual and the State Sector Act both make it clear that Ministers are not to get involved in pay negotiations, why was he approving the pay offer to be given to Ministry of Business, Innovation and Employment staff, which resulted in negotiations being delayed until he had given that approval?

Hon STEVEN JOYCE: The member’s assertion is completely incorrect. I did not approve it.

Grant Robertson: What did he say to David Smol in the meeting on 4 June with regard to the pay offer being made to ministry staff?

Hon STEVEN JOYCE: As I recall it, Mr Smol came in, he sat down, and he gave me an update on the negotiations. I do not think I said much to him at all, except I think I said to him that my only counsel to him was to keep the State Services Commission informed on progress.

Grant Robertson: Did he tell the chief executive at that meeting that he did not believe anything more than the pay offer that was on the table was appropriate?

Hon STEVEN JOYCE: Well, as I say, Mr Smol did not seek my advice in that regard, and I did not give it.

Sexual Violence Prevention—Initiatives 4. MELISSA LEE (National) to the Minister for Social Development: What recent announcements has she made about campaigns to prevent sexual violence amongst young people?

Hon PAULA BENNETT (Minister for Social Development): Last week I was pleased to launch the Are You That Someone? Let’s Stop Sexual Violence campaign, an initiative aimed at preventing sexual violence amongst young people. One in three women and one in 10 men will be victims of sexual violence at some point in their lives, and 16 to 24-year-olds are at a higher risk of sexual assault than any other age group. Central to the campaign is a series of four posters showing situations that could lead to sexual violence, such as an intoxicated young woman being led into a bedroom by a man at a party, and a man paying unwanted attention to a woman in a bar. The posters encourage people to step in and intervene when they see someone in potential danger, or to even just ask them whether they are OK.

Melissa Lee: What was revealed about young people’s attitudes and experiences of sexual violence when the campaign was being developed?

Hon PAULA BENNETT: What some of the young people revealed during focus groups to develop this campaign was quite shocking. They said that sexual violence was common at parties and in bars, but that there was a culture of standing back and not doing anything about it. Often they do not intervene because they are scared of being made fun of by their friends. Some of the comments that focus groups received included: “Because we have got a drinking culture, these things just happen.”, “Sexual violence definitely happens. There’s at least one creep at every club.”, “I have seen situations when guys are all over girls and they’re clearly not into it, but the guy doesn’t seem to care.”, and “If you get it wrong”—intervening, that is—“then it’s you who looks like a dick.” Their feedback told us that what we needed to do was to empower them to know how to intervene and when to intervene.

Melissa Lee: What success has the campaign had so far in reaching its key audience?

Hon PAULA BENNETT: We launched it just last Friday and, as well as the posters, the campaign is being promoted heavily on social media such as Facebook in order to reach its target, which is young people. Its reach is already wider than we expected, with 163,000 people already viewing activity on the Facebook page.

Carol Beaumont: What are the reasons for the Government’s failure to act on the recommendations of the Task Force for Action on Sexual Violence that it received in 2009, which would have meant over 5 years of focus on preventing and dealing with “the appalling rate of sexual violence in this country”?

Hon PAULA BENNETT: We certainly have picked up some of the recommendations from that task force and from that report. What we have also done, of course, is just this year put another $10.4 million into sexual violence services for those at the coalface, which is making a huge difference. Also ACC has stepped in and is also providing another whole lot of information. Actually, if you spoke with people in the sector they would say there is more going on in terms of the support for those front-line social services than ever before and that they have had their money doubled.

Energy and Resources, Minister—Decisions 5. Dr RUSSEL NORMAN (Co-Leader - Green) to the Minister of Energy and Resources: Does he stand by all his decisions?

Hon Dr NICK SMITH (Minister of Conservation) on behalf of the Minister of Energy and Resources: Yes, and particularly the decision to see nearly 300,000 more homes insulated, improving people’s health, reducing energy use, and helping make their power bills more affordable.

Dr Russel Norman: How can he stand by his decision to open over 3,000 square kilometres of the West Coast North Island marine mammal sanctuary to oil exploration, a sanctuary that was established to protect the Māui’s dolphin?

Hon Dr NICK SMITH: Because it is a perfectly logical decision. The area where the Māui’s dolphins reside is between the Kaipara and Kāwhia harbours, out to 7 nautical miles. The block offer is nowhere near this. There has not been a single observation of a Māui’s dolphin in the block offer area and, furthermore, there has not been a single incident involving Māui’s dolphins in the oil and gas industry in Taranaki over the past 44 years, despite 23 wells being drilled in the closest proximity to where the Māui’s dolphins live. The proposals to quadruple the protected area for Māui’s dolphins to areas where there is evidence they do not go and to ban all activities like oil and gas would cost Taranaki over 5,000 jobs and the New Zealand economy $3 billion a year. It would be extreme Green lunacy.

Dr Russel Norman: How can he propose more seismic surveying in a Māui’s dolphin sanctuary, against the advice of the world’s largest professional scientific body dedicated to research on marine mammals, which has specifically asked his Government to stop such seismic surveying because it is a threat to the very survival of the Māui’s dolphin?

Hon Dr NICK SMITH: In fact, prior to this Government there were no rules around seismic survey work in such areas. It is this Government, through both the exclusive economic zone legislation and then the seismic survey regulations, that sets down very clear standards to protect marine mammals. If Parliament were to adopt the position being promoted by Russell Norman, you would have no oil or gas industry in New Zealand, because marine mammals are throughout our ocean area, and that would be an economic disaster for this country.

Jami-Lee Ross: What is the Minister’s response to the decision today by the Environmental Protection Authority to decline the application by Trans-Tasman Resources to mine ironsands in the exclusive economic zone south of Hāwera?

Hon Dr NICK SMITH: This decision of the Environmental Protection Authority confirms the robustness of the regulatory framework this Government has put in place to achieve our balanced approach of developing New Zealand’s mineral resources but within the parameters of high environmental standards. I remind the members opposite there were no rules in the exclusive economic zone prior to this Government. This proposal would not have even needed a consent if it was not for our law. Members opposite have slagged the Environmental Protection Authority as a joke and as a rubber stamp. They now owe the Environmental Protection Authority an apology.

Dr Russel Norman: Is the Minister now saying that the 2,000 expert marine mammal scientists are wrong to assert that seismic surveys can harm dolphins’ hearing and drive them into unprotected areas where they are more exposed to fishing nets and hence death; if so, what is his evidence that the 2,000 marine mammal scientists who have told him not to do this are wrong?

Hon Dr NICK SMITH: The Minister of Energy and Resources has consulted with the Minister of Conservation and the very best advice in New Zealand in respect of protecting Māui’s dolphins. It shows that over 95 percent of the risk to Māui’s dolphins is in fact from set-netting, and this Government has doubled that area of protection. There has not been a single Māui’s dolphin recorded or observed outside the area that this Government has protected. What the member is effectively advocating is that we shut down industries like fishing and oil and gas, even in areas

where, despite hundreds of trips of independent observers, there is no sign of any Māui’s dolphin. My challenge to the member is simple: show me the Māui. [Interruption]

Mr SPEAKER: Order! That is a good example of how disorder is created. If the member would simply rise, without interjection, and ask his supplementary question I, for one, would be very grateful.

Dr Russel Norman: Does the Minister understand that there is a difference between the risk to Māui’s dolphins from existing production wells and adding new risks to Māui’s dolphins from new seismic surveying and new drilling of exploratory wells, which is exactly what he has just approved?

Hon Dr NICK SMITH: I refer the member to the extensive risk management report on Māui’s dolphins. It said that over 95 percent of the risk to Māui’s dolphins was from set-netting, and that is why this Government has doubled the area of protection from set-netting. It said that the risks from the oil and gas industry were small, and actually smaller than from passing vessels. That is, if you want to take the approach that the oil and gas industry is a risk to Māui’s dolphins, an even bigger risk is from having boats that might hit them when they go past. If the member is seriously suggesting that we ban all boats from any movements on the west coast of the North Island, I look forward to campaigning and contesting that stupid, extreme Green point of view.

Dr Russel Norman: Why will the Minister not just be honest and tell the people of New Zealand that he cares more about expanding the oil industry—this is new oil industry—[Interruption]

Mr SPEAKER: Order! If the member would just finish his question. It is a good example, again, of the member inflaming the situation with his opening remarks. Would he finish the question, so we can get on with it.

Dr Russel Norman: Well, you do not quieten them down, Mr Speaker.

Mr SPEAKER: Order! The member will finish his question, otherwise we will be moving to the next question.

Dr Russel Norman: Supplementary question then, Mr Speaker.

Mr SPEAKER: Just finish the question.

Dr Russel Norman: Why will he not say that he cares more about expanding the oil industry in New Zealand, because that is what it is all about, rather than whether or not the world’s most endangered dolphin becomes extinct? He has put expanding the oil industry ahead of protecting—

Mr SPEAKER: Order! The member will resume his seat. The question has been asked, and the Minister can answer.

Hon Dr NICK SMITH: I would love to have an honest debate with the member about this issue, because there have been 23 drills for petroleum within the marine mammal sanctuary over the last 40 years, without incident. If the member’s position is that there should be no oil and gas, he should be honest that that means closing the Pohokura gas field, which provides 50 percent of New Zealand’s gas resource. It would mean putting 5,000 people out of work. And I point this out: it would result in the coal-fired power station at Huntly having to be turned back on again, greenhouse gas emissions going through the roof, and that would be both economically and environmentally reckless and irresponsible.

Dr Russel Norman: When will the Minister simply tell the truth about this issue—

Mr SPEAKER: Order! The member will resume his seat. I will give the member one opportunity to ask a supplementary question in accordance with the rules, otherwise we are moving to the next question.

Dr Russel Norman: I raise a point of order, Mr Speaker. In many of the Minister’s answers he has said or implied that I have not told the truth. You have not pulled him up once about that.

Mr SPEAKER: Order! The Minister has responded, I think, reasonably in line with the line of questioning. I invite the member, if he wants to ask another supplementary question, to do so. [Interruption] He does not wish to? Then we move immediately—

Dr Russel Norman: Supplementary question.

Mr SPEAKER: Well, the member just shook his head. If the member wishes to ask a supplementary question in line with the Standing Orders, I will give him the opportunity.

Dr Russel Norman: How does opposing the expansion of the oil industry through new oil exploration drilling wells and through new seismic testing equate to the same thing as shutting down the entire existing production oil and gas industry, as that Minister keeps implying in his answers today and in his other public statements?

Hon Dr NICK SMITH: I think there is a logical inconsistency to be saying that about the existing 23 wells that have been drilled, as well as the Pohokura gas field that currently operates within the marine mammal sanctuary, and saying that for over 40 years there has not been a single incident of any harm to Māui’s dolphins. There has not been a single report. What is more, when the scientific evidence is that the primary risk to Māui’s dolphins is set-net fishing, it has been absolutely right and rational for this Government to focus its efforts to ensure the survival of the Māui’s dolphins by focusing on those things that actually cause the Māui’s dolphins harm and within the areas where the Māui’s dolphins actually exist.

Dr Russel Norman: With regard to the scientific evidence, has he read the report from the Scientific Committee of the International Whaling Commission, which concluded that the protections he is talking about will not stop the extinction of Māui’s dolphins and that the “current management situation falls short of that required to reverse Māui’s decline.”?

Hon Dr NICK SMITH: Yes, I have read the International Whaling Commission’s latest recommendation and report. It promotes that the Government increase by fourfold the area of the set-net fishing ban. But I have a simple problem: there has not been a single case of an observation of a Māui’s dolphin in that quadrupled area—not one. There have been over 700 fishing trips and on every one of those fishing trips there has been an independent observer. I am not going to shut down industries, whether it be oil or gas or fishing industries, in places where there is no evidence that Māui’s dolphins exist.

Christchurch Innovation Precinct—Announcements 6. JACQUI DEAN (National - Waitaki) to the Minister of Science and Innovation: What announcements has he made on the Christchurch Innovation Precinct?

Hon STEVEN JOYCE (Minister of Science and Innovation): During the adjournment the Canterbury earthquake recovery Minister, Gerry Brownlee, and I released the spatial framework for the Christchurch innovation precinct, and announced that Vodafone’s new South Island headquarters will anchor that precinct. It will bring together businesses and innovators alongside residential, retail, hospitality, and professional service providers to create a vibrant and exciting new part of Christchurch. Vodafone has announced it will set up an expanded main South Island office in the innovation precinct, as well as one of its international zone incubators, which will be only the sixth such incubator that Vodafone has set up across the world. The zone incubator offers advice, support, and assistance to technology start-ups focused on mobile platforms, consumer electronics, smart charging, and automotive technologies.

Jacqui Dean: How will the Government support the innovation precinct?

Hon STEVEN JOYCE: The Government will be supporting the innovation precinct by developing an additional innovation hub to accommodate start-up companies within the precinct. This purpose-built facility will accommodate Callaghan Innovation and New Zealand Trade and Enterprise’s business-facing services, as well as one of three new information and communications technology graduate schools that have been announced as part of Budget 2014. Innovation precincts work best when they bring together a good mix of larger established companies, innovative start-ups, research, and teaching facilities. Offering a low-rent option for start-up companies in this knowledge-rich environment, among other innovative firms, will help them grow and expand, and provides an ideal mix of small and large firms within the precinct.

Jacqui Dean: What role will the new information and communications technology graduate schools play in the precinct?

Hon STEVEN JOYCE: As part of the Budget, the Government is establishing three new information and communications technology graduate schools, and one of them will be in Christchurch, in the precinct. The new schools will be provided with funding for education, research, and collaborative initiatives to attract top students and academics, and connect them closely with high-value, high-tech firms accelerating the growth of New Zealand’s information and communications technology talent. We expect to see a combination of final-year undergraduate and postgraduate programmes at the schools, plus an innovative use of internships and research to help improve the connections between providers and businesses and ensure a smooth transition of students into work. It is vitally important that New Zealand lifts significantly the number of people with high-level information and communications technology skills and knowledge so that they can help drive the innovation we are seeing in this rapidly expanding sector.

District Health Boards—Health Benefits Ltd 7. Hon ANNETTE KING (Labour - Rongotai) to the Minister of Health: What concerns, if any, has he expressed regarding the progress Health Benefits Ltd has made towards obtaining the $700 million of “savings” which he required them to obtain in September 2012?

Hon TONY RYALL (Minister of Health): I have expressed the view to district health boards as to the importance of working collaboratively to harness the power of bulk purchasing and standardisation to free up resources to invest in more front-line services for patients. By way of example, by working together the district health boards are expecting to save up to $16 million this year on banking and insurance costs, and $34 million this year on regional shared-service initiatives. The estimate is that by the end of this financial year we will have saved around $300 million, which is in addition to some other district health board savings.

Hon Annette King: Is he aware that as recently as 2 months ago Health Benefits Ltd signalled to district health boards cost escalation and potential delays of at least 1 and up to 2 years in the implementation of his flagship finance procurement and supply chain programme; if so, what impact will this have on the $700 million saving he requires health bosses to make?

Hon TONY RYALL: On the finance procurement supply chain issue, the latest set of data that I have looked at is that we are running below the budgeted cost. It is now operating on the national platform at Hutt Valley District Health Board. But I have got to say that implementation is always an area of risk and it has certainly been my message to the board of Health Benefits Ltd to make sure that a lot of emphasis goes into the implementation, because if we are to generate the savings that we need to put straight back into the health service, then implementation has to be a very strong focus.

Hon Annette King: Has he been informed that profound concern has been expressed at the mounting risk to the delivery of health services because of Health Benefits Ltd’s lack of transparent and timely information, lack of accountability for decision-making, lack of timely communication, and the absence of a credible implementation plan?

Hon TONY RYALL: With change always comes worry for people, because they have uncertainty about their jobs. I am very aware that people are worried about some of these proposals, but people need to keep their eye on the real gains here, and the gains are that by working more effectively together district health boards can make significant financial savings, and those resources can go back into supporting improved front-line services, together with the average $500 million a year extra that this Government has put into the health service.

Hon Annette King: Would he be taking action if all chief financial officers of district health boards said they had grave and collective concerns about his flagship Health Benefits Ltd programme, its cost escalations, implementation delays, benefit erosion, and escalating risk profile; if not, why not?

Hon TONY RYALL: I have been really quite keen that chief financial officers were taking an active interest in the implementation of these programmes, because they are very important and very significant. Some parts of the programme are moving ahead and ahead of budget and others are going a little bit slower because of the implementation risk. Overall, we are going to be freeing up hundreds of millions of dollars over time for district health boards—all that goes into improving front-line services. As you have seen already with the insurance and banking and other initiatives, that is money that we can save that goes into more care for patients.

Hon Annette King: What is the cost of funding the growing empire of Health Benefits Ltd, which now occupies four floors across two buildings in Central Park, Auckland, while at the same time district health boards are struggling to retain staff because of the uncertainty of Health Benefits Ltd’s programme, leading to significant risks in continuing current services?

Hon TONY RYALL: I do not think there is any risk to the continuing of front-line services in our district health boards. This Government has put an average of $500 million a year extra into the health service. But it is not just about money; those extra services are benefiting from the improved productivity that we are seeing, where we have 40,000 more New Zealanders a year getting hips, knees, and other elective procedures than when that party opposite left Government.

Hon Annette King: I seek leave to table a letter from all chief financial officers of district health boards saying there was uncertainty leading to significant risk in continuing current services, that there is profound concern—

Mr SPEAKER: Order! The member will resume her seat. The document has been described. It is a letter signed by all chief financial officers. Leave is sought to table that document. Is there any objection? There is none. It can be tabled. ocsKING, Hon ANNETTEDocument, by leave, laid on the Table of the House.

Health Services—Bay of Plenty 8. SHANE ARDERN (National - Taranaki - King Country) to the Minister of Health: What recent investments has the Government made in health services for the Bay of Plenty?

Hon TONY RYALL (Minister of Health): Last week the local MP, Mrs Anne Tolley, and myself were privileged to open the new $67 million Whakatāne public hospital. With more hospital beds and extra services, this building will ensure that the 50,000 people living in that region continue to receive high-quality care for many years to come. The new building includes three state-of-the-art operating theatres, a larger emergency department, a modern radiology department, bigger in-patient wards, an acute care unit for patient observation, and a 10-bed paediatric ward. This new building makes it easier for staff to provide better, faster, and more convenient care for patients in that region.

Shane Ardern: What other capital investments has the Government made in health services?

Hon TONY RYALL: Well, that is a very good question. The Government has invested around $1 billion, in the most difficult of economic times—$1 billion—into capital projects and district health boards, and we are continuing to invest more money in upgrading our New Zealand public hospitals. This includes $83 million for the revamp of Rotorua Hospital; a $190 million clinical services upgrade at Middlemore Hospital; $80 million at the Taranaki-based hospital, at which the member will be joining me at the official opening, I think next week in New Plymouth; and $27 million for the east wing redevelopment of the Tauranga public hospital.

Schools, Partnership—Funding

Mr SPEAKER: Order! I am going to ask the member to repeat that question. It was being interjected on from my left. It was unable to be heard. 9. TRACEY MARTIN (NZ First) to the Minister of Education: How much public money has been spent on land and other physical assets for Partnership schools up to 31 March 2014?

Hon NIKKI KAYE (Associate Minister of Education) on behalf of the Minister of Education: The Government provided $6.6 million in establishment funding to five schools for 2013, and approximately $1.9 million in operational funding for the first quarter of 2014. Around a quarter of that funding is provided for property and insurance, in accordance with the partnership schools funding formula that was approved by Cabinet. What they have actually spent will vary across schools and is monitored quarterly through their reporting. One of the key aspects of partnership schools is that they have more flexibility in how they spend their total funding.

Tracey Martin: To whom do these taxpayer-funded assets now legally belong?

Hon NIKKI KAYE: Obviously I am answering on behalf of the Minister of Education, but what I can confirm is that there are specific agreements in place with each of the five partnership schools. In some cases I am sure that they will own the specific assets.

Tracey Martin: In light of that answer, is the Minister able to tell us what ability the taxpayer has to reclaim these assets, should a partnership school close or be closed?

Hon NIKKI KAYE: That is a very good question. My understanding is that should a partnership school contract cease prior to the expiry date, the ministry would work, of course, to recover any unused funding by any means possible, and ideally through a negotiated agreement. In terms of issues around land, etc., that would go through a commercial process. Any course of action taken will depend on the circumstances contributing to the ending of the contract.

Tracey Martin: Can she assure the public that the funding for partnership schools on a per student basis is at no more favourable a rate than mainstream State schools?

Hon NIKKI KAYE: I think this a very good question as well. I think it is very unhelpful—I have seen comparisons of the per student funding basis between State schools and partnership schools. The whole point of these schools is that there is an establishment phase. That means we will be spending more money in that establishment period. But also it is very important to realise that just like any other school that is being established, they will not reach their maximum roll, necessarily, in the first year. What I think is important is that we give these schools a fair go and we realise that actually they are dealing with some of our most disadvantaged students, and so in the first instance those comparisons are very unhelpful.

Tracey Martin: So can the Minister just clarify that in her answers to the two previous questions she said that there is no set process for the reclaiming of public assets purchased by partnership schools, should they close, and that at the same time the Government is currently funding them at a higher level because they are establishing schools?

Hon NIKKI KAYE: No, that is not what I said in terms of both parts of that question. The first thing that I said is that we would seek, via the sponsor agreement, to work through what had been agreed, but we also go through the same process with any other school that closes. We look at what the commercial situation is around those assets. So there is a set process—it is the same process that we go through with other schools; it is just a little bit more complicated because there are sponsorship agreements. In terms of the second issue, I said that I think it is very unhelpful to compare on a per student basis, because, yes, they are in the establishment phase, and also the whole purpose of partnership schools is that there is flexibility around what those funds can be used for, so comparisons are very unhelpful. But what I would say to the member is that I think what you can have confidence in is that they are on track in terms of their establishment roles and when you look at that overall basis, when they get to the maximum roll, we are very confident of the investment that we are making in these children—some of our most disadvantaged children.

Mr SPEAKER: Order! The answer is long enough.

Chris Hipkins: Do the sponsorship agreements for partnership schools allow the Crown to recover capital from those schools in the event that they cease operating prior to the end of their contracts; if so, which clause allows that?

Hon NIKKI KAYE: I do not have all of those contracts on me, but what I can say is that the advice I have had is that should a contract cease prior to the expiry date, the ministry would look to seek to recover that funding by any means possible—ideally through a negotiated agreement.

Tracey Martin: In light of the Minister’s previous answers that partnership schools are not being given priority in terms of education spending, how can she explain that at least one of the current partnership schools is funded at a level to allow a 1:9 student ratio while mainstream State schools have a prescribed ratio of one teacher to 27.5 students?

Hon NIKKI KAYE: I do not agree with what the member said in the first part of the question. The second thing that I would say, though, is we have been really clear, actually, that the whole benefit of bringing innovation into the system is to enable these schools sometimes to do different things and have more teachers per student for very disadvantaged students if that is what the school thinks is best for those students. We are very proud of the fact that we are helping some of our most disadvantaged students, and we need a flexible model to do that.

Tracey Martin: I seek leave to table a speech by Hekia Parata on 16 May 2012—

Mr SPEAKER: Order! That speech will be on the web and available for all members.

Marine Protection—Progress 10. JONATHAN YOUNG (National - New Plymouth) to the Minister of Conservation: What steps has the Government taken to improve marine protection, particularly in respect of dolphins?

Hon Dr NICK SMITH (Minister of Conservation): This Government has approved a record number of new marine reserves. We have banned shark finning. We have passed a new exclusive economic zone law that requires the Environmental Protection Authority to robustly check proposed activities in our vast ocean area for their environmental effects. Specifically for dolphins we have also implemented compulsory regulations to protect marine mammals from adverse effects from seismic testing. I also note the recent good news that the estimated population of our Hector’s dolphin on the east coast of the South Island is now at 9,000, which is significantly up from the previous estimate of 2,000. Their West Coast sub-species, the Māui’s dolphin, is the greatest concern, and there we have more than doubled the area of protection and banned from set netting, which actually is the greatest risk to that species out of 55.

Jonathan Young: Has the Minister any concerns for the Māui’s dolphins from the 2014 petroleum block offer to the oil and gas industry in Taranaki?

Hon Dr NICK SMITH: No, I do not. The vast bulk of the block offer is nowhere near the home of Māui’s dolphin and, in fact, there has not been a single sighting—despite over 885 sightings—in the area of that block offer. Secondly, there has not been a single incident involving a Māui’s dolphin in the oil and gas industry over the last 40 years in the Taranaki region.

Hon Ruth Dyson: So is he saying that he is right and that the scientific committee of the International Whaling Commission, consisting of 200 whale and dolphin scientists, which has said for the third year in a row that these protections he has outlined are inadequate, is wrong; if so, why is he right and they are all wrong?

Hon Dr NICK SMITH: I rely on the scientific advice from both my Department of Conservation and the Ministry for Primary Industries. I would point out the International Whaling Commission technical committee has been absolutely up front that it had no interest in issues in respect of the economy of fishing or in respect of the oil and gas industry. It has not been able to provide me any evidence in wanting to go out to 20 nautical miles of the presence. A single report—

Hon Ruth Dyson: The International Whaling Commission—listen to them.

Hon Dr NICK SMITH: I have a single challenge for the member. Show me a single incident or a single record of an observation of a Māui’s dolphin. What members opposite are arguing is that we ban fishing and oil and gas exploration even in areas where there is no record of Māui’s dolphin having ever been observed.

Hon Ruth Dyson: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! This is a point of order, Dr Russel Norman.

Hon Ruth Dyson: I seek leave to table two maps. The first shows in green the nautical mile—

Mr SPEAKER: Just describe them very quickly and I will put the leave.

Hon Ruth Dyson: —protection that is being offered and the brown existing and continuing line—

Mr SPEAKER: Order! OK, that one has been described. Would you describe the other.

Hon Ruth Dyson: The second one shows in yellow the proposed block offer—

Mr SPEAKER: Order! [Interruption] The member will resume her seat. Those documents have now been adequately described. Leave is sought to table those two maps. Is there any objection? There is none. ocsDYSON, Hon RUTHDocuments, by leave, laid on the Table of the House.

Adult and Community Education—Funding 11. Dr MEGAN WOODS (Labour - Wigram) to the Minister for Tertiary Education, Skills and Employment: How many secondary schools currently receive Adult and Community Education funding compared to the 212 secondary schools in 2009 when the funding was cut?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): I am advised that 21 are directly funded and a number of others are indirectly funded through the first 21. For the member’s information, there are also 26 community providers, six private training establishments, one Rural Education Activities Programme, 18 Institutes of Technology and Polytechnics of New Zealand, and onewānanga funded.

Dr Megan Woods: Does he think it is acceptable that since the 2009 funding cuts, there is now no school-based adult and community education provision in the Hawke’s Bay and the Hutt Valley, and that in the lower North Island, where there used to be 21 adult and community education providers, there now are only two?

Hon STEVEN JOYCE: I think the member should look at the wider question of foundation education in those regions. Actually, we have unapologetically been more focused on foundation education that delivers qualifications that get people on a ladder to achievement and improved incomes. In this Government we have achieved a record number of qualifications. The member is entitled to her view, but, actually, I think we have a good balance of foundation education across all parts of New Zealand.

Dr Megan Woods: If foundation literacy and numeracy are his priority, as claimed, why did he in 2012 cut $22 million worth of community education funding designed to encourage embedded literacy and numeracy learning in level 1 to 3 courses?

Hon STEVEN JOYCE: I do not have the exact information to hand but I am pretty sure the member is incorrect. There was a shift in funding from one fund to another fund at that time, but, actually, we are spending something like $69 million a year in community education, including the type the member mentioned just then—$69 million a year—so I invite her to go back and look through the appropriations. I am more than happy to help her find the locations of the particular sums of money.

Dr Megan Woods: How does the Minister reconcile the Hon Bill English’s 2009 claim that a good proportion of those people will be able to continue to adult and community education with the fact that there are now 150,000 New Zealanders who once attended night school but do not now have the opportunity?

Hon STEVEN JOYCE: As I said to the member, if she is determined to make it simply about schools, yes, there has been a change—there is no doubt about that. But there are a whole lot of other providers for both informal and formal foundation education. If the member is criticising us for cutting funding for Moroccan cooking and concrete shell mosaics and some of the other classes that were in those schools at that time, I am very happy for her to do that. This Government’s record

on tertiary education is a heck of a lot stronger, and if her solution is to simply go back to 2008, she is welcome to it.

Dr Megan Woods: How does the Minister reconcile his comments labelling adult and community education courses as low-value and hobby courses with the view of his colleague the Hon Bill English, who in 2005 emphasised the importance of a wide range of night classes, including furniture restoration and painting, and stated that he believed that adult and community education is a place for education not aligned with Government priorities?

Hon Bill English: That’s exactly what we’ve done.

Hon STEVEN JOYCE: I think that is exactly what we have done. The reality of the situation is the Government is funding $69 million a year in community education across a whole range of providers. The member, of course, is entitled to her view. I think the whole Labour Party thinks that everything that happened prior to 2008 was pretty good and everything that has happened since is pretty bad. That appears to be its view. I do not think it has got anything new to say but if it wants to go back to 2008, that is fine. We stand by our record and the number of qualifications achieved in foundation education.

Family/Whānau and Sexual Violence—Minister’s Statements 12. JAN LOGIE (Green) to the Minister for Social Development: Does she stand by her statement in relation to sexual and domestic violence that “it is actually about services on the ground that are able to address it”?

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

Jan Logie: Given this focus on services on the ground, will she step in to ensure that the only 24/7 specialist sexual violence service in Canterbury has the funding to remain open after Friday, when it will otherwise close due to her funding decisions?

Hon PAULA BENNETT: That is not correct. It is not correct that it is due to our funding decisions that it is closing. That service is currently not a Ministry of Social Development - approved provider, although officials have been working with it. That is the report that I have had. We are very keen to see it stay open, but, at the end of the day, it has to be an approved provider and it has to be financially viable for us to be doing that.

Jan Logie: What is her message to the women of Canterbury, who, from Friday, will no longer have a specialist sexual violence service to go to for help, now that she has refused to fund SAFECARE?

Hon PAULA BENNETT: We are not simply just refusing to fund it. There are issues with the provider that we are very keen to resolve. We will continue working with it. The member is shaking her head; she makes it sound like we do not want to fund it or that it is our desire to see it close down. Nothing could be further from the truth. When there are issues with the provider, we have a responsibility accounting-wise and auditing-wise to the taxpayers of New Zealand to make sure that that funding is being used appropriately, and that is what we are doing.

Jan Logie: Has she consulted in that decision the police, who refer four victims a day to that service and are required to refer to it when somebody reports, but who, after Friday, will not even have a service in Canterbury to meet their protocol obligations for immediate support for victims?

Hon PAULA BENNETT: I really have nothing further to add. I am being as upfront as I can. There are issues that we are very keen to resolve. The ministry is working with that provider. We would like to see it open next week, but we have a responsibility to the taxpayer to make sure that we are doing that in the appropriate manner, and that is what we are doing.

Grant Robertson: In light of her answer to the primary question, why did she and her ministry deny funding to Shakti to have a safe house for Asian, African, and Middle Eastern women who are victims of domestic violence in Wellington, despite Housing New Zealand having found a property for it?

Hon PAULA BENNETT: We are still working with Shakti. We have done a review of the Wellington region. It is working with Women’s Refuge—and not at this time, because we think there is further work that needs to be done alongside the refuge, but we are certainly not closing the door completely.

Jan Logie: Does the fact that services are closing and are being denied funding, and refuge funding cuts has meant that Palmerston North Women’s Refuge has lost one of its two safe houses, three staff, including all of its children’s advocates, and it has had to cancel its children’s programme, not just show that it is not about services on the ground at all, but about saving money by short-changing women and children?

Hon PAULA BENNETT: It is simply not true that it is about short-changing women and children. What I can say is that yesterday I said that women’s refuges are getting millions more under this Government than they were under Labour. Funding has increased from $11.6 million in 2007-08 to $15.3 million now, in 2013-14. We put an extra $10.4 million into sexual violence services, which we announced just 2 months ago, which shows a real commitment to making sure that that funding is there for front-line services. We have a responsibility as well, though, to make sure that that funding is being spent responsibly. That is what we are doing across the board. We will support those services, where we can, and where it is a responsible thing to do.

ENDS

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