Questions to Ministers

Tax System—Multinational Enterprises

1. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement with regard to multinational corporations that “I suspect they are legally paying their correct amount of tax; the question is are they ethically paying the right amount of tax. It feels hard to believe that they are”?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Prime Minister: Yes, it is unfair that some multinational companies appear to be able to structure themselves so that they avoid paying tax anywhere in the world or so that they pay minimal amounts of tax. The only lasting solution to this problem is collective global action. The good news is that the OECD is leading work on base erosion and profit shifting, and New Zealand is an active participant in that work.

Andrew Little: Do all multinational companies in New Zealand comply with the OECD guidelines on multinational enterprises, which state that “enterprises should comply with both the letter and the spirit of the tax laws and regulations of the countries in which they operate.”?

Hon BILL ENGLISH: They are certainly required to comply with New Zealand law. We need to bear in mind that New Zealand has the ability to tax the profits of these companies in New Zealand—that is, revenue minus expenses. If profit is generated elsewhere, we do not have the ability to tax it in other jurisdictions.

Andrew Little: How many multinationals has his Government taken to the OECD dispute resolution process?

Hon BILL ENGLISH: I do not have that information, and I am not sure exactly what process the member is referring to. The New Zealand model for taxing these companies is about as robust as that of any developed country—that is, we have tighter rules on transfer pricing and thin capitalisation regimes. If they make profits here, they are taxed.

Andrew Little: Does he believe that the Australian-owned banks in New Zealand—[Interruption]

Mr SPEAKER: Order! I ask the member to start that question again.

Andrew Little: Does he believe that the Australian-owned banks in New Zealand, which are the most profitable banks in the developed world, are paying the tax they owe, or are Kiwis having to carry the burden for them as well?

Hon BILL ENGLISH: I believe that they are paying the tax they owe. In fact, 4 or 5 years ago Crown Law won major tax cases, where we collected hundreds of millions more out of the banks—

Hon Trevor Mallard: That Michael Cullen funded.

Hon BILL ENGLISH: —that is right; he did, too—and since then the rules have been further tightened in ways that the banks do not like, but it means that they do pay pretty close to the statutory rate of tax.

David Seymour: Is the Prime Minister aware that our company tax rate of 28 percent gives New Zealand one of the highest effective tax rates on capital in the OECD and that a more effective way of gaining more revenue might be to have a more competitive company tax rate? [Interruption]

Mr SPEAKER: Unless the noise settles down, particularly from my left-hand far quadrant, I will be asking members to leave, and that includes Mr Cunliffe. When I get to my feet—[Interruption] Order! [Interruption] Order!

Hon BILL ENGLISH: Yes, by international standards, we have a robust company taxation system. New Zealand has always believed in a broad-based, low-rate system, but that means having a company tax rate close to the higher levels of our personal tax rates. That is a bit unusual.

Andrew Little: What conversations has he had with the member for Epsom in relation to tax collection and the need to pay for superannuation, a topic that I know is very dear to the heart of the member for Epsom?

Hon BILL ENGLISH: None.

Andrew Little: Is it acceptable that his Government is penny-pinching to the extent that the health Minister now says of Pharmac that it has not got the money at the moment to buy life-saving medicines like Keytruda while, at the same time, multinationals are ripping us off for anything from $500 million to $7.3 billion a year, which is what the Tax Justice Network says New Zealanders are being ripped off by?

Hon BILL ENGLISH: I simply disagree with and rebut the assertion the member is implying, that the Government is soft on the taxation of companies. It is simply not the case. We have one of the most robust taxation systems for company profits in the developed world. The type of issues the Tax Justice Network is pointing to can be dealt with only by global cooperation to ensure that multinationals pay their tax somewhere. But, for instance, if Fonterra sells a billion dollars’ worth of product in China, we do not want the Chinese Government levying 30 percent tax on them, and nor should it be able to.

Andrew Little: Will the Government join with the Labour Party and support a parliamentary inquiry into multinational tax avoidance and stronger laws and more money for enforcement; if not, why not?

Hon BILL ENGLISH: The Parliament has a regular opportunity every time it looks at a taxation amendment bill—there are two or three a year, generally—and if you look back through the record of what the New Zealand Parliament had done, you will see that the Finance and Expenditure Committee has supported, as far as I know, every single measure that the Government has taken to ensure that multinational companies pay tax on their profits in New Zealand.

Chris Hipkins: I raise a point of order, Mr Speaker. I waited until the end of that question exchange because I did not want to interrupt the flow of the questioning, but while you were on your feet earlier on, chastising a member to your left for interrupting while you were on your feet, a member on your right did exactly that, to which you, I think, indicated some appreciation by laughing. I just want to get some reassurance from you that members on the left and the right will be equally chastised when they engage in that kind of behaviour.

Mr SPEAKER: I certainly did not appreciate the interjection that was thrown. It should not have happened. At the time, I was on my feet dealing with another matter, and there was a very large bulk of interjection coming. There was a quip that some people found amusing. It was unhelpful and should not have occurred, particularly whilst I was on my feet.

Economy—Employment

2. KANWALJIT SINGH BAKSHI (National) to the Minister of Finance: Does he agree with the Prime Minister’s statement that “building a strong economy that … creates more jobs will remain front and centre of the Government’s agenda”?

Hon BILL ENGLISH (Minister of Finance): Yes. Under the Government’s economic management we have seen higher incomes and more jobs for New Zealand families. In the last 3 years there have been 175,000 more jobs, and forecasts of slightly less than that number over the next 3 years, and unemployment is currently at 5.3 percent, having been quite a bit higher. Average annual wages have now reached $58,000, around $11,000 higher than in 2008.

Kanwaljit Singh Bakshi: What is the Government’s approach to supporting more jobs and higher wages for New Zealand families?

Hon BILL ENGLISH: We focus on working with businesses and with employees to ensure that there is an economic framework that encourages businesses to invest another dollar and employ another person, because that is at the heart of growth. I have to say that we are not sitting around planning for the mass loss of jobs, because we believe that businesses with confidence in an economy will shift their investment in a way that ensures that there continues to be more jobs created for people, despite the fact that some will be lost in some industries.

Kanwaljit Singh Bakshi: What specific steps is the Government taking to support employment through skills and trade policy?

Hon BILL ENGLISH: As a direct link between trade policy and job creation, we could end up with fewer new jobs if there were no new free-trade agreements such as the Trans-Pacific Partnership, which means better access to 800 million customers, which accounts for 36 percent of global GDP. We are also supporting employment for a range of initiatives that allow particularly young New Zealanders to find a pathway between secondary school and the world of work, Māori and Pasifika trades training, ICT graduate schools, trades academies, increased access to workplace literacy and numeracy, and working towards ensuring that all young people, regardless of where they start, can find themselves on a pathway to employment.

Kanwaljit Singh Bakshi: What support does the Government give to those New Zealanders who are looking for jobs but who are currently unemployed?

Hon BILL ENGLISH: The Government provides an effective minimum income for New Zealanders, particularly those who are currently without work, and on 1 April this year benefit rates for families with children will rise by $25 a week after tax. So the minimum income for those people without work and with children will rise by $25 a week, just next week. Around 110,000 families, with 190,000 children, will be better off. We are also very focused on training to support people moving from benefits into work. All the evidence is that where there are clear pathways and strong incentives people find work. In fact, we are not facing a situation where, because jobs are disappearing, we have large numbers of people on the unemployment benefit.

State-owned Enterprises—New Zealand Post

3. METIRIA TUREI (Co-Leader—Green) to the Minister of Finance: Ka tū a ia i runga i te mana o tana tauākī e mea ana, “New Zealand Post is Government-owned and we’re going to be keeping it,” ā, mehemea ka pērā a ia, ka pēhea tētahi paku whakawehenga nei? [Does he stand by his statement that “New Zealand Post is Government-owned and we are going to be keeping it”; if so, will he also rule out partial privatisation?]

Hon BILL ENGLISH (Minister of Finance): Yes; and yes.

Metiria Turei: Has he asked Treasury to work on any options or costings for the full or partial privatisation of either New Zealand Post or Kiwibank?

Hon BILL ENGLISH: No.

Metiria Turei: Has he discussed at any time with the board of New Zealand Post that privatisation or partial privatisation could be an option; and if so, when did he do that?

Hon BILL ENGLISH: No.

Metiria Turei: Can he guarantee Kiwibank customers that their bank will remain 100 percent New Zealand owned?

Hon BILL ENGLISH: Yes.

Metiria Turei: What is he doing—[Interruption]

Mr SPEAKER: Order! Start the question again.

Metiria Turei: Sorry, there is just so much chatter from the back end of the room.

Mr SPEAKER: Order! Just—[Interruption] Order! There is a considerable volume of interjection coming from the right. The member is right to point that out. It must cease.

Metiria Turei: Can the Minister guarantee those who use New Zealand Post that the current level of service that they receive will continue?

Hon BILL ENGLISH: I think the member asked whether we could guarantee the continuation of existing services with New Zealand Post, and the answer is there is no guarantee of continuing existing services. Recent changes in post discussed in the last few days are part of a plan outlined in 2013, which New Zealand Post is executing to deal with the reality that fewer and fewer people want to use its service and, therefore, it needs to adapt the way it is organised, and maybe diversify into other services.

Metiria Turei: What is the Minister doing to ensure that New Zealand Post is able to retain its essential services, like rural post?

Hon BILL ENGLISH: The Greens could contribute by stopping using email and using envelopes. Post has had a bit of a boost recently from the flag referendum, actually, with many millions of dollars’ worth of business directed to them by the Government. The rural post is governed to some extent by the relevant agreements with New Zealand Post, and we have had no intention to change those in the short term.

David Seymour: Can the Minister reassure taxpayers that they are not about to take a Solid Energy style haircut in respect of New Zealand Post?

Hon BILL ENGLISH: There may be a limited appetite for that style of haircut, but for the Solid Energy style of haircut—look, it is tricky. It is quite a challenge for New Zealand Post, and the Government as its owner on behalf of taxpayers, to retain ownership of it at the same time as we are seeing the business declining rapidly. There is no doubt New Zealand Post is worth a lot less than it was a few years ago, and that is by political consent of its owners; that is, its owners want to retain ownership. They do not want to see other people involved in its ownership, and seem happy to accept that the business will continue to decline, and, therefore, the value of New Zealand Post will continue to decline and taxpayers’ value is being lost every week.

David Seymour: Is any amount of loss to the taxpayer unacceptable when it comes to retaining New Zealand Post?

Hon BILL ENGLISH: I am speaking here about loss of value. In terms of profit and loss accounts, New Zealand Post is just holding its own. I suppose the answer to that question is that the Government’s clear and firm policy is to retain 100 percent ownership of New Zealand Post.

Tertiary Education—Reports

4. SARAH DOWIE (National—Invercargill) to the Minister for Tertiary Education, Skills and Employment: What recent reports has he received on the benefits to students of tertiary education?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): Today the Ministry of Education released a series of fact sheets that show the earnings and employability for graduates after study across a range of disciplines. This is based on actual tax return data, and the release shows those with a Bachelor’s degree earn, on average, around 40 percent more than the national median earnings after 5 years in the workforce, while those with postgraduate qualifications earn even more. It also shows the benefits of study continue to increase over time. The data complements the release by Universities New Zealand last month that showed a typical graduate earning around $1.6 million more over their working life than a non-graduate. Overall, the release provides useful information for students considering their future study options.

Sarah Dowie: Which qualifications provided the highest earnings after study?

Hon STEVEN JOYCE: The highest-earning qualifications include the health-related fields, plus engineering and information technology. They also demonstrate the value of students studying science, technology, engineering, and mathematics subjects. In particular, after 5 years those with a Bachelor’s degree in medical studies earn, on average, 201 percent more than the national median earnings. Those with a Bachelor’s degree in banking, finance, or law earn around 65 percent more, and for sales and marketing it was 47 percent above average. Those with qualifications at honours, postgraduate certificate, and diploma level have even higher premiums. Graduates with a qualification in accountancy had earnings 100 percent above the national median earnings. Graduates in civil engineering had earnings 91 percent higher, and graduates in mechanical and industrial engineering 83 percent higher. There were a few subjects where earnings were lower than the median wage, those subject choices including the performing arts, where graduates earned on average 20 percent less than the median wage, and visual arts and crafts, which was 5 percent less.

Sarah Dowie: Has he seen any reports on approaches that may impact the benefits to students from tertiary study?

Hon STEVEN JOYCE: Yes. I have seen a number of approaches promoted by a number of international commentators of more of a left persuasion in the last week or two that would see all graduates, no matter how much they get paid, being paid an additional $11,000 or $22,000, or thereabouts, by the Government—where they earn even 100 percent more than the median income, for example. They would then be taxed, though, by as much as 50 to 80 percent of their actual income. These two changes could have the effect only of discouraging people from training in occupations that our country needs. Jobs like engineering, science, and software development, which are very important for New Zealand’s future, would be discouraged on such an approach.

Chris Hipkins: If the National Government has finally woken up to the value of post-school education, and no longer thinks it is worthless, as the Minister tried to claim earlier in the year, what is he going to do to reverse the forecast 10,000 student loss that is going to happen over the next 3 years?

Hon STEVEN JOYCE: Firstly, the member is incorrect and is guilty of reading his Twitter backwards, which is quite hard to do, because it is quite short—

Dr David Clark: Ha, ha!

Hon Member: Slowest MP in 50 years.

Hon STEVEN JOYCE: The worst Opposition MP in 50 years—took him a while to catch up with that one. Thank you for arriving, Dr Clark. The important thing, actually, is that this Government is promoting tertiary education. It is promoting science, technology, engineering, and mathematics subjects. It has initiatives like Curious Minds—

Chris Hipkins: 10,000 fewer students.

Hon STEVEN JOYCE: —and Futureintech to encourage it. For Mr Hipkins’ benefit, if there is a projected decline in students, and there is, it is because of a demographic bubble of 18 years ago that has moved past. If Mr Hipkins would like to go back and encourage his mum’s friends—

Mr SPEAKER: Order! [Interruption] Order! I think the question has had the answer that it deserves.

Economic Growth—Income Levels

5. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Is ASB economist Kim Mundy correct when she said last week, “While headline growth appears reasonable and encouraging, underlying per capita income growth remains flat and highlights New Zealand’s economic vulnerabilities going forward”?

Hon BILL ENGLISH (Minister of Finance): No, I disagree with the ASB economist. New Zealand—with the exception of, I think, one quarter, subject to revision—has had a long period of consistent GDP growth, which has delivered income increases of 2 to 3 percent to households at a time when inflation is low. Job growth has been pretty strong. Whatever other measures the member may want to apply, that actually shows that the economy is on a sustainable track of moderate growth.

Grant Robertson: What has been the percentage of per capita GDP growth in the last year, based on the Statistics New Zealand figures released last week?

Hon BILL ENGLISH: I cannot tell the member that. What I can point him to are the forecasts by ASB economist Kim Mundy, which show per capita GDP is to go to an annual growth of 2 percent over the next 2 years. That looks pretty robust, particularly when you have got a fast-growing population

Grant Robertson: Could the failure of the Government to lift exports as a percentage of GDP and the fact that it is nowhere near its own target of 40 percent of GDP be one of the economic vulnerabilities Ms Mundy is talking about?

Hon BILL ENGLISH: No. In fact, recent performance in the export sector shows exactly why the New Zealand economy is less vulnerable than that member wants it to be. In a year when dairy exports dropped, I think, $3 billion, total exports actually went up by $5 billion—

Hon Steven Joyce: $2 billion.

Hon BILL ENGLISH: —sorry, $2 billion—which shows that the rest of the export sector is surprisingly strong. It is not correct, as that member has said, that New Zealand is far too reliant on dairy.

Grant Robertson: When independent commentators are calling per-person growth “sluggish” and “feeble”, does he not think that he should pay a little bit more attention to that instead of giving patronising answers?

Hon BILL ENGLISH: I thought they were referring to the Opposition spokesman on finance, but there you go.

Grant Robertson: Is “importing growth, rather than creating it”, as the Manufacturers and Exporters Association put it last week, one of the economic vulnerabilities facing New Zealand?

Hon BILL ENGLISH: No, and I do not know quite what it means. I mean, the fact is that a small, open economy like this has to be part of global supply chains, whether it is goods or services or, in fact, people, as illustrated by the pretty strong migration at the moment. We need to be more integrated with the world, so importing what we need to add value and, therefore, grow would seem to be a perfectly legitimate way of growing, as much as the bright idea that comes out of some young person who is setting out with a start-up that does not import anything. Both are legitimate sources of growth.

Grant Robertson: At what point is the Minister going to wake up from his 8-year slumber and work out that the economy has not diversified sufficiently, that we are still reliant on dairy prices, and that we actually have not got an economy growing per person, based on productivity?

Hon BILL ENGLISH: The economy has had, relative to others, a dream run, and in that sense we would be happy for that to continue. The member seems to be trying to make a point about a low per capita number from a year when dairy incomes slumped dramatically and we had record high migration. Of course in that circumstance, for 1 year, per capita growth would be a bit lower, but as the economist he quotes has set out in the ASB graph, per capita incomes are likely to return to annual growth of 2 percent over the next 2 years.

Workplace Health and Safety—Legislative Change

6. Dr JIAN YANG (National) to the Minister for Workplace Relations and Safety: What reports has he received on reactions to the upcoming health and safety legislation changes?

Hon MICHAEL WOODHOUSE (Minister for Workplace Relations and Safety): The new health and safety law coming into force next Monday emphasises that everyone in the workplace is responsible for health and safety, because all workers deserve to go home safely every day. Unfortunately, I have received reports that kids should be banned from climbing trees at school because of this new law. This is patently ludicrous and incorrect. All playground and outdoor education activities possible today will still be possible next week—nothing changes. It is disappointing to see that that sort of fearmongering is being generated about the changes.

Dr Jian Yang: Should sports clubs and volunteer organisations be worried about the upcoming changes?

Hon MICHAEL WOODHOUSE: In a word, no. Another myth being perpetuated is that sports clubs, voluntary associations, and the like will be wrapped in red tape, resulting in people withdrawing from volunteering or from holding sports events. Again, this is nonsense. The Act adopts exactly the same legal framework that exists in the current law. The Government was clear that the current framework for voluntary associations and sports clubs was managing risk adequately, and transferred it into the new regime. Business should be alert to the new law when it comes into effect, but there is no need for the overreaction on things like tree climbing.

Housing—Housing Developments on Crown Land

7. PHIL TWYFORD (Labour—Te Atatū) to the Minister for Building and Housing: How many houses have been completed as a result of the $52.2 million Crown land policy he announced in Budget 2015?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Minister for Building and Housing: Land purchase agreements have been finalised for eight parcels of land and negotiations are under way for a further 27 parcels. Over the next month we expect to make announcements on development agreements for these sites, which could provide around a thousand homes. In Budget 2015 we said that the first homes would take at least 18 months to get under way and, less than a year later, it is not surprising that none have actually been completed, but they are on track.

Phil Twyford: Why did he claim in the House yesterday that developments at Weymouth and Hobsonville were completed under the programme when they were both begun before he had even announced it, or is he now claiming credit for every random house built in Auckland to make it look like his failed scheme is actually working?

Hon BILL ENGLISH: Well, of course, Weymouth is one that the Minister was heavily involved with, and it seems to have made—by any standard—remarkable progress, but I would have to say that in the first 12 months it did not succeed in getting houses built. You do have to follow the process. For instance, iwi have rights under the Treaty settlements related to this land, and those rights have to be respected. That takes time.

Phil Twyford: How does he expect his Crown land scheme to make a significant difference to Auckland housing supply when it has taken so long to get off the ground and looks like it will be less than one-third of the 500 hectares that he and the Prime Minister promised, or has he identified more cemeteries and power substations to build on?

Mr SPEAKER: The Hon Bill English—either of those two questions.

Hon BILL ENGLISH: It will certainly help, in the context of what I think is a record for building consents from the data that has been published in the last few days. It will have the same sort of impact as similar schemes had in Christchurch. The member should feel free to look at the Crown land programme in Christchurch, because in relatively short order—about 18 months—it is now starting to produce a larger number of reasonably priced homes that middle-income families can afford.

Phil Twyford: Whydoes he trumpet today’s consent figures as some kind of success, when the 12-month rate of 9,500 will not even house the new migrants who have settled in Auckland over that period, let alone the 13,000 new dwellings a year that Auckland needs or the 40,000 shortfall that has built up under his watch?

Hon BILL ENGLISH: The Auckland City Council can always do more. It can always become faster at issuing consents on subdivisions. It can always become a lot faster at issuing its building consents, sorting out its issues with Watercare Services, and ensuring that communities are properly consulted. It has got quite a bit faster, but it has got some way to go yet.

Phil Twyford: How can he try to spin an annual consent rate of 9,500 in Auckland as a success, when his own housing accord sets the target for this year at 17,000 new dwellings, so he is missing his own target by 7,500 new homes?

Hon BILL ENGLISH: The member, despite being an Auckland member, does not seem to understand that the Auckland City Council makes those decisions. The Minister is not the consenting authority. The Auckland City Council is the one that has to sign off every single thing, from the pavement to the height of the chimney, and the faster it can do that, the better. I share the member’s concerns, and I have had the chance to share them with the Auckland City Council, that if it can go faster, it would be better, but it is going faster than it ever has in the last 10 years.

Question No. 8 to Minister

RON MARK (Deputy Leader—NZ First): My question is to the Prime Minister and asks: “Does he stand by his statement, ‘We welcome migrants who can make a contribution to New Zealand.’?”

Hon MICHAEL WOODHOUSE (Minister of Immigration): The question is to the Minister of Immigration.

Mr SPEAKER: I am sorry. I did not hear. I suspect it was not—I am going to ask the member to read the question again, please.

RON MARK (Deputy Leader—NZ First): It is listed. It was actually lodged to the Minister of Immigration but it is listed to the Prime Minister, for some reason. It is listed to the Prime Minister—

Mr SPEAKER: My understanding was it was transferred, and legitimately so, to the Minister of Immigration. If the member would ask the question to the Minister of Immigration, and then we will proceed.

RON MARK (Deputy Leader—NZ First): I raise a point of order, Mr Speaker. The question for oral answer, listed here, says “Ron Mark to the Prime Minister”.

Mr SPEAKER: My understanding is that will be incorrect. It was originally set down, at 10.30, and then transferred by the Government to the Minister of Immigration, and for the person to proceed I am asking the member now to ask it in that fashion.

CHRIS HIPKINS (Senior Whip—Labour): I raise a point of order, Mr Speaker. I think it is important we get to the bottom of the matter. I am not familiar with the background, but if the member lodged this question to the Prime Minister and the Government then subsequently decided to transfer it, it needs to be reflected in the Order Paper that it has been transferred and the member needs to be informed. He cannot be expected to ask a question to some other Minister if he has not been informed of the transfer. The Order Paper that we have all been given, the yellow sheet, says that it is to the Prime Minister and therefore it should be put to the Prime Minister.

Mr SPEAKER: I am afraid that is not right, and if the member looks at Speaker’s ruling 169/2 the question can actually be transferred at any time, right up to being asked. What I think has happened, and I will check it out subsequently, is that the mistake has been made in the presentation of that Order Paper. I was advised when I met with the Clerk at 11.30 that the question had been transferred and that the transfer had been accepted by New Zealand First. So the way forward is that I am going to ask the member to ask the question as I understand it, to the Minister of Immigration. I will, for the sake of Mr Hipkins, check later as to how this mistake may have happened.

Prime Minister—Immigration

8. RON MARK (Deputy Leader—NZ First) to the Minister of Immigration: Does he stand by the Prime Minister’s statement, “We welcome migrants who can make a contribution to New Zealand”?

Hon MICHAEL WOODHOUSE (Minister of Immigration): Yes, I stand by the full statement of that speech, which was “We welcome migrants who can make a contribution to New Zealand, and we value the benefit and opportunities that free trade agreements can deliver. … I back our farmers, our manufacturers, our ICT companies and in fact all our exporters to succeed. Our view of New Zealand is a positive, confident country that is well connected with the rest of the world, including our neighbours in the Asia Pacific region.”

Ron Mark: How can he stand by such a statement when Ministry of Business, Innovation and Employment briefing documents raise concerns about the number of low-skilled migrant workers at a time when there are more and more unskilled foreign students working here?

Hon MICHAEL WOODHOUSE: Well, the international education industry is now our second-largest service export earner. It generates about $3 billion, I think, and employs nearly 30,000 people directly or indirectly. One of the attractions to that is the fact that the students themselves can work for a small amount of time while they study. It is a very good marketing tool. Only about one in four takes it up but I think it is an excellent strategy.

Ron Mark: How does he think it is fair or even sensible that almost 67,000 foreign students with no work skills are allowed to work in this country while over 70,000 young Kiwis cannot get a job?

Hon MICHAEL WOODHOUSE: Well, I do not accept that international students have no work skills, any more than domestic students have no work skills. All students from time to time work part-time to augment their income in hospitality, in tourism industries, in horticulture, and so on. As far as young unemployed New Zealanders are concerned there are definitely challenges in getting them into work, but the Minister for Social Development, the Minister for Tertiary Education, Skills, and Employment, and I are working together to ensure that Kiwis are at the front of the queue and that immigration policy is at the end of the pipeline.

Ron Mark: Does he agree with the Minister of Finance that “the inflow of migrants is driven by students,” and he goes on to say “that requires high levels of skill to grow”; if so, how does he reconcile that statement with the fact that the majority of international students are not actually in universities but in polytechnics?

Hon MICHAEL WOODHOUSE: I have not seen the quote the member is referring to but what I do know is that the migration trend is driven by international students, it is driven by working holidaymakers, it is driven by skilled workers we need to help things like the rebuild of Canterbury, and it is driven by our Recognised Seasonal Employer scheme policies, which are helping with the harvest in one of the fastest-growing industries in this country. It is a demand-driven immigration policy and higher migration is a sign of success not failure.

Ron Mark: Why, when Treasury—Treasury—and the Ministry of Business, Innovation and Employment are concerned, and are expressing that concern in written reports, about the number of low-skilled migrants and when the OECD has described the inflow as “unmanaged”, will this Government not change its policy settings on migration?

Hon MICHAEL WOODHOUSE: To the second part of the question, the answer is no. I believe that we have the policy settings right to respond to demand in a growing economy. As far as the lower-skilled worker trend is concerned, there is a very high labour need in many of those industries and if that member wants to go into the Western Bay of Plenty, into Nelson-Marlborough, into those places and say they would stop migration—[Interruption]

Mr SPEAKER: Order! There is just no point in carrying on with an answer when the member does not want to listen to the answer.

Drugs, Illegal—Legislation

9. KEVIN HAGUE (Green) to the Associate Minister of Health: What steps will he be taking to ensure New Zealand drug laws are still fit for purpose given the recent findings by Johns Hopkins University and British medical journal The Lancet that the punitive approach to drug offending has done more harm than good?

Hon PETER DUNNE (Associate Minister of Health): In August last year, as the member I think will be aware, I published a new National Drug Policy. This contains 28 wide-ranging actions over the period from 2015 to 2020 that take a compassionate, proportionate, and innovative approach to addressing drug harm. I believe that this policy, like the attitudes being expressed in a number of countries around the world, reflect the view that the harm from illicit drug use is best addressed primarily through a health lens. This does not mean there is not still a role for law enforcement, but it should not be the primary approach, and the Government’s actions contained in the National Drug Policy reflect that position.

Kevin Hague: Does the Minister agree that the primary goal of the drug policy should be the reduction of health-related harm and that the regulatory response to particular drugs should be proportional to their risk of such harm?

Hon PETER DUNNE: Yes, I do. In fact, when I spoke to the United Nations Commission on Narcotic Drugs in Vienna last year I stated that in the New Zealand national statement the central pillars of a drug policy should be about proportion, innovation, and compassion. I believe we are generally achieving those goals in New Zealand, but, obviously, there is more to do, and I look forward to reviewing the National Drug Policy at its mid-point sometime next year.

Kevin Hague: What prospects for change does the Minister envisage at the upcoming United Nations General Assembly special session in New York on the world’s drug problem?

Hon PETER DUNNE: Having attended the United Nations convention meetings for a number of years now, it has been noticeable that there has been a perceptible shift in international attitudes from what one could describe 5 or 6 years ago as, essentially, a legalistic punitive approach to a much greater emphasis on public health issues being a driving force today. I also want to make one other point, which New Zealand has raised strongly over the years, and that is the use of the death penalty, particularly for drug offences. I hope that one of the outcomes of the New York meeting will be a very strong call for its abolition.

Kevin Hague: Is the Minister open to a cross-party working party of MPs from across the House to form to discuss moving drug law reform forward?

Hon PETER DUNNE: Yes, I am. I am certainly open to working with colleagues who have a range of views on the subject, and I particularly want to thank the member for the interest that he has shown and the approach that he has taken over a considerable period of time. I appreciate that.

Transport Infrastructure—Impact on Economic Growth and Job Creation

10. JONATHAN YOUNG (National—New Plymouth) to the Minister of Transport: Is the Government’s investment in transport infrastructure supporting the economy and creating jobs; if so, how?

Hon SIMON BRIDGES (Minister of Transport): Yes, it certainly is. The Government is investing billions of dollars in upgrading New Zealand’s transport infrastructure. That is because quality transport infrastructure gives businesses the confidence to invest another dollar, employ another person, and grow the economy. We have committed almost $11 billion to deliver seven roads of national significance that will move people and freight more quickly and safely. The projects are also a rich source of jobs, with Treasury estimating they will involve around 35,000 construction jobs in regions all over New Zealand. The Government is also investing strongly in accelerating a number of important regional State highway projects across the country, which Treasury estimates will create another 2,100 construction jobs.

Jonathan Young: What recent reports has he seen showing how the Government’s roads of national significance programme supports regional economic growth?

Hon SIMON BRIDGES: I have seen a recent report from the Horowhenua District Council that says that the Wellington Northern Corridor road of national significance will bring a fresh injection of economic potential and job growth to the Horowhenua district. The council says economic development in the region will receive a free hit from the project, with nearly 1,000 additional jobs over the next 20 years. The new road will support economic growth in the region and open up new business opportunities by attracting new investment into the region, and is further evidence of the Government’s commitment to build lead infrastructure to support the regions and grow our national economy.

Education, Minister—Statements

11. TRACEY MARTIN (NZ First) to the Minister of Education: Does she stand by all her statements?

Hon HEKIA PARATA (Minister of Education): Tēnā koe, Mr Speaker. Yes.

Tracey Martin: Does she stand by her statement on Newstalk ZB on 26 November 2015 that “No, I am not set on my decision. It is an interim decision”, with regard to Redcliffs School, and can she give an assurance that the final submission by Redcliffs School, due tomorrow, will be considered with an open mind?

Hon HEKIA PARATA: Yes.

Tracey Martin: Does she stand by her statements of 16 March 2016 endorsing the Intensive Wraparound Service as a lifesaver for special needs students, when only 28 of the 335 students supported by the Intensive Wraparound Service were included in the last Ministry of Education review, and of those, only 10 are predicted to have sufficient resources available to ensure they can stay in school?

Hon HEKIA PARATA: Yes, I stand by the statement I actually made, which was in reference to the report of the New Zealand Council for Educational Research, not the ministry’s, and I was quoting a parent who stated that she considered it a lifesaver for her child.

Tracey Martin: Does she stand by her statement on Newstalk ZB on Friday, 12 February 2016 that “the Ministry makes the decisions on whether or not statutory intervention has to occur.”?

Hon HEKIA PARATA: Yes.

Tracey Martin: I seek leave to table a document released under the Official Information Act showing Minister Parata signing off on the decision to dissolve the board and appoint the commissioner at Rangiora High School, dated 11 February 2015.

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

Tracey Martin: Does she stand by her statement on Newstalk ZB on Friday, 12 February 2016: “We don’t have anyone gagged”, with reference to Rangiora High School?

Hon HEKIA PARATA: I will have to take the member at her word that she has scrutinised these transcripts, but that would be true, yes.

Tracey Martin: I seek leave to table a letter from the commissioner of Rangiora High School dated 12 February 2015 to the then principal Peggy Burrows, effectively gagging her.

Mr SPEAKER: Order! The last part—[Interruption] Order! I would have put the leave until the last part was added; it was totally unnecessary. That is an interpretation—[Interruption] Order! That is an interpretation by the member, which was not necessary.

Chris Hipkins: Does she stand by all of her statements regarding the sufficiency of National Certificate of Educational Achievement (NCEA) literacy requirements, given that the New Zealand Qualifications Authority is currently proposing that eight credits of the 10 literacy credits required for NCEA level 2 could be met by getting a driver’s licence?

Hon HEKIA PARATA: I do, and to be clear about those eight credits, two are at NCEA level 1, for the written test, four are at NCEA level 2, for the restricted, and two are at NCEA level 2 for a full licence. They are based on literacy requirements relevant to each of those stages of the driver’s licence.

Chris Hipkins: Can she confirm that the only literacy requirement for all three levels of a driver’s licence is a 35-question, picture-based, multi-choice test; if so, how can she possibly claim that completing that test demonstrates almost all of the literacy skills required for further study or the workplace?

Hon HEKIA PARATA: No to the first part of the question, but can I say that the member’s unhappiness that this Government is actually doing stuff that his party has promised but never delivered is driving his angst.

Police—Funding

12. STUART NASH (Labour—Napier) to the Minister of Police: Does she believe the Police have sufficient funding to meet their operational objectives?

Hon JUDITH COLLINS (Minister of Police): Yes.

Stuart Nash: Why has she closed 30 police stations over the past 4 years, and does this not show that she is more concerned with saving money than with catching criminals?

Hon JUDITH COLLINS: I may be many things but I do not have the ability to close police stations all by myself.

Stuart Nash: Why has she overseen the cut of over 500 general duties constables since 2009, and does this not just show she is more concerned about saving money than solving crime?

Hon JUDITH COLLINS: The member may well be aware—and I know he is—that the general duties constables have actually been redeployed into other areas more specific to what the needs are, such as neighbourhood policing teams, which are very front line—they are just not called “general”.

Stuart Nash: Does she agree with the police’s own assessment that her cost-cutting drive has “resulted in instances of highly trained, well-paid police constabulary employees taking up middle and back-office roles”, and does this not mean good cops are now just filling out forms rather than catching criminals?

Hon JUDITH COLLINS: No.

Stuart Nash: Is it not the case that all these cuts and closures are just a way of making police claw back the $300 million in operational cost pressures that her Government has made them observe?

Hon JUDITH COLLINS: I do not know where that member has been for the last 7 years, but I can tell him that there has been a $200 million increase in the police budget since 2009. Police numbers have increased by 600 since this Government came to office, which shows what a sorry state of affairs it was when we took over.

Stuart Nash: I would like to table the briefing to the incoming Minister, which shows that the police have had to claw back $300 million in cost pressures—

Mr SPEAKER: Order! I just need to check. I would have thought that briefing to the incoming Minister was available on the internet to all members. I am sure it is.

ENDS

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