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Parliament: Questions and Answers - October 16

ORAL QUESTIONS

QUESTIONS TO MINISTERS

Question No. 1—Prime Minister

1. Hon SIMON BRIDGES (Leader of the Opposition) to the Prime Minister: Does she stand by all her Government's statements and actions?

Rt Hon JACINDA ARDERN (Prime Minister): Faakalofa lahi atu, Mr Speaker. Happy Niuean Language Week, and to answer Mr Bridges' question, yes.

Hon Simon Bridges: Does she stand by her statement last week that, since October 2017, "petrol prices have risen roughly 39c, of which 6.8c at that point could be attributed to taxes and levies;"?

Rt Hon JACINDA ARDERN: The member will be referring to my press conference, the first time I made that comment. I stated "between 27 October 2017 and 28 September 2018—this is where we have data—petrol prices have risen roughly 39c, of which 6.8c at that point could be attributed to taxes and levies;", so I absolutely stand by that statement.

Hon Simon Bridges: Is she aware that the tax figure she referenced—6.8c of the 39c increase since last October—is only the GST and emissions trading scheme component and did not include the new excise tax or the regional fuel tax in Auckland?

Rt Hon JACINDA ARDERN: Yes, which is why I indicated the data was through to 28 September, because that is the data I had available, and I was very explicit about that. What it would be nice to have the member opposite being explicit about is what transport projects he intends on cancelling, given he doesn't want excise to exist in New Zealand any more—or he might not be in the position to have to cancel anything because it requires being in Government.

Hon Simon Bridges: Did she not include all of the relevant taxes and, in so doing, underrepresent the actual tax increase, given the Government has imposed a regional fuel tax of 11.5c and an excise tax of 4c a litre?

Rt Hon JACINDA ARDERN: Again, I gave the data that was available at the exact time that I stood up at the press conference. I can give the member the exact data today, which includes that fuel prices have risen now 46c, of which tax is 9.53c. The fact remains, there is an exceptional increase in fuel prices that cannot be reasonably explained, which is why this Government is changing the law so we can seek out some answers on behalf of consumers. Either that side thinks it's acceptable that they're paying that much or they don't.

Rt Hon Winston Peters: Is it a fact that on the weekend—that's yesterday— Shamubeel Eaqub had that same precise calculation in two papers?

Rt Hon JACINDA ARDERN: Yes, because he would have been relying on the Ministry of Business, Innovation and Employment (MBIE) data as well, which is what I have provided in public and, again, to this House.

Hon Simon Bridges: Does she now accept that her petrol taxes have had a significant impact on the cost of living of New Zealanders?

Rt Hon JACINDA ARDERN: I've been very open about the proportion that has been around excise and regional fuel tax—

Hon Dr Nick Smith: You haven't been open.

SPEAKER: Order!

Rt Hon JACINDA ARDERN: —versus what cannot be explained. Now, this seems to be in direct contradiction to when that member was in Government. They undertook their own review and came out with a finding that said they could not reasonably determine whether or not consumers were paying a fair price. That's not good enough on this side of the House, and we're doing something about it.

Rt Hon Winston Peters: If petrol prices are so high, how could an individual afford to drive all the way from Auckland to Wellington just to deliver a message inside this building this morning?

Rt Hon JACINDA ARDERN: Mr Speaker—

SPEAKER: Order! The member has no responsibility for that.

Hon Simon Bridges: Does she now accept that her petrol taxes have had a significant impact on the cost of living for New Zealanders?

Rt Hon JACINDA ARDERN: I accept that fuel prices, at the moment, have had an element we cannot explain in the last 10 years. The importer margin has gone up. The importer margin has gone up and, clearly, that side of the House will not accept that excise and the regional fuel tax is only a small portion of what consumers are paying at the pump. I have to say, given that side of the House increased it by 17c, its now crying wolf over excise use seems pretty rich to me. There is a problem. There is a problem, but we're trying to get to the bottom of it, because we know what excise is and the vast bulk of what consumers are paying is not about that.

Hon Simon Bridges: What will she do if it turns out that the regional fuel tax is being included in the importer margin and, therefore, is overinflating the increase of the importer margin she's referring to?

Rt Hon JACINDA ARDERN: Well, I'm not going to leave it to an "if". We're sending in the Commerce Commission to find out exactly what is going on, unlike that Government, who, when they were in office, chose to just sit by when we could not determine whether consumers were paying a fair price or not. Again, I reiterate: if that side of the House thinks it's all about excise and fuel tax, then I'd like them to tell me what they are going to cancel. Is it going to be the Penlink?

Hon Simon Bridges: So why was the regional fuel tax hidden inside the importer margin?

Rt Hon JACINDA ARDERN: Again, from the advice that I've received, there are explanations that do not exist around the inflated price that consumers are paying, which is why we're having the Commerce Commission look at it.

Hon Simon Bridges: How can New Zealanders have confidence in her ability to deal with their cost of living rises when she is relying on numbers that do not even measure the increase of her petrol taxes that, as I say, her Government has imposed?

Rt Hon JACINDA ARDERN: I'm relying on the same data that member relied on when he was in Government, and what I'm also asking questions around is why—

Hon Simon Bridges: I didn't put the taxes on.

SPEAKER: Order!

Rt Hon JACINDA ARDERN: —is MBIE automatically adding coupon and fuel card discounts to the rate of 14c to those numbers as well. But if you want to talk about the cost of living, this is a Government that put more than $5 billion back into the pockets of low and middle income New Zealanders, that increased the minimum wage, that has focused on lifting the incomes of those who need it most, and that is getting to the bottom of what's going on with fuel.

Hon Simon Bridges: If she has already decided that the fuel companies are "fleecing" consumers, why is she not doing something about that now rather than undertaking a market study?

Rt Hon JACINDA ARDERN: We are. We need the evidence before we move forward.

Hon Simon Bridges: With inflation numbers out today showing petrol prices have increased more than any other item in the last year, why is she still going ahead with more than 24c worth of petrol tax increases in the space of just three years?

Rt Hon JACINDA ARDERN: I could probably find a quote from the Opposition for exactly the same set of circumstances.

Question No. 2—Finance

2. TAMATI COFFEY (Labour—Waiariki) to the Minister of Finance: What recent reports has he seen on the New Zealand economy?

Hon Dr DAVID CLARK (Acting Minister of Finance): Fakalofa lahi atu. Last week, Treasury released the Government's financial statements for the year ended 30 June 2018, showing the Government's books are in good shape. The results show a $5.5 billion operating balance before gains and losses surplus, $2.4 billion above Treasury's Budget 2018 forecast—yes, it was $5.5 billion—and net core Crown debt at 19.9 percent, compared to the 20.8 percent forecast at Budget time. The financial statements are the first official check-in on the Government's commitment to run surpluses, manage net debt, and keep expenses under control. We have clearly demonstrated that we are doing so.

Tamati Coffey: What factors contributed to this strong result?

Hon Dr DAVID CLARK: A variety of factors contributed to this result being ahead of Budget 2018 expectations. A number of one-offs led to core Crown expenses coming in 1.4 percent below forecasts, which Treasury says was largely due to timing issues. Much of this variance is set to reverse out in the 2018-19 accounts. A strong economy contributed to core Crown tax revenue coming in 0.9 percent higher than expected in the year to 30 June 2018. Corporate tax revenue was up due to profits for both large and small businesses being higher than Treasury had forecast at Budget 2018. This result indicates the continued strength of New Zealand's growing economy.

Tamati Coffey: What do these results mean for New Zealand's economic and fiscal resilience?

Hon Dr DAVID CLARK: These results confirm that our underlying economic fundamentals are strong and the Government's books are in good order. However, it is important that we continue to run surpluses and manage debt. Economists are pointing to rising risks in the international economy, particularly from trade protectionism and stock market movements. We need to ensure New Zealand remains well placed to withstand and respond to these external risks.

Question No. 3—Finance

3. Hon AMY ADAMS (National—Selwyn) to the Minister of Finance: Is it a goal of this Government's economic policy to make it easier for New Zealand families to get ahead?

Hon Dr DAVID CLARK (Acting Minister of Finance): Fakalofa lahi atu. Yes. This Government believes we all win when we grow our economy for the benefit of all New Zealanders.

Hon Amy Adams: With petrol prices hitting record levels, will he then reconsider the petrol excise increases and the regional fuel tax in light of comments by groups like Auckland Action Against Poverty that these taxes are taking food off the table of some of our poorest families?

Hon Dr DAVID CLARK: To make the essential transport investments that are needed in Auckland and around the rest of the country, after nine years of neglect, we will do what we need to do, and to close, of course, the Auckland Transport Alignment Project gap, which exploded under Simon Bridges' watch as the Minister of Transport. I also note that the previous Government increased petrol excise duties by 17c per litre.

Hon Amy Adams: Well, given that answer, is he aware that the previous Government actually increased fuel excise taxes, on average, less than 2c a year as well as abolishing the Auckland regional fuel tax, compared to this Government, that's increasing fuel taxes by 24c in just three years?

SPEAKER: I'll let the member answer it only on the basis that it hooks into a supplementary answer that he gave.

Hon Dr DAVID CLARK: OK. We saw petrol prices explode under that Government's watch, with excise duties up 17c per litre, and still they were behind on infrastructure funding. We are committed to getting Auckland moving, to making sure that trucks can carry goods and that people can get on public transport to get to work. We know that it costs the economy, on average—well, it's been estimated—a billion dollars a year in lost productivity because of the neglect under that Government's watch.

Hon Amy Adams: Does it help Kiwi families to get ahead to impose housing policies that the Ministry of Business, Innovation and Employment (MBIE) have told the Government are likely to raise rents?

Hon Dr DAVID CLARK: I don't have information on that in front of me—it's obviously a wee way from the primary question—but I'm happy to answer in greater detail if the member wants to put it down in writing.

Hon Amy Adams: Well, has he read MBIE advice that said the policies—

SPEAKER: Order! Order! I probably have, but you'd better ask the Minister.

Hon Amy Adams: Has the Minister read MBIE advice that said that the policies of this Government are also likely to decrease the security and affordability of gas supply and possibly electricity, and how will higher gas and electricity prices help Kiwi families get ahead?

Hon Dr DAVID CLARK: This Government is committed to moving towards a more sustainable economy that benefits all New Zealanders, and we make no apologies for that. We've also got policies that will fill skills gaps and maintain New Zealand's place in the world. We have desirable policies on this side of the House. We're out to benefit the regions and grow the economy, and we make no apology for that.

Rt Hon Jacinda Ardern: Supplementary, Mr Speaker. Has the member seen advice around what difference the healthy homes guarantee and insulating homes for families will make, abolishing letting fees will make, and increasing Working for Families, bringing in Best Start and thewinter energy payment, and lifting the minimum wage will make to low-income families?

Hon Dr DAVID CLARK: Mr Speaker, without a doubt this Government has policies that will benefit low and modest income New Zealanders and is putting them in place. We know that hundreds of thousands of New Zealand families will benefit from the Best Start package, for example, which will see those families $75 each better off when the policy is fully implemented.

Rt Hon Winston Peters: On the effect, Minister, of petrol price increases, whose calculations does he believe: those of Jami-Lee Ross or Amy Adams?

SPEAKER: Oh, no. I—.

Hon Amy Adams: So why won't the Minister just acknowledge that with new taxes pushing the cost of petrol to record levels, rising rents, and electricity price rises looming, New Zealanders are going to find it harder and harder to get ahead under this Government?

Hon Dr DAVID CLARK: Mr Speaker, inflation remains controlled and below the Reserve Bank target mid-point. Wages are rising faster than inflation, meaning that most Kiwis are seeing real-term increases in their incomes. Of course we acknowledge that too many Kiwis are doing it tough after years of neglect, but no real economic data that we've seen moves us away from our goal of delivering a productive, sustainable, and inclusive economy where all New Zealanders share in the benefits of growth. I would note that Statistics New Zealand said that on an annual basis, fruit and vegetable prices fell, meat, fish, and poultry prices fell, clothing prices fell, and household appliance prices fell.

Question No. 4—Housing and Urban Development

4. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: What advice, if any, has he received from MBIE on reforming the Residential Tenancies Act 1986?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): Thank you, Mr Speaker. Fakalofa lahi atu. I have received advice from both the Ministry of Business, Innovation and Employment (MBIE) and the new Ministry of Housing and Urban Development. The advice was primarily about how we strike a balance between providing tenants with security of tenure and allowing them to make their house a home, while protecting the rights and interests of landlords. This advice was the basis of the consultation document that we released in August this year. Our tenancy laws are antiquated and this Government is committed to modernising these laws so that every New Zealander has a warm, dry, and secure home.

Hon Judith Collins: Has he seen advice from MBIE that cumulative changes may lead landlords to sell their rental properties and leave the housing market?

Hon PHIL TWYFORD: The advice from MBIE makes it clear that the policy changes that the member is asking about should have minor effects on the housing market. Landlords, of course, will make their own commercial decisions. However, if a landlord does sell, that property will either be bought by a first-home buyer or another landlord.

Hon Judith Collins: When he announced his changes to the Residential Tenancies Act, was he aware that his officials had advised him that supply in rental accommodation would decrease and lead to increased costs for tenants?

Hon PHIL TWYFORD: I want to acknowledge that this is a time of uncertainty for landlords. We have a big reform agenda in place to make life better for renters and landlords, and we are committed to striking the right balance between a tenant's right to make a house a home while ensuring that landlords can still get rid of rogue tenants and protect their asset. The Reserve Bank research shows that rents are driven primarily by supply and demand, not landlord costs, and that's why we are firmly focused on building our way out of the national housing crisis and increasing the supply of housing, both for rentals and owner-occupiers.

SPEAKER: Before I go to Paul Eagle, I am going to ask the Minister to answer the question.

Hon PHIL TWYFORD: Mr Speaker, would you mind having the question repeated?

Hon Judith Collins: Thank you. When he announced his changes to the Residential Tenancies Act, was he aware that officials had advised him that supply in rental accommodation would decrease and lead to increased costs for tenants?

Hon PHIL TWYFORD: I was aware of advice that said that the effects of our reforms were likely to be minor, and that houses that were sold by landlords, for example, who are over-leveraged, or who owned rental properties that were in such poor condition that it would be too expensive to bring them up to the Healthy Homes guarantee standards—those homes would be sold on, either to renters or to other owner-occupiers, and that any effect on rents would be likely to be minor.

Hon Judith Collins: If, as reported by the department of building and housing, rents have increased by $25 per week since he has been the Minister, does he expect them to go up even more next year?

Hon PHIL TWYFORD: Well, MBIE data shows that average rents for new tenancies in Auckland sat at $543 a week in August, only $7 up from the same period last year, and down from $550 in June. In Wellington they were at $442 a week in August, $19 up from the same month last year, but down from a peak of $516 in February.

Paul Eagle: Fakalofa lahi atu. What response has there been to the proposed changes to the Residential Tenancies Act 1986?

Hon PHIL TWYFORD: There have been over 2,000 completed submissions, and a further 1,800 submissions are under way. I want to encourage every landlord and tenant to tell us their views on how we can strike the right balance between a tenant's right to make a house a home while ensuring that landlords can still get rid of rogue tenants and look after their asset.

Hon Judith Collins: Does he expect rentals to go up again next year?

Hon PHIL TWYFORD: Our goal—our policy goal—and my expectation is that the housing market under our policies will stabilise, both for house prices and rents. And as I said before, Reserve Bank research shows that rents are set by supply and demand, which is why we're focused on increasing the supply of housing. KiwiBuild is ramping up, and we are increasing the number of public houses through Budget 2018. In Auckland, there were 12,959 new building consents in the year to August 2018, a record for Auckland that eclipsed the last record set in 2004 under the Clark-Labour Government.

Hon Judith Collins: Does he still say that if property investors don't like the proposed changes, they should "put their money elsewhere", as reported by media last month?

Hon PHIL TWYFORD: A country needs good landlords, and it's lucky for us that most landlords are good people trying to do the right thing and provide a service. Our policy, in contrast to the party sitting opposite, is to set decent minimum standards for the 21st century that will professionalise the rental market and clean out the rogue operators at the bottom of the market who are undercutting good landlords and giving the whole industry a bad name.

Question No. 5—Education

5. JAN TINETTI (Labour) to the Minister of Education: What challenges, if any, does the Government face to ensure that there are enough teachers in classrooms next year?

Hon CHRIS HIPKINS (Minister of Education): The first challenge that we faced was a lack of reliable information on the extent of teacher shortages. On becoming Minister, I asked for a detailed model and forecast to be done and for the education sector to be consulted on that. That modelling shows that without further action we could be up to 650 primary and 200 secondary teachers short at the beginning of next year. With this information, we're now able to work with schools with much greater certainty to address the shortage that we inherited.

Jan Tinetti: What announcements has the coalition Government made that will get the additional teachers needed for next year?

Hon CHRIS HIPKINS: We have made three significant announcements since becoming the Government: the first in December, another with the Budget, and then the latest over the weekend. As a result, we have fully paid for refresher training for 1,250 teachers whose registration would otherwise have expired. We've approved nearly 200 overseas relocation grants with a lot more to come, and we have provided better support for beginning teachers so we don't continue to lose the one in five teacher graduates who have been finishing their qualifications but not making it to the classroom.

Jan Tinetti: What is the coalition Government doing to ensure a sustainable supply of teachers in the long term?

Hon CHRIS HIPKINS: The first thing we needed to do to ensure a long-term supply of teachers was ensure we had accurate forecasting and modelling. Now that we have that, the work on the longer term workforce planning is well under way, and I'm confident that that workforce strategy will ensure we have a sustainable teaching workforce and an education workforce to support them well into the future.

Question No. 6—Transport

6. Hon PAUL GOLDSMITH (National) to the Minister of Transport: How much of the increase in fuel prices since the Government took office does he attribute to taxes and levies?

Hon PHIL TWYFORD (Minister of Transport): Since the Government came to office, it's made two decisions regarding taxation on fuel. Legislation was passed allowing Auckland Council to collect a regional fuel tax of 10c a litre. This will fund projects including Mill Road, Penlink, and $550 million worth of safety improvements, at a cost of $2.60 a week to the average Auckland household. An excise increase of 3.5c a litre came into force on 1 October. This will enable the Government to make safety upgrades, invest in neglected regional roads, and tackle congestion, at a cost of 75c a week to the average household. For context, the pre-tax cost of petrol has risen by 35c in the past year, including a 9c a litre rise in importer margins.

Hon Paul Goldsmith: I raise a point of order, Mr Speaker. This was a question on notice: how much of the increase in fuel prices does he attribute to taxes and levies? He's given us two figures but he hasn't added them up and he hasn't added any GST to it. So I haven't got an actual answer to the question that I asked.

SPEAKER: Well, I think the member's skills are—he could probably add them and divide them by eight, couldn't he? Or by six or whatever one does these days?

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Questions on notice should be taken in a much more literal sense than perhaps a question that's asked as a supplementary, where a Minister might—

SPEAKER: I think the member's point is fair enough. I'm going to ask the Minister to have another go, and he can give us one of two figures: the percentage or the number.

Hon PHIL TWYFORD: Sorry, sir, could you repeat that again?

SPEAKER: I'm suggesting that the member answer the question directly. He can either give a number in cents or he can give a number in the percentage change.

Hon PHIL TWYFORD: The Government's made two decisions regarding taxation on fuel. The first is 10c a litre plus GST, an excise increase of 3.5c a litre plus GST. In comparison to that, there is a 35c increase in the pre-tax cost of petrol.

Hon Paul Goldsmith: So does he agree that the Prime Minister's summation on 8 October that taxes and levies amounted to 6.8c was wrong?

Hon PHIL TWYFORD: Well, I think the Prime Minister provided the context and should have eliminated any doubts the member had about her statement. In the press conference that the Prime Minister gave, she used figures for the share of the increase in petrol prices that had gone to central government in the year to 28 September—the latest for which data was available. This was made up of an increase in the emissions trading scheme charge and GST, both of which were set by the previous Government. Now, obviously at that point, the excise increase had not then come into effect. The regional fuel tax goes to Auckland Council, not central government, and, as the Prime Minister has said, accounting for fuel excise increases, New Zealand's taxes are the sixth lowest in the OECD, and including the regional fuel tax Auckland's are the 10th lowest. As the Prime Minister also pointed out, the lion's share of the increase in petrol prices in the last year is due to the pre-tax cost, not Government revenue measures.

Hon Paul Goldsmith: So was the Prime Minister's summation wrong?

Hon PHIL TWYFORD: The Prime Minister's summation was correct.

Hon Paul Goldsmith: So is he proud that his Government is collecting at least an extra 10c a litre outside of Auckland and more than 20c a litre in Auckland at a time when households are already under pressure?

Hon PHIL TWYFORD: I'm proud that this Government is making the investments that the country desperately needs. In Auckland, to get the city moving, we're addressing the infrastructure deficit that we inherited after nine years of neglect. We're investing in safety, more than any other Government in New Zealand history, we're building modern public transport systems, and we're investing in the rail network. This Government is making the decisions to support economic growth for this country by investing in transport infrastructure.

Hon Paul Goldsmith: So why is he not prepared to accept that the Government-legislated Auckland regional fuel tax has not added extra costs to New Zealanders and their motoring?

Hon PHIL TWYFORD: I just reject the premise of the member's question.

Hon Paul Goldsmith: Why does he not consider using other Government funds for significant transport infrastructure, as the previous Government did with the City Rail Link, rather than adding new taxes?

Hon PHIL TWYFORD: Well, I did note that the Opposition has called for an abandonment of the fuel excise and the use of one year's budget surplus. I would point out to the member that since 1927, fuel excise has been the main funding source for transport, and since the last Labour Government, it has been fully hypothecated. Every single dollar raised by the fuel excise and road-user charges goes into investment in the transport system. It has provided a stable and dependable source of funding that was utilised very effectively when Simon Bridges was the Minister of Transport. Under that party when they were in office, six excise increases—17c, excluding GST—were added.

Hon Paul Goldsmith: I raise a point of order, Mr Speaker. The Minister is giving a speech on a totally unrelated topic—[Interruption]

SPEAKER: Order! It's a point of order.

Hon Paul Goldsmith: I asked him why he did not consider using other Government funds for significant transport infrastructure, and he's talking about something that the previous Government did with its fuel excise.

SPEAKER: Well, I think the Minister was talking about precedent, and I think that's fair. Does the Minister want to continue? Is there a supplementary?

Question No. 7—Education

7. Hon NIKKI KAYE (National—Auckland Central) to the Minister of Education: Has the Government made a decision to rule out an increase in the pay offer for secondary or primary school teachers in the current collective bargaining negotiations?

Hon CHRIS HIPKINS (Minister of Education): The Ministry of Education is continuing to negotiate with the NZEI and the Post Primary Teachers Association (PPTA), and as the former Minister I'm sure is aware, it would be inappropriate to comment on the ministry's bargaining mandate.

Hon Nikki Kaye: Does he agree with the Ministry of Education's decision to refuse to provide the financial breakdown of offers, despite NZEI and PPTA asking for this information on behalf of their 40,000 teachers?

Hon CHRIS HIPKINS: I reject the assertion in the question. That information is published on the Ministry of Education's website.

Hon Nikki Kaye: Does he agree with the decision by this Government to spend $191 million of surplus funds on diplomats, such as New Zealand's embassy in Stockholm, rather than additional teacher pay?

Rt Hon Winston Peters: How narrow and stupid is that?

SPEAKER: Order! Order!

Rt Hon Winston Peters: Ridiculous.

SPEAKER: Order! Those decisions are not those for this Minister.

Jamie Strange: Does he still consider that the current offer to NZEI was a good offer, and if so, why?

Hon CHRIS HIPKINS: Yes, I do. The current offer to NZEI, the primary school teachers, would result in a $7,043 increase to the top step, which is the step that most primary school teachers are on. To put that into contrast, the last three agreements put together resulted in an increase to the top step of $6,969—less than the amount that's being offered in one agreement.

Hon Nikki Kaye: Does he accept that the additional funds through collective bargaining to resolve teacher shortages, given the Ministry of Education numbers alone indicate that over the coming years there could be a shortage of more than 4,000 teachers?

Hon CHRIS HIPKINS: The shortage that we inherited is very concerning, and it is an indictment on the track record of the previous Government that they cut funding for teacher-supply initiates, and that is the mess that we are cleaning up. With regard to the current teaching workforce, actually, retention rates are exceptionally high. The issue is that we haven't been training enough teachers because there was a 40 percent reduction in the number of teachers being trained under the previous Government.

Hon Nikki Kaye: Mr Speaker, supplementary question.

Rt Hon Winston Peters: Mr Speaker, supplementary question.

SPEAKER: Nikki Kaye.

Rt Hon Winston Peters: Call her.

Hon Nikki Kaye: With inflation out today at 1.9 percent, what does he say to the secondary school teachers who've been offered 2 percent, given $5.5 billion surpluses, and are being told by the Prime Minister, "No more cash."?

Hon CHRIS HIPKINS: Pay is not the only issue that teachers are negotiating about; they're also negotiating about working conditions. In fact, the 2 percent is only for some of the secondary teachers. There is a range of percentage increases, and the 2 percent in the middle doesn't take into account the fact that many of those teachers will move on the salary band as well.

Rt Hon Winston Peters: Supplementary question.

SPEAKER: The Rt Hon Winston Peters. I want to assure the member that he is noticeable and I do see him.

Rt Hon Winston Peters: Well, yes, but it goes that way and this way, and it goes on seniority. I don't want to push the point.

SPEAKER: No, no, no. It goes on who I call—

Rt Hon Winston Peters: No, not quite. No sir, it goes on precedent.

SPEAKER: I assure the member that standing orders and Speaker's rulings are very clear: the decision who to take for supplementaries is mine and mine alone. This time I call him.

Rt Hon Winston Peters: For a teacher to enter the teaching force in 2019, when would that teacher have had to enter the teaching training college to get skilled and qualified, and how many short were we back in 2016?

Hon CHRIS HIPKINS: There was a 40 percent reduction, over the last decade, in the number of people entering and completing initial teacher education. It is at least one year of specific teacher training to become a registered teacher. For some it is up to three years of training, depending on the qualification that they are doing.

Hon Nikki Kaye: Can he confirm he's been advised of planned rolling strikes in November for primary school teachers and the potential of other strikes for secondary early next year, and at what point will he take any responsibility for no settlement?

Hon CHRIS HIPKINS: In answer to the first part of the question: no, because the NZEI are balloting their members and they cannot notify us until the ballot has been conducted. Generally that's the way of things in a democratic system—you wait for the outcome before you notify people of the result. With regard to the secondary teachers—the secondary teachers have been very clear in their commitment to negotiating with the Government, and that industrial action would be a last resort. So with regard to accepting responsibility for the problem, I do accept responsibility for cleaning up the mess that I inherited from that Minister and her previous Government.

Question No. 8—Commerce and Consumer Affairs

8. ANAHILA KANONGATA'A-SUISUIKI (Labour) to the Minister of Commerce and Consumer Affairs: What recent announcements has he made on reforms to the Credit Contracts and Consumer Finance Act 2003?

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): Fakalofa lahi atu, Mr Speaker. Last week, the Prime Minister and I announced the Government's reforms to the Credit Contracts and Consumer Finance Act that will protect families from debt spirals; irresponsible, predatory lending; and harmful mobile-trading practices. The key changes we are making include: interest and fees caps, a fit-and-proper-person test for high-cost lenders and door-to-door salespeople, and stronger regulation of truck shops. The coalition Government is proud to be introducing measures that will halt the worst of those preying on vulnerable Kiwis, while enabling borrowing that meets their needs in a safe and affordable way.

Anahila Kanongata'a-Suisuiki: Why were these reforms needed?

Hon KRIS FAAFOI: The amendments made by the previous Government in 2015 did not go far enough to address the harm being caused to vulnerable consumers by loan sharks and truck shops. Before—and since—becoming the Government, parties of the Government had heard from people who were trapped in insidious and crippling debt about the stress this was causing families. I've heard time and time again of families getting caught in vicious debt cycles through excessive interest rates, penalties, and fees. Some lenders were charging up to 800 percent annual interest, offering loans that had clearly been unaffordable, and charging excessive penalties and fees. Our reforms will protect vulnerable communities from predatory lending practices.

Anahila Kanongata'a-Suisuiki: How will these reforms contribute to the coalition Government's long-term plan to build a modern and fairer New Zealand?

Hon KRIS FAAFOI: The Government is committed to lifting the incomes of families and reducing child poverty. Protecting families from predatory lending will prevent debt spirals. For many families, this is key to realising the Government's goals and reducing harm for those families. It is estimated that more than 200,000 borrowers use high-cost credit every year. This means too many New Zealanders are struggling to make ends meet, leading them to take out small high-interest loans that can create huge debt spirals for them and their families. These reforms sit alongside the work the Government is already doing to boost incomes through the Families Package, winter energy payment, increases to the minimum wage, extending paid parental leave, and other measures to make our country the best place to raise a child.

Question No. 9—Health

9. Hon MICHAEL WOODHOUSE (National) to the Minister of Health: Is he satisfied that the medicines funding provided for in Budget 2018 contributes to ensuring all Kiwis get world-class cancer treatment?

Hon Dr DAVID CLARK (Minister of Health): Mr Speaker, fakalofa lahi atu. Budget 2018 included a record $985 million for the combined pharmaceuticals Budget. I'm advised that, for each of the last two years, spending on cancer drugs exceeded $200 million, and that figure will continue to increase as more medicines become funded and more patients access new treatments. It is completely understandable, in my view, that people suffering from cancer want access to the latest treatments. There is rising demand for cancer medications, and there will always be pressure to fund more drugs. Decisions on which drugs to fund are, rightly, left to the experts at Pharmac. Pharmac is a world-leading funding model which allows more New Zealanders to get access to more drugs at lower costs than would otherwise be the case.

Hon Michael Woodhouse: Isn't it true that Budget 2018 provided not a single dollar of extra funding for new medicines and, indeed, was reduced by $200 million?

Hon Dr DAVID CLARK: By its very nature, the Pharmac model delivers savings. As drugs come off patent and generic options become available, money is freed up, allowing Pharmac to buy more drugs. The Pharmac savings identified in Budget 2018 will be kept within Vote Health. This will be used to deliver better health outcomes for Kiwis.

Hon Michael Woodhouse: Has he spoken with any officials about the $200 million in reprioritised funds in Budget 2018 being redirected to nurses' pay increases rather than the purchase of new medicines?

Hon Dr DAVID CLARK: There have been numerous discussions about different issues and where savings might be used. It is my understanding that the district health boards (DHBs) have the autonomy to spend that money, and they make the decision on where it goes. The issue is health funding and making sure that the money is retained within Vote Health to deliver better outcomes for New Zealanders.

Hon Michael Woodhouse: I raise a point of order, Mr Speaker. The question was very specific about whether he has had a conversation about the reprioritised funds being used for nurses' salaries specifically, and that wasn't addressed.

SPEAKER: I think, in the two parts, the Minister answered it. He said, in part one, that there'd been numerous discussions and, in part two, that the DHBs had the discretion to do it.

Hon Michael Woodhouse: Speaking to that point, there was only one part to the question—

SPEAKER: No—and two parts to the answer.

Anahila Kanongata'a-Suisuiki: Why is it important to protect the independence of Pharmac?

Hon Dr DAVID CLARK: Drug funding decisions should not be made at the whim of politicians. They need to be based on good evidence and expert clinical advice. We don't want to make drug funding decisions into a political football—for example, I agree with the commentator who responded to a question about whether it was right to override Pharmac and extend the funding of Herceptin from a nine-week programme to 52 weeks "I don't think it was actually, and I think history has shown that." The comment, of course, was made by my predecessor in the health role, National's Jonathan Coleman.

Hon Michael Woodhouse: Did he speak with any officials about the $200 million in reprioritised funds being redirected to nurses' salary increases rather than the purchase of new medicines?

Hon Dr DAVID CLARK: I don't have that detail with me today. I've certainly had conversations with people in my office, and I'd want to check whether that was an accurate representation of them. We did talk about different places the savings could be directed and where New Zealanders would see the best value in the health system from those savings.

Hon Michael Woodhouse: Is he aware of any briefings, aides-mémoire, or other documents that reference recommendations that the reprioritised funds be used for salary increases for nurses?

Hon Dr DAVID CLARK: I will have to check that because, as I say, I can recall having conversations about the savings, as I've noted in my previous answers, and I'd want to give the member an accurate response to that question.

Hon Michael Woodhouse: Will he heed the petition of Terre Nicholson supported by 36,000 other New Zealanders online for the funding of Ibrance and Kadcyla, both effective in extending the lives of women with advanced breast cancer?

Hon Dr DAVID CLARK: My understanding is that Pharmac do have a process under way to look at Ibrance and the other relevant drug the member just mentioned. They're in a process now for assessment for funding.

Question No. 10—Energy and Resources

DAVID SEYMOUR (Leader—ACT): I raise a point of order, Mr Speaker. This question was put down to the Prime Minister, who transferred it to the Minister of Energy and Resources, who appears to be unavailable—

SPEAKER: And the member knows—is the member seeking to withdraw the question?

DAVID SEYMOUR: No, I'm seeking leave to ask it of the Prime Minister in light of the Minister of Energy and Resources' absence.

SPEAKER: Previous Speakers have not allowed that leave to be sought.

10. DAVID SEYMOUR (Leader—ACT) to the Minister of Energy and Resources: What effect, if any, will Genesis Energy's plans to import coal due to a shortage of gas have on carbon emissions?

Hon DAVID PARKER (Acting Minister of Energy and Resources): It is not yet clear whether Genesis Energy will import any coal. It is acting responsibly by planning for that contingency should it be necessary. This is not caused by a shortage of gas reserves; the main driver is pipeline faults and planned maintenance. We do not expect this to have any significant long-term impact on carbon emissions. Of course, the best long-term answer to carbon emissions is more renewables.

David Seymour: Is the Minister saying that the Government is indifferent from an emissions perspective as to whether electricity is generated with coal or gas?

Hon DAVID PARKER: No.

David Seymour: Then can the Minister think of any other policies his Government has that might lead to a shortage of gas in the future and perhaps a little bit more burning of coal to generate electricity?

Hon DAVID PARKER: I would say to the member, "I can smell the carbon on your breath."

Question No. 11—Agriculture

11. GARETH HUGHES (Green) to the Minister of Agriculture: Will he ban calf roping at rodeos, in light of yesterday's National Animal Welfare Advisory Committee's report that agreed "neck pain and injury from lassoing was the key issue" with calf roping?

Hon STUART NASH (Minister of Police) on behalf of the Minister of Agriculture: Fakalofa lahi atu, Mr Speaker. On behalf of the Minister, two expert committees—the National Animal Welfare Advisory Committee (NAWC) and the National Animal Ethics Advisory Committee—were independently established under the Animal Welfare Act to provide advice on animal welfare matters. This ensures the advice the Government receives is independent, trusted, and informed by science and good practice. The National Animal Welfare Advisory Committee's rodeo report released yesterday looked into the seven rodeo events and found some areas of animal welfare that could be improved under the current regulatory system. As a result of the report, rodeo organisers with the SPCA, the New Zealand Veterinary Association, and the Ministry of Primary Industries will establish an animal welfare committee to provide better oversight of rodeos. Their work will include considering the modification of events and equipment to improve animal welfare.

Gareth Hughes: Does the Minister agree with the 2017 Labour Party position to ban flank straps and the use of calves under 12 months old at rodeos?

Hon STUART NASH: On behalf of the Minister, under this coalition Government just last month there was a change to the regulation that states that equipment such as flank straps can't cause injury. We are working with the experts to ensure that animal welfare is to the fore.

Gareth Hughes: What will the Minister do to protect calves—some as young as three months old—who are chased, lassoed, jerked off their feet violently by their necks, and wrestled to the ground, when the report says the physical pain from this persists after the event?

Hon STUART NASH: On behalf of the Minister, the independent NAWAC report calls for greater research into alternatives to mitigate risks for animals at rodeos—for example, using alternative equipment. NAWAC has asked for closer assessment of animals in the 48- to 72-hour period after rodeos, so we have a better understanding of any injuries caused. The committee established to consider these issues includes vets, animal welfare experts, and Ministry for Primary Industries (MPI). It's important that we work together to find solutions to animal welfare issues.

Gareth Hughes: On that point, with the rodeo season about to start, will he at the very least pick up the report's recommendations and regulate to ensure that less dangerous bungy cords are used on calves instead of rope lassos?

Hon STUART NASH: On behalf of the Minister, rodeos must follow the welfare code, and the Ministry for Primary Industries and SPCA inspectors monitor compliance. It is paramount that New Zealand has the highest standards of animal welfare across all areas of our economy and society. Animal cruelty is unacceptable, and those who break the rules can expect to be fined or prosecuted under the Animal Welfare Act 1999 and its regulations. As mentioned previously, the animal welfare committee will work to include the modification of events and equipment to improve animal welfare.

Gareth Hughes: Following on from the Minister's answer, is he really comfortable outsourcing animal welfare changes to the rodeos and to the cowboys association, and seeing continuing pain inflicted on animals for entertainment?

Hon STUART NASH: On behalf of the Minister, I depend on the independent scientific advice from NAWAC, and I thank them for their work. The rodeo welfare committee includes experts from vets, the SPCA, and MPI, so I'm confident it will be balanced in its work.

Question No. 12—Energy and Resources

12. JONATHAN YOUNG (National—New Plymouth) to the Minister of Energy and Resources: Has she seen reports that the wholesale price of electricity reached a peak of $192/MWh on 6 October because of low hydro levels and the continued outage of the Pohokura gas field?

Hon DAVID PARKER (Attorney-General) on behalf of the Minister of Energy and Resources: Yes. But that peak of $192/MWh is considerably lower than the peak of $9,145.57/MWh in 2014. I'm further advised that this much, much lower figure of a peak of $192/MWh is mainly to do with constraints in the gas supply system and has nothing to do with gas reserves.

Jonathan Young: How long will New Zealanders be faced with higher electricity prices because of the Pohokura field being offline and when the Kupe gas production plant goes into planned maintenance later this month?

Hon DAVID PARKER: I'm advised by officials that the problems with the pipeline are expected to be remedied within about four weeks.

Jonathan Young: So will burning coal rather than natural gas, because of gas supply restrictions, increase or decrease greenhouse gas emissions?

Hon DAVID PARKER: I suspect I could say "Rhubarb, rhubarb, rhubarb." today and it wouldn't be reported, but I know that the Speaker wouldn't approve of that and I like to take questions seriously. I've already answered that question in an earlier answer to Mr Seymour. Perhaps the member could review that answer.

Jonathan Young: I raise a point of order, Mr Speaker. I couldn't have made the question more simpler for the member to answer, and surely—

SPEAKER: "More simpler"? Try again. It's either "simpler" or "more simple".

Jonathan Young: Thank you. Will burning coal rather than natural gas, caused by gas supply shortages, increase or decrease greenhouse gas emissions?

Hon DAVID PARKER: I'm very happy to repeat the answer that I gave to Mr Seymour: it's not yet clear whether Genesis will import any coal, it's not yet clear whether it will burn any additional coal, and it's not yet clear that the gas constraints will cause that; what is clear is that New Zealand has a secure electricity system. We have—I think it's the second-highest; no, the third-highest rate of renewable electricity in the OECD. Notwithstanding that, last week, the World Energy Council ranked New Zealand eighth in the world—the only non-European country in the top ten—for energy security, energy equity, and environmental sustainability.

Jonathan Young: I raise a point of order, Mr Speaker. I cannot think of a more simpler question—a more simple question—for such a complex and long answer.

David Seymour: Speaking to the point of order—

SPEAKER: Well, there isn't one.

David Seymour: Well, on reflection, sir, he didn't answer it when I asked it, either.

SPEAKER: Well, the member is far too late, again. Is there a further supplementary?

Jonathan Young: Does she remain in disagreement with official advice that a restricted natural gas supply may result in increases in electricity prices and a greenhouse gas emission increase?

Hon DAVID PARKER: I have—I'm not sure whether it's the advantage or disadvantage of having been Minister of Energy back in 2007-08, when the member's predecessor, the Hon Gerry Brownlee, also said that more renewables and—

Jonathan Young: I raise a point of order, Mr Speaker. He's miles away from addressing the question.

SPEAKER: Order! I live in hope that he might get there.

Hon DAVID PARKER: When his predecessor also alleged that you need more thermal for security of supply. Obviously, if you burn more coal, then you have higher emissions. We don't—

Hon Members: Hooray!

Hon DAVID PARKER: Ha, ha! But, unlike the other side, we actually think the answer to that proposition is more renewables, not more thermal.

Jonathan Young: What is the Minister's plan to resolve the looming energy price increases in New Zealand now that she is about to ban new offshore exploration permits?

Hon DAVID PARKER: Again, the Opposition often cries that additional renewables would put up prices. That hasn't been the experience in New Zealand. Actually, if energy companies thought it was cheaper to build more thermal generation, they would do it. Instead, they choose to build more renewables because it's cost-competitive.

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