Questions to Ministers

Government Financial Position—Current Account Deficit

1. BRETT HUDSON (National) to the Minister of Finance: What reports has he received about progress in improving New Zealand’s external financial position—particularly in bringing down the longstanding current account deficit?

Hon BILL ENGLISH (Minister of Finance): The latest data from Statistics New Zealand shows that the current account deficit is 3.3 percent of GDP. This is quite a bit better than was expected in past Budgets. Treasury’s forecast for the current account deficit for the same period in last year’s Budget was 5 percent, and back in Budget 2012 it forecast that the current account deficit today would be 7 percent—and it is 3.3 percent. And 3.3 percent is significantly better than when we did have a 7 and 8 percent current account deficit back in 2006, 2007, and 2008.

Brett Hudson: What reports has he received on improvements in another measure of New Zealand’s external financial position—New Zealand’s net international investment position?

Hon BILL ENGLISH: The net international investment position measures New Zealand’s total level of indebtedness to the rest of the world—that is, it includes households, the private sector, and the public sector. The latest figures show that it is now 62 percent of GDP, down from 82 percent of GDP back in 2008. Of course, 62 percent is still too high; we want to see this falling further. The Government can influence it directly through its own fiscal control and indirectly through sound economic settings, and encourage investment, employment, and exports. [Interruption]

Mr SPEAKER: Order! The level of interjection—and it is from both sides of the House—is simply too loud and disruptive. [Interruption] Mr Peters, when I am on my feet I expect even very senior members to also respect that.

Brett Hudson: How is growth in the export sector supporting lower current account deficits?

Hon BILL ENGLISH: The outlook for exports is mixed. Obviously dairy prices are lower, and many farmers will be disappointed with today’s forecast payout announcement, but other sectors, including other sectors of the primary sector, are doing pretty well. We are seeing good growth in horticulture and other agricultural sectors, and that is alongside growth in tourism, manufacturing, and education. Despite the fall in dairy prices, total exports increased by over $1 billion last year. This, of course, will help our external balances.

Brett Hudson: What role do free-trade agreements like the Trans-Pacific Partnership play in boosting exports and supporting the New Zealand economy?

Hon BILL ENGLISH: If you want to improve New Zealand’s current account deficit and net international investment position, it makes sense to have a stronger export sector, and a key to a stronger export sector is free-trade agreements. The Trans-Pacific Partnership agreement gives us better access to 800 million customers in 11 countries that account for 36 percent of the global economy. We believe the benefits that have been calculated are conservative compared with other free-trade agreements where, for instance, the benefits of the New Zealand - China free-trade agreement, signed by the previous Labour Government, turned out to be significantly greater than what was calculated at the time.

Prime Minister—Statements

2. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes.

Rt Hon Winston Peters: Does he stand by his statement to the House last week that “the rail line north of Whangarei is not closing.”?

Rt Hon JOHN KEY: Yes.

Rt Hon Winston Peters: If that is the case, Prime Minister, then why did Peter Reidy, the chief executive of KiwiRail, state to the Transport and Industrial Relations Committee on 2 February this year that “Well, at this stage, there is no rail north of Whangarei,”?

Rt Hon JOHN KEY: Because, as we traversed last week, the issue is not about the rail line closing; it is about whether an operator is operating on the line.

Rt Hon Winston Peters: How can he stand by that statement when the New Zealand Transport Agency’s regional director for Auckland and Northland, Ernst Zöllner, talks of roading projects only in the far north, without any funding, and no funding for rail in the north, north of Kauri?

Rt Hon JOHN KEY: The issue is whether there are customers who want to use the rail and actually pay the commercial rates for that. Last week, actually, funnily enough, I went to a function where one of the companies that is quite heavily involved in the far north said to me that it had considered the option of rail, but it was inefficient for its business and it was sticking with trucks.

Rt Hon Winston Peters: How can he and his Minister of Transport consistently tell this House one thing in respect of, for example, the Portland line and the line north of Kauri, when the chief executive of KiwiRail and the New Zealand Transport Agency regional manager for Auckland and Northland have both confirmed, to use their own words in the parliamentary record—

Mr SPEAKER: Order! Bring the question to a conclusion.

Rt Hon Winston Peters: —for the select committee, that “there is no rail north of Kauri”?

Rt Hon JOHN KEY: Because we are correct, in the same way that that member tells his caucus he loves them and knows who they are, but could probably not answer what their names are. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! I can only think that some members to my right hand are having trouble hearing me today. If it continues, I will not hesitate to be asking Ministers to leave.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. My point of order is about the good order of Parliament. Surely the advice to the Prime Minister should be for him to apologise and withdraw those unseemly comments—or just fly a white flag when you are losing.

Mr SPEAKER: On this occasion the answer was not helpful to the order of the House, but I hardly think it was of a context or tone that requires anything to be withdrawn. I think the member often gives as good as he gets.

Ministers—Confidence

3. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he have confidence in all his Ministers?

Rt Hon JOHN KEY (Prime Minister): Yes.

Andrew Little: How can he have confidence in the Minister of Finance, who had final authority over the unaffordable fit-out of the Ministry of Health and failed even to check the ministry’s balance sheet?

Rt Hon JOHN KEY: I have tremendous confidence in the Minister of Finance. I mean, this is a Minister of Finance who has seen strong economic growth, seen the books return to surplus, and seen New Zealand growing and performing strongly on the world stage.

Andrew Little: How can he have confidence in the Minister of Health when he covered up a “serious failure of financial management within the ministry”, including keeping the Auditor-General in the dark, doing his best not to leave any paper trail, and hiding the cost from the public eye behind, now, a commercial lease?

Rt Hon JOHN KEY: I just utterly refute the assertions made by the member.

Andrew Little: What reports, if any, has he received from the State Services Commission on the cover-up in the Ministry of Health after Treasury called the commission in to investigate?

Rt Hon JOHN KEY: I utterly refute the assertion the member is making.

Andrew Little: How can he have confidence in the Minister for Economic Development, who has made such a hash of the Ministry of Business, Innovation and Employment amalgamation that his own staff have been underpaid for years?

Mr SPEAKER: Order! The question has been asked and will now be answered.

Rt Hon JOHN KEY: As I noted to the House last week, not only do I have tremendous confidence in the Minister for Economic Development I am very proud of the achievements that he has achieved. Just last week we saw the export numbers for New Zealand be positive by $1.9 billion despite the downturn in dairy. We are seeing growth for New Zealand right across the regions. I accept it has been a bit hard for some Government departments to actually follow the rules set by Labour in the Holidays Act but then, actually, members of the Labour caucus find it hard to follow the rules—

Mr SPEAKER: Order! I do not think where the answer is heading is going to help.

Andrew Little: Just what kind of shambolic Government is he running when public servants are not paid what they are owed and the Ministry of Health managed to hoodwink the entire Cabinet into believing it had $24 million that did not exist?

Rt Hon JOHN KEY: Well, 1 minute ago he was trying to say it was the Minister’s fault and now he is trying to say it is the Ministry of Health’s fault. My understanding is that the issue has been dealt with. There have been some personnel changes.

Andrew Little: With underfunding of health already running at $1.7 billion, just how is he going to pay for the latest bout of ministerial incompetence that is now costing taxpayers at least a million dollars a year extra in rack-rent for the Ministry of Health?

Rt Hon JOHN KEY: Firstly, the member is utterly wrong again about health: its funding is up over $4 billion in the time we have been in Government. But I would point out that the amount that is being paid in relation to the release at least for the fit-out of the Ministry of Health actually comes out of its departmental expenses, and has been reduced from $230 million when we first became the Government to $190 million. Personnel numbers have reduced from 1,500 people to 1,100 people so as we can see we are running the department at an annual expenditure of $40 million less.

Landcorp—Dairy Farming

4. METIRIA TUREI (Co-Leader—Green) to the Minister for State Owned Enterprises: Does he support Landcorp’s recent decision to significantly reduce its dairy footprint?

Hon TODD McCLAY (Minister for State Owned Enterprises): Yes, I welcome the business decision by Landcorp to revise its land use programme at the Wairākei estate. I would note that Landcorp’s current dairy footprint would not be reduced but that there would be a focus on alternative uses for the remaining former forestry land it leases there. In the Government’s regular meetings with Landcorp, we have asked the company to lift its financial performance and to ensure that it is profitable and productive. However, specific investment decisions are for the Landcorp board to make.

Metiria Turei: Did the Minister then make a mistake in his answer to questions last year when he told my colleague Catherine Delahunty that he stood by Landcorp’s initial plans for large-scale dairy conversions, given his Government’s plan to see the dairy industry double by 2025?

Hon TODD McCLAY: From memory, that was not exactly my answer, but I certainly stand behind Landcorp and the Landcorp board—as far as its business decisions are concerned. It was correct that about a year ago the Government asked it to look at all of its business models, including the appropriateness of investment when it came to Wairākei. I would note that it is absolutely its decision to make. I welcome this decision, just as other decisions when it comes to dealing with the financial performance of Landcorp.

Metiria Turei: Does the Minister think his Government’s strategy to intensify dairying in New Zealand is coming undone when the Government’s own dairy farmer, Landcorp, is significantly reducing its dairy footprint for economic and environmental reasons?

Hon TODD McCLAY: No, as opposed to the view of the Greens, it is not the Government’s intention to nationalise farming in New Zealand. It is the private sector that makes these decisions every day. It makes them based upon indications that come both from pricing overseas markets and from the very successful job the Government is doing in signing up and negotiating free-trade agreements. What I would say to that member, however, is that Landcorp is not significantly reducing its dairy footprint; it has merely made a business decision that there are other uses at this time for the land it has yet to convert at Wairākei.

Metiria Turei: Does the Minister disagree with Landcorp Chief Executive Officer, Steve Carden, who says he is concerned about leaving legacy environmental issues in sensitive water catchments, and will the Minister now lobby the Minister for Primary Industries to place a wider national moratorium on dairy conversions in sensitive water catchments as Landcorp Chief Executive Officer, Steve Carden, is concerned?

Hon TODD McCLAY: I have not seen those comments from the chief executive officer, but in my ongoing discussions with the chair and the board, I have indicated to them that it is the Government’s desire that they meet the rules and requirements that regional councils set when it comes to land use and, particularly, the protection of water. This Government has a better record than any other Government when it comes to these issues, and I do not need to lobby my colleague the Minister for Primary Industries. He is up and down the country on a daily basis, talking about the importance of farming and the importance of the economy.

Metiria Turei: Does the Minister then disagree with Steve Carden when he said “The days of New Zealand continuing to expand its dairy footprint are largely coming to a close.”, and how will this change the Government’s plans to double dairy production by 2025?

Hon TODD McCLAY: No, the Government—the Crown, as the owner of Landcorp—has a direct relationship with the governance there; and, of course, that is the board. Every year, we set out our obligations, our expectations, to it. As far as the chief executive officer is concerned, when he speaks, it is the same as any other farmer in New Zealand, I suppose, about their view of farming in New Zealand. Fundamentally, my view of where Landcorp sits today is that we want it to be low risk, we want it to return to profit, and we want greater dividends returned to the Crown so that we can build schools and provide hospitals and good law and order.

David Seymour: How does the Government ensure that its ownership of farms does not reduce its incentive to be a strong environmental regulator?

Hon TODD McCLAY: That is a very good question. As Minister for State Owned Enterprises, my role is to ensure that the board is focused on the outcomes that the Government wants from it, and I mentioned them earlier: to be low risk, to manage its debt well, and to return increasing dividends and profits to the Crown so that we can invest them in other areas on behalf of New Zealanders. But what I would say is that we expect Landcorp—as with all farmers—to take its environmental obligations seriously. I actually see that it does that.

Metiria Turei: Is the Minister confident that Landcorp’s change of direction away from intensive dairying will be enough to prevent it going the same way as Solid Energy?

Hon TODD McCLAY: Well, I think the member is oversimplifying what it is that Landcorp has announced. It has announced that it has found, in one particular area of the country, other land uses on top of the significant land use changes around dairy that it has made. Ultimately, it is a decision for it—a business decision—as to how it uses the land that it has under its control, and I support that.

Metiria Turei: Does he understand Landcorp’s decision as a win for our rivers and lakes and a win for our economy, and why is it that he thinks that Landcorp is willing to protect New Zealand’s rivers and lakes from dairy cow pollution but the Government is not?

Hon TODD McCLAY: No, there is just no evidence in that claim on the part of the Greens, and what I would suggest to the member is that her coming across as a supporter of farming is almost the same as her supporting, you know, a very reasonable debate in this Parliament. The thing about Landcorp is that, in our view, they are farmers. It is not for the Government to interfere in their everyday business decisions when it comes to farming. But I repeat my earlier answer: this current Government has a very strong record when it comes to environmental standards around water and the balance that we have with the farming industry.

Health Services—First Specialist Assessments

5. BARBARA KURIGER (National—Taranaki - King Country) to the Minister of Health: Can he confirm preliminary data from the National Patient Flow Project, which shows that 90 percent of patients referred by their GP to a hospital specialist between 1 July and 30 September 2015 were accepted for a First Specialist Assessment?

Hon Dr JONATHAN COLEMAN (Minister of Health): Yes. Although this is preliminary data, it indicates that of 145,922 referrals to hospital specialists during that period, 90 percent, or 130,000, received a specialist appointment. This is the first time that any Government has provided transparent data on the outcome of GP referrals to hospital specialists.

Barbara Kuriger: What reports has he had on the number of surgical and medical first specialist assessments carried out in the last 7 years?

Hon Dr JONATHAN COLEMAN: I am advised that there were 542,000 first specialist assessments performed across the country. That is 110,000, or 26 percent, more than the annual number performed in our first year in Government. The only answer to increasing demand is to do more, and this Government is.

Barbara Kuriger: What percentage of referrals are sent back to their GP?

Hon Dr JONATHAN COLEMAN: On the preliminary data 4 percent were sent back to their GP, but as the data firms up that is expected to rise to 10 percent to 15 percent. No Government in New Zealand’s history has ever been able to give every patient every appointment they want, but the focus of this Government is to continually increase access to services, and we are.

Health, Ministry—Refurbishment Costs

6. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Health: When was he informed that the Ministry of Health request for a capital injection to fund the fit out of its new headquarters was not supported by Treasury, and “exposed a serious failure of financial management within the Ministry”?

Hon Dr JONATHAN COLEMAN (Minister of Health): I was informed by the Director-General of Health in mid-February 2015. The director-general advised me that he was calling in PricewaterhouseCoopers to both give advice on resolving the funding issue and to provide independent advice on improving the ministry’s financial management. I told Mr Chuah very clearly that what had happened was unacceptable, that it would not happen again, and that the matter had to be resolved, and subsequently it has been.

Hon Annette King: In light of the exposure of serious financial management problems within the Ministry of Health under the current director-general when he was acting in the role in 2013, did the Minister raise any concerns with the State Services Commission before agreeing to the permanent appointment of the director-general in 2015; if not, why not?

Hon Dr JONATHAN COLEMAN: I think it is very unfair to go after a defenceless public servant, but what I will say is the State Services Commissioner was very happy—

Hon Annette King: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! Could the Minister please resume his seat.

Hon Annette King: You accepted the question—

Mr SPEAKER: Order! I now want to hear the answer.

Hon Annette King: Well, he was not answering it.

Mr SPEAKER: Can we now give the Minister an opportunity to answer the question.

Hon Dr JONATHAN COLEMAN: I have answered it.

Mr SPEAKER: Well, then, I did not hear the answer, o I invite the member to ask the question again.

Hon Annette King: Thank you, Mr Speaker. In light of the exposure of serious financial mismanagement in the Ministry of Health under the current director-general when he was acting in the role from 2013, did the Minister raise any concerns with the State Services Commission before agreeing to the permanent appointment of the director-general in 2015; if not, why not?

Hon Dr JONATHAN COLEMAN: I think it is pretty bad form for the member to attack a public servant when he cannot defend himself personally, but Mr Chuah was appointed because he was the very best person for the job. [Interruption]

Mr SPEAKER: Order! I will allow the member an additional supplementary question because I do not think it has been answered.

Hon Annette King: No, thank you, Mr Speaker. Why did he not make the PricewaterhouseCoopers report into the serious financial management public after it was presented in June last year, rather than wait for it to be discovered through an Official Information Act request—could the Minister please answer that question?

Hon Dr JONATHAN COLEMAN: Well, I know the member is trying to make out there is some sort of cover-up, but that is complete nonsense.

Hon Annette King: Why did he only receive verbal briefings on the issue of serious financial mismanagement from the Director-General of Health after he was informed there was a problem?

Hon Dr JONATHAN COLEMAN: I am quite satisfied with the way that this whole issue has been resolved.

Hon Annette King: I seek leave to table a letter from the Ministry of Health to our research unit, saying the Minister only received verbal briefings from the director-general on this matter.

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

Hon Annette King: What—[Interruption]

Mr SPEAKER: Order! Supplementary question, the Hon Annette King.

Hon Annette King: What—[Interruption]

Mr SPEAKER: Order! If the Hon Paula Bennett would prefer to leave question time, she is welcome; otherwise, please cooperate.

Hon Annette King: What was the cost of the PricewaterhouseCoopers report—an inquiry that the Secretary to the Treasury requested and not the Director-General of Health, even though he claimed he had asked for it on Radio New Zealand this morning?

Hon Dr JONATHAN COLEMAN: I am happy to go and find the answer to that question for you, but I have not got it on me now.

Hon Annette King: Supplementary question—this is one I asked—well, you gave me an extra, did you not, Mr Speaker?

Mr SPEAKER: I gave you one more, yes.

Hon Annette King: Where will the Ministry of Health, to quote him, “be finding that $18 million” needed to pay for the refurbishment”? Will it be coming from funding better used for health services?

Hon Dr JONATHAN COLEMAN: That is an excellent question. It is coming from the departmental expenditure. Under the Labour Government, that was $230 million. We have reduced that to $190 million. There were 1,500 people in the ministry when Annette King was running it; there are now 1,100, but we are producing better results for New Zealanders. So very good question, thank you.

Prime Minister—Statements

7. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): I feel like I have been here before, but yes.

Rt Hon Winston Peters: Does he still stand by his statement of August last year that: “New Zealand should show solidarity with the other countries that have applied sanctions on Russia because of the actions that it has undertaken.”?

Rt Hon JOHN KEY: Yes.

Rt Hon Winston Peters: Then how was it that his former Minister of Trade, Groser—now an ambassador—said about resuming trade with Russia that it was “a step in the right direction”; if not, why is he willing to allow more dairy farmers to go bust while he remains tied down by an informal, off-the-cuff golf course agreement with President Obama?

Rt Hon JOHN KEY: In the latter assertion, the member is quite wrong. But if the member cares about dairy farmers, here is a clue: vote for the Trans-Pacific Partnership (TPP). The single-biggest gainers out of the Trans-Pacific Partnership are dairy farmers. Rather than some mythical Russian who might want to buy something, I can show him 800 million consumers who definitely want to buy something.

Rt Hon Winston Peters: Seeing as he has put that into contention—with respect to, for example, Canada, Japan, the United States, and the EU, and our farmers face $38 billion of preference selling—why has he denied farmers a chance to trade with the world’s second-biggest dairy importer, Russia, considering there has been another drop in Fonterra’s milk price, disastrously, from $4.15 to $3.90, announced this morning?

Rt Hon JOHN KEY: Well, a few things. This will come as new news to the member, but Europe is not part of the TPP. The second point that might be interesting to the member is that one of the reasons that dairy prices have been falling is that the supply that used to go from Europe to Russia is not going to Russia, not just because of the sanctions but actually because they—

Rt Hon Winston Peters: That is the point.

Rt Hon JOHN KEY: Well, OK—maybe you should wander off and study a bit more economics, and work out that they have got no money to buy anything through the front door or the back door. That is the reason prices are going down. Russia is in serious financial difficulty because of oil prices.

Rt Hon Winston Peters: Why can he not understand that some of us are not interested in the fraudulent economics of Merrill Lynch, but in taking advantage of trading with Russia—the world’s second-biggest importer of dairy products—when the European Union, with whom he wants to negotiate now, has taken full advantage of our informal sanctions by increasing its milk product exports in our markets?

Rt Hon JOHN KEY: The member is quite incorrect. Secondly, as I said to him, if he wants to support those dairy farmers whom he now says he believes in, it is pretty simple. Do two things: No. 1—vote for the Trans-Pacific Partnership (TPP)—pretty straightforward; No. 2—the member earlier in the year got up and said: “I will be approaching the Government to help it support and change the Resource Management Act.” Well, I am still waiting. If the member wants to come to talk to me, he should feel free to pop up to the 9th floor of the Beehive.

Rt Hon Winston Peters: I seek leave to table a communication between the National Party and New Zealand First about the Resource Management Act offer that New Zealand First made, but it is a blank paper because it never made an offer.

Mr SPEAKER: Order! That is very difficult for me to put to the House.

Women, Minister—Cabinet

8. JAN LOGIE (Green) to the Prime Minister: Will he return the Minister for Women to Cabinet, to mark International Women’s Day?

Rt Hon JOHN KEY (Prime Minister): It is not my intention to do a Cabinet reshuffle today, but I would like to note that I think that the current Minister for Women, Louise Upston, is doing great job.

Jan Logie: If the Ministry for Women is the “Government’s principal advisor on achieving better outcomes for women” as stated on its website, why is its Minister not in Cabinet?

Rt Hon JOHN KEY: Because it depends—from time to time, the Minister has been inside Cabinet; that was the case—

Eugenie Sage: Not under National, or your Minister.

Rt Hon JOHN KEY: Yes, it was. Pansy Wong was the Minister of Women’s Affairs inside Cabinet, so was Hekia Parata at one point. In other instances, they have not been. But whether a Minister is inside Cabinet or outside Cabinet is irrelevant when it comes to the portfolio. If there is an issue in the portfolio, I take those issues seriously. And, by the way, it is actually the responsibility of every Minister to advocate for women’s issues. I expect them to do that in the same way that I expect every Minister to advocate for Māori issues or other issues of significance—it happens right across the Cabinet.

Jan Logie: Is the Prime Minister OK that since he removed the Minister of Women’s Affairs from Cabinet there has been an increase in the gender pay gap, increased reporting on domestic and sexual violence, an increase in the number of children in poverty, and the number of women in senior executive roles is down?

Rt Hon JOHN KEY: I would reject the proposition from the member. Amongst other things, more women are working, gaining tertiary qualifications, and studying or working in high-growth sectors than ever before. A report from Statistics New Zealand released in September 2015 shows that women are now almost as likely as men to work in managerial roles. The report shows progress in areas where women have historically been under-represented. We have extended paid parental leave and there are a number of other issues that we have worked on.

Primary Sector—Economic Impact

9. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he agree with the Prime Minister that “when the primary sector sneezes, the New Zealand economy catches a cold”?

Hon BILL ENGLISH (Minister of Finance): Yes, I do agree with the Prime Minister, and I remember almost all of his quotes back to 2009. We are committed to doing what—I would particularly agree with the rest of that statement. We are committed to doing what we can to assist the dairy sector by, for example, working to remove barriers to free trade, supporting primary sector research and development, reducing unnecessary red tape, developing critical infrastructure, and supporting rural communities. Of course, since 2009 the Government has delivered on all of those commitments.

Grant Robertson: Is it correct that when John Key advised New Zealanders in November 2014 “not to worry about the declining price of milk” and that the price slide would “bottom out soon” the price for whole-milk powder was $567 higher than it is today, and when will his Government start to be straight-up with regional New Zealand?

Hon BILL ENGLISH: There has been a lot of commentary about what might or might not happen with the dairy price. It can be tracked fortnightly; the member may not be aware of this. Regional New Zealand has screens and computers and newspapers, and if he went there he would see that. They can track the Global Dairy Trade every fortnight. I think it is Wednesday morning it comes out. I do not think the patronising attitude he has towards regional New Zealand is shared by this Government.

Grant Robertson: What responsibility will he take for encouraging farmers to take on more debt, as part of his Government’s plan around doubling dairy sector production, while ignoring the warning signs that his Government got, more than 2 years ago, that there is a 5-year global milk glut?

Hon BILL ENGLISH: None. Dairy farmers are owners of significant assets, complex businesses, and they are absolutely capable of making their own commercial decisions. There is a small group that now will probably come under pressure, because they have got high cost structures and excessive debt. I do not think any of them would regard the responsibility for that being any other than their own.

Grant Robertson: Is he satisfied with Fonterra’s approach to its value-add strategy, and is it meeting his expectations of the role that it can play in diversifying the New Zealand economy?

Hon BILL ENGLISH: Fonterra’s fundamental obligation is to meet the expectations of its owners, which is not the New Zealand Government but the New Zealand farmers who have invested billions of dollars in that company. They regularly discuss Fonterra’s strategy. Of course, the current price of dairy products is going to ensure there is more diversification, because the capital that was going to flow into that industry is now going to flow somewhere else.

Jacinda Ardern: Does he believe the new terms of payment for contractors and small businesses adopted by Fonterra, including a shift to paying invoices after an additional 61 days, is acceptable?

Hon BILL ENGLISH: Well, it would be unacceptable if it was outside the current legislative requirements. In the end, these are freely transacting people doing business. Any party to the transaction is able to choose whether the terms are suitable for them, or not. But Fonterra, I am assured, is operating within New Zealand legislation.

National Certificate of Educational Achievement—2015 Results

10. PAUL FOSTER-BELL (National) to the Minister of Education: What reports has she received on NCEA level 2 results for 2015?

Hon HEKIA PARATA (Minister of Education): Tēnā koe, Mr Speaker. Provisional National Certificate of Educational Achievement (NCEA) data shows that student achievement is continuing to rise. The provisional role-based data shows level 1, level 2, and level 3 NCEA achievement rates of schools rose by between 0.4 and 1.8 percentage points last year to 73.2 percent, 75.8 percent, and 62 percent respectively. Over the same period the proportion of year 13 students gaining university entrance—

Hon Trevor Mallard: They can’t read and write. Why can’t they read and write?

Hon HEKIA PARATA: It is so good, is it not, that the Opposition is celebrating the rise in achievement of New Zealand students, because so many more kids are doing so.

Paul Foster-Bell: What action has led to these positive results for young New Zealanders?

Hon HEKIA PARATA: Since we took office at the end of 2008, level 2 achievement rates in school have risen by 15 percent. This rise reflects our Government’s focus on ensuring that all students get the opportunity to succeed. We are driving achievement through our unrelenting focus on lifting achievement for all students, working with schools and parents, raising the quality of teaching and learning, and identifying and targeting those students at risk. We are doing this both by expecting more from the system and by additional targeted investment in those students most at risk of not achieving.

Chris Hipkins: Why should parents and employers have confidence that improved rates of qualification attainment are actually a sign of improving educational achievement when a recent Tertiary Education Commission study found that up to half the students meeting NCEA literacy and numeracy requirements are not functionally literate or numerate?

Hon HEKIA PARATA: Because although that report was published recently, in December, the study was undertaken in 2012. In 2012 the literacy and numeracy credits were both strengthened and raised in numbers. Moreover, this Government introduced national standards recognising that literacy and numeracy are an important part of learning, and that we needed to start earlier in the system than at NCEA. So at all levels we have been strengthening literacy and numeracy.

Chris Hipkins: Was Avondale College principal, Brent Lewis, wrong this week when he stated that students can meet NCEA literacy requirements from only doing physical education or other subjects in which teachers had little experience assessing literacy and numeracy, and that tightening minimum requirements would make it much harder to achieve the Government’s goal of 85 percent of 18-year-olds achieving NCEA level 2?

Grant Robertson: What would he know?

Hon HEKIA PARATA: Exactly. Because the New Zealand Qualifications Authority carries out a moderation of 100,000 standards every year, and I give a lot of respect to the work that it does. Moreover, as it happens, you are required to be literate in a range of subjects, and not simply English. So you may understand that in other countries you can be literate in French and in Japanese; it does not just happen in English. It is important that kids learn literacy around all subjects, and the national qualifications framework makes that possible. The assessment is done by moderators, approved and accredited by the New Zealand Qualifications Authority, and the Auditor-General in 2014 backed those processes.

Police, Commissioner—Confidence

11. STUART NASH (Labour—Napier) to the Minister of Police: Does she have confidence in the Commissioner of Police?

Hon JUDITH COLLINS (Minister of Police): Yes.

Stuart Nash: Did she agree with the commissioner when he told the Law and Order Committee that the police are sufficiently resourced to solve crime, or does she believe the 86 percent of hard-working policemen and women who say front-line police officers are under-resourced?

Hon JUDITH COLLINS: I believe that the commissioner is correct. And I would also say of those wonderful police officers that they have been doing such a great job that crime is now at the lowest rate it has been since 1978.

Stuart Nash: What message did she deliver to the commissioner when she became aware that the burglary resolution rate had dropped below 10 percent nationwide, and is as low as 7.2 percent in Auckland?

Hon JUDITH COLLINS: A very firm message.

Stuart Nash: I raise a point of order, Mr Speaker. I did actually ask what message, not the firmness—

Mr SPEAKER: And the answer was given: “a very firm message.”

Stuart Nash: When she said to the New Zealand Herald this week that there is a shared responsibility for everyone to secure their property, is she really saying that it is Kiwis’ fault that they are getting burgled?

Hon JUDITH COLLINS: No.

Hon Damien O’Connor: How does the Minister expect police to maintain their legal obligations under the Policing Act to maintain public safety, to prevent crime, to enforce the law, and to meet response times of 30 minutes, as stated in the New Zealand Police statement of intent, when it disestablished a police station, Karamea—a station over 1 hour from Westport?

Hon JUDITH COLLINS: The member will be aware that there is a review going on on resourcing the West Coast, and I can tell that member that I have had many submissions from people on the West Coast, but particularly a submission from the new MP, Maureen Pugh, who has been very articulate and firm in her views.

Trans-Pacific Partnership—Consultation

12. JAMI-LEE ROSS (National—Botany) to the Minister of Trade: What opportunities do businesses and the wider public have to seek information on the Trans-Pacific Partnership?

Hon TODD McCLAY (Minister of Trade): Yesterday in Auckland I attended the first roadshow on the Trans-Pacific Partnership (TPP), which was held to an audience of around 300 people. This is the first of 16 roadshows and hui being held throughout New Zealand in the coming months. The roadshows and hui are designed to continue open debate, inform discussion, and assist businesses to identify and plan for new export opportunities when TPP comes into force. I encourage everyone who has an interest in TPP to attend a roadshow or hui in their region. In addition, I am looking forward to visiting regions over the next few months and to speak at around 50 TPP-related events.

Jami-Lee Ross: How wide has the consultation on TPP been so far, and how will the Government continue this consultation on the agreement?

Hon TODD McCLAY: It will be no surprise to anyone in this House that TPP has been the most widely consulted free-trade agreement the New Zealand Government has undertaken. The conversation on TPP will continue throughout 2016. For all of this year TPP will receive extensive parliamentary and public scrutiny, and the legislation will be considered by a select committee, allowing a significant amount of time for the public to have their say on TPP. Only when these steps have been completed and other countries have completed their own domestic approval processes will TPP be able to enter into force.

Dr Kennedy Graham: Can the Minister assure the House that he has given the same opportunity for information and consultation to the wider public as he has to business?

Hon TODD McCLAY: As Minister, absolutely I have. The meetings that have been arranged, the roadshow and the hui, are public meetings that are open to members of the public to attend. They do need to register; they can still do so. Indeed, they are open to members of the Green Party, including MPs. If they need the list, I can provide that to them.

Jami-Lee Ross: How will TPP benefit New Zealanders?

Hon TODD McCLAY: The TPP is New Zealand’s largest free-trade agreement. The TPP economies are worth $28 trillion and open our exporters up to more than 800 million consumers. The TPP has the potential to seriously enhance both national and regional economies and is estimated to add at least $2.7 billion to New Zealand’s GDP every year from 2030. Annual costs are estimated to be about $80 million by comparison. The TPP supports our exporters to grow and create new jobs and diversify their businesses in their dealings overseas.

ENDS

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