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SCP HOUSE: Questions Of The Day –24 July

Today's questions of the day concerned: Super – Charity Tax Status – Ngawha Prison Bribery Allegations – DHB Deficits And Service Cuts – Time Limits On Benefits – Statutory Management For ENZA – Telephone Line Charges – Select Committee Evasion – ERO Review Changes – Aged Care Funding – Cleaner Diesel Trials – Fire Service Union Intimidation.

Questions Of The Day - Tuesday, 24 July 2001

The following are paraphrases of today's questions for oral answer. They are not complete or official, the official record of Parliamentary proceedings is Hansard, which is not finalised till some days after the event.


Question 1.

MARK PECK (Labour) to the Minister of Finance Michael Cullen:

Q: Has he received any reports on the future of New Zealand Superannuation; if so, what do they say?

A: I received a report that the National Party, like the Greens, would like the same arrangements we would like for entitlements, but do not like the way we propose to pay for them. I also note that Greens support in a recent poll has halved.

Q: What will happen as a result of this?

A: This will not stop the bill passing. But it does create some uncertainty for the public.

Q: Bill English (National): Can he confirm that funding cuts for the care of the frail elderly are the result of his plans?

A: No.

Q: Richard Prebble (ACT): Has he seen the report of the FEC, chaired by Mark Peck, that says that the government will be borrowing every penny of the money to be deposited in the pre-funding scheme? And is our opposition to this scheme the reason that ACT has gone up in its poll support?

A: He and his colleagues have promised to spend more than we intend to save in the super fund. The member has, I understand, argued that putting $1000 into an account at birth will generate an annuity at retirement. That said the most honest alternative to the proposals of this government has come from the ACT Party, and that is to raise the age of entitlement to 68 and to de-link payments to wage levels.

Q: Rod Donald (Green): Has he seen any reports on the cost of adapting to climate change? And how will his super savings plans impact on this?

A: Even if the sea-level rises, super will still be needed by retiring people.

Question 2.

Rt Hon JENNY SHIPLEY (National) to the Prime Minister Helen Clark:

Q: Does she support her Finance Minister's document Tax and charities, which proposes to increase taxes for charities and churches; if so, why?

A: This is a discussion document. It does not represent government policy.

Q: Jenny Shipley (National): Why then did the PM say on air that she knew of no plans in this area, and I quote: “Sometimes people get carried away with rumour, you know”.

A: A discussion document is not a proposals for change. If she thinks it is fine to stick with a definition of charitable purposes set out in a law that is 400 years old….. (interrupted by interjections). Also in the document are proposals to raise the rebate level from $500 to $600, and a proposal to simplify company deductions and GST refunds. Only the National Party supports keeping a 1601 definition.

Q: Peter Dunne (United Future NZ): Can she give an assurance that before any decisions are made, points made in the Russell Committee’s report will be considered?

A: Yes. And can I say that without charities families in NZ would have never survived the 1990s and the attacks on their standard of living.

Q: Will she rule out increasing taxes on charities?

A: The government is reviewing a 400 year old definition.

Q: Will she rule out raising taxes on charities?

A: The government is seriously interested in people’s views on this 400 year old definition. The new broom really should come up to date.

Question 3.

NANDOR TANCZOS (Green) to the (acting) Minister of Corrections Tariana Turia:

Q: What action is he taking over a reported offer by a Corrections Department contractor "to construct a financial settlement for a Northland family if they withdrew their opposition" to the proposed prison site at Ngawha?

A: The Minister and I are concerned that appropriate action is taken. I will discuss this matter with the Minister on his return.

Q: Does she consider paying bribes is acceptable? And will she, in light of this revelation, review the Ngawha Prison decision?

A: No the Minister does not consider it appropriate if people are misled in this way.

Q: Nick Smith (National): Noting that backhanders under the RMA are becoming an increasing problem, and that they damage NZ’s reputation, what are the implications of government agents being involved in such schemes?

A: I have no evidence that this precedent has been broken.

Q: Why is the government building a new prison in Northland?

A: Currently there are inmates from Northland in prisons as far away as Dunedin. It is government policy to bring back inmates to their communities.

Q: Nandor Tanczos (Green): Does the Minister think it appropriate that a public servant can leave his job and get a contract position at greater cost to the taxpayer?

A: No.

Question 4.

Hon ROGER SOWRY (National) to the Minister of Health Annette King:

Q: What is her response to media reports that the Auckland District Health Board is facing a $62 million deficit this financial year and that it is proposing "service exits" to save $30 million over the next two years in a bid to live within its means as required by the Government?

A: I will await the receipt of the Auckland DHB’s draft annual plan.

Q: In light of numerous reports that DHBs are considering service cuts, does she still stand by statements that funding is sufficient to retain services?

A: I am surprised that the member cannot remember that claims of funding crises always accompany the funding round. The difference this time is that it is happening in public. Plans are expected at the end of this month. Over the next two months there will be consultation on these plans.

Q: Will she admit that her claims that there are no cuts in health services are fanciful?

A: No DHB has proposed any service cuts to me to date.

Q: Will she admit that she claimed in opposition that there was no room for more efficiency gains in the health sector? And what is the total level of deficits?

A: The total level of deficits of DHBs will not be known for some time. The member will know that DHB deficits reached $219 million when he was Treasurer. I would add that the member would also see that there are savings to be made, one of which is to get Pharmac to do drug purchasing.

Question 5.

TAITO PHILLIP FIELD (Labour) to the Minister of Social Services and Employment Steve Maharey:

Q: Does the Government intend introducing time-limited social security benefits?

A: No we do not. Time limited benefits are punitive and they do not work. I note however that the Leader of the Opposition, her loyal deputy and her social welfare spokesman all support these. I note that in response to Mr Simcock’s speech to the National Party Conference political scientist Barry Gustafson said Simcock had learnt nothing from the 1990s…

(Speaker… the minister is not responsible for National Party Conference speeches.)

A: (In response to a question from Mr Simcock) Mr Gustafson said that if Mr Simcock was representative of the future of the National Party then he wanted to have nothing to do with it.

Q: Muriel Newman (ACT): Is it okay for people to sit on the benefit for 20 years and then receive super?

A: Unlike the previous government that drove benefit levels up, we have the lowest level of unemployment in years and we intend to keep driving it down.

Question 6.

Hon RICHARD PREBBLE (ACT) to the Minister of Agriculture Jim Sutton:

Q: What are the Government's reasons for considering appointing a statutory manager to ENZA?

A: Statutory Management is designed to protect the interests of shareholders, beneficiaries or the public. The government is concerned about ENZAs treatment of Forex losses which appear to be in breach of contracts, and which could damage an entire industry. We are unwilling to rule out any option that could help resolve this issue.

Q: Is this communism?

A: I can think of no such example and I haven’t set one either. The government can wait for the arbitration process and the determinations of the Apple and Pear Board. The government will assume responsibilities of the board from October when it winds up. Options such as legislation and statutory management have not been formally recommended to the government at this stage.

Q: Can he confirm that deductions for Forex losses in out years are illegal according to Crown Law advice?

A: I have had had an opinion from Crown Law that indicates that deduction of 2002 forex losses is in breach of 2001 supply contracts. I provided a copy of that opinion to ENZA. ENZA said that they intended, when they had the consent of their bankers, to refrain from deducting these losses. However having received that bank consent, and in view of the preliminary view of the board that there have been breaches of regulations by ENZA, ENZA now consider it commercially imprudent to refrain from deducting the 2002 losses. I would say however that statutory intervention is one of the least attractive options. It has been believed for some time that there were significant forex losses in the board. It is also fair to say that some of these losses predated the takeover of ENZA of the activities of the Apple and Pear Marketing Board.

Q: Does he agree that it is his responsibility to have an inquiry to find out who is rorting who?

A: The government’s responsibility is to the nation and in this case to the growers. There are many inquiries underway and I have received many reports. The common sense approach would be for ENZA to refrain from deducting 2002 losses and for growers to accept the deduction of 2001 losses in the meantime awaiting a squaring of matters once due process is complete.

Question 7.

Rt Hon WINSTON PETERS (NZ First) to the Minister of Communications Paul Swain:

Q: Are developers and new home owners required to pay for telephone cabling, lines materials and installation costs only to lose all rights to ownership of them once installation is complete and thereafter be required to pay a line charge; if so, why?

A: The cables belong to the service provider not the home owner. The telephone service provider charges rental on use of those lines.

Q: Does the minister not understand the analogy, when I hire a taxi I do not have to pay for the taxi first?

A: I do understand the question. Service providers charge a connection fee. The government decided last year to upgrade the Kiwishare obligation. The upgrade represents a $100 million upgrade to Telecom’s network.

Q: Has he seen any reports that line charges have been dropped in areas of Christchurch where Telstra Saturn has moved in?

A: Yes I have. This is the advantage of competition. I also note that National did nothing about the matter in several years.

Q: Will the government include local loop unbundling in the Telecommunications Bill.

A: The government has considered this and decided against it. Having returned from overseas I think that introducing this for the new Telecommunications Commissioner would make his job really hard.

Question 8.

Dr the Hon LOCKWOOD SMITH (National) to the Minister for State Owned Enterprises Mark Burton:

Q: Has he ever directed officials to be evasive before a select committee?

A: No.

Q: Has he seen the unanimous report of the FEC that states that officials were evasive and attributed their evasiveness to ministerial directions?

A: What I actually said to officials was that if they were asked questions that were properly put to them they should answer them, but that if they were put questions that were properly put to me they should advise that I was returning to the committee and they should ask me. Clearly at least one member of staff was confused about what I said the following day, and gave an inaccurate answer.

Q: Is it now government policy that the confessed approach of State Services Commissioner Michael Wintringham – of providing partial answers - is appropriate for officials appearing before select committees?

(Trevor Mallard – Mr Wintringham has explained this point to a Select Committee and apologised. The second point is that that was not an accurate quote from the evidence of Mr Wintringham. I think that when one is talking about court evidence the member should not make it up.

Speaker – Points of order should be points of order. That wasn’t one.

Richard Prebble – I believe Mr Mallard’s interjection requires an apology.

Speaker – I have told the member he is out of order. If I had to rule out every point of order on that grounds there wouldn’t be many points of order.)

A: I made no reference to Mr Wintringham. I have read advice to public servants appearing before select committees.

Q: Rodney Hide (ACT): Does he accept that CCMAU officials were evasive and attributed their evasiveness to ministerial direction? And what is he going to do about it?

A: I have already answered that question.

Question 9.

HELEN DUNCAN (Labour) to the Minister responsible for the Education Review Office Trevor Mallard:

Q: Will he ensure that schools have a chance to comment on proposed changes to the way they are reviewed by the Education Review Office; if so, how?

A: Yes. As a result of the ERO committee report ERO is revising the way it carries out reviews in schools. The proposal is being sent to schools this week and interested parties have till the end of August to comment. ERO has proposed a more participatory and flexible approach. Schools will be able to nominate a representative on reviews too.

Q: Can the Minister assure the house that the ERO will continue to be independent?

A: I have given that assurance on a number of occasions. However as we move to more self determination for schools it is appropriate that they become more involved in their reviews.

Question 10.

Dr LYNDA SCOTT (National) to the Minister of Health Annette King:

Q: How will she ensure that the Government's proposal to move $8 million from geriatric hospital care to fund a small increase in rest home care will not significantly harm the care of our most frail elderly?

A: A decision has not been made on the proposal. But when it is made it will be made on the basis that there are no adverse consequences to aged people.

Q: When will she front up to old people and explain that Michael Cullen has taken all the money for his super fund?

A: The member should be aware that this was a problem created by the National Government, which did nil, zero, zilch, sod all. The government has made available this year $15 million extra for rest homes and aged care.

Q: How does she reconcile the $8 million deficit for aged care with promises from them PM about certainty of funding?

A: The member is premature. He should wait till the decisions are made. Consultations have been postponed to allow the government to consider a number of contractual and funding issues.

(Lynda Scott - leave to table the Service Workers Union newspaper – granted.)

Question 11.

MARTIN GALLAGHER (Labour) to the Associate Minister of Energy Pete Hodgson:

Q: What steps are being taken to lower the sulphur levels in diesel throughout New Zealand?

A: Yesterday the Government announced that the NZ Refinery Company would be undertaking two independent six week trials on lower sulphur diesel. A likely outcome eventually from this process is levels of 50 ppm by 2005, these are the same standards that Europe is aiming for.

Q: During the trial in Auckland will sulphur levels rise in the rest of the country?

A: No. These trials are a sensible way forward and I would like to congratulate the industry.

Q: Pansy Wong (National): How can the public have confidence that this is not simply a PR exercise?

A: I am hoping that she and her government supports this move. I hear some agitating from the other side which seems a bit like the National Party doing nothing when in government and then complaining when in opposition.

Q: What specific steps will be taken to meet his 2005 targets? And does he congratulate the ARC for its Mobil boycott campaign?

A: Very soon we will be releasing a discussion document on fuels. It is our intention to make some decisions early next year.

Question 12.

LINDSAY TISCH (National) to the Minister of Internal Affairs George Hawkins:

Q: Was the Fire Service's human resources manager correct when he said that "there is no compulsion" for paid firefighters to accept the new employment contract and that "There are people who wish to keep their old terms and they can."; if not, why not?

A: Yes. The collective agreement covers only members of that union. Paid fire-fighters not represented by the union are under no compulsion to change their conditions of employment.

Q: What will he do about Kangaroo courts of union heavies demanding apologies from CST members who have to join the union?

A: I would like to remind the member that it was his party that mucked this up. Those people have the opportunity to join the union if they want to.

Q: Is he aware of any use of compulsion to make fire-fighters join a new contract?

A: Yes as part of the Roger Estall affair.

Q: When will he stop turning a blind eye to the vicious intimidation at the hands of the union?

A: I would have to say that I have much more confidence in the current Fire Service Commission than in the old one.


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