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Questions and Answers - August 21


State-owned Assets, Sales—Progress

1. Hon KATE WILKINSON (National—Waimakariri) to the Minister of Finance: What progress is the Government making with its share offer programme to help New Zealanders diversify their savings away from property and bank deposits?

Hon BILL ENGLISH (Minister of Finance): Yesterday the Government announced that it expects to complete the partial float and sharemarket listing of Meridian Energy by early November, subject to market conditions. This is the second offer in the Government’s share offer programme. Listing up to 49 percent of Meridian Energy will give New Zealanders the opportunity to invest in another big New Zealand company. Many people recognise the value of diversifying their growing savings away from property and bank deposits. As with Mighty River Power, the Government remains committed to having 85 to 90 percent New Zealand ownership after the Meridian Energy offer, which will include the Government’s 51 percent shareholding.

Hon Kate Wilkinson: What are the main advantages in proceeding with the share offer programme?

Hon BILL ENGLISH: There are several. The companies themselves will benefit from a broader shareholder base and being stronger from the rigour and transparency that a sharemarket listing brings. The companies will be able to access capital to grow in more ways than they can as 100 percent taxpayer-owned companies. From the taxpayers’ perspective, the share programme will free up between $5 billion and $7 billion to invest in other Government capital. That means the Government can get the money off New Zealanders while providing them with an investment opportunity, rather than borrowing off foreign bankers, which our opponents prefer to do.

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Hon Clayton Cosgrove: What is the estimated cost to taxpayers of the retail instalment scheme for the Meridian Energy float, whereby investors pay for 60 percent of the cost of the shares at float and pay for 40 percent 18 months later; if he has no estimated cost, why not?

Hon BILL ENGLISH: No, we do not have an estimate. The reason is that we cannot know— [Interruption]

Mr SPEAKER: Order! There were two parts to that question. I want to hear the second part to that answer. [Interruption] Well, then, the member will ask his colleagues to be a bit quieter.

Hon BILL ENGLISH: It is that we cannot know the final share price, and, in any case, purchasers of those shares may well take it into account and therefore bid just a bit more for the shares, which would offset the cost.

Hon Clayton Cosgrove: Given that the Minister has announced the float and does not have an estimate of the costs, could he give us, as he has done in the past, his best guess?

Hon BILL ENGLISH: No, I cannot. I think what the member is more concerned about is that the Government could end up with several billion dollars’ cash in its bank account, which we would

then be able to use to invest in schools, hospitals, prisons, and other capital projects that the New Zealand public supports. And we will be able to do it without borrowing the money off foreign bankers.

Hon Kate Wilkinson: What are some of the features of the Meridian Energy share offer to encourage everyday New Zealand investors to consider buying shares?

Hon BILL ENGLISH: The Government has confirmed that it will use instalment receipts, which allow investors to pay for their Meridian Energy shares in two instalments. The first instalment, for around 60 percent of the share price, will be paid when investors apply for shares. The second instalment will not need to be paid for another 18 months. Between the two instalments investors will receive full dividends paid out in that period. Instalment receipts are common overseas and were used by the Government in the float of capital properties in 1998. Another feature of the offer is that there will be a share price cap for New Zealand retail investors, giving them more certainty about how many shares they will get when they apply to buy shares.

Hon Clayton Cosgrove: Did the Minister provide Cabinet with any estimate of the cost of the retail instalment scheme; if so, what was that, and did he further provide Cabinet with any notion of how such costs would be funded?

Hon BILL ENGLISH: No estimate was provided. [Interruption] Well, for the reason that the member mentioned before—it would just be a guess, and that would not be satisfactory.

Hon Kate Wilkinson: How will the proceeds from the share offer programme be invested in new public assets through the Future Investment Fund?

Hon BILL ENGLISH: As noted in a Cabinet decision in June 2012, Ministers agreed that all new capital expenditure over the next 3 or 4 years will count against the Future Investment Fund. This means that Ministers wanting access to the fund need to follow the normal Cabinet process to draw down from it and establish appropriations. A large proportion of this capital spending will be for schools and hospitals, but not exclusively. For example, we have earmarked $1 billion for modernising schools as part of the Government’s 21st Century School Building Programme, including, I think, 14 new schools in Christchurch. Those children will know they are going to a school funded by New Zealand investors, not foreign bankers.

Prime Minister—Statements

2. GRANT ROBERTSON (Deputy Leader—Labour) to the Prime Minister: Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes.

Grant Robertson: In light of his statement to this House in answer to question No. 3 on 31 July about the Henry inquiry “I had issued terms of reference for the inquiry,”, what responsibility does he take for those terms of reference being the reason that David Henry asked for, and was given, Andrea Vance’s swipe card access records?

Rt Hon JOHN KEY: I set the terms of reference, and I think those terms of reference were reasonably clear. I am not going to go into the other details, because it is a matter before the Privileges Committee.

Grant Robertson: Does he think that there was adequate oversight of his inquiry, given the evidence today that his chief executive was surprised that Andrea Vance’s swipe card records were accessed, that David Henry thought he was entitled to access them, and no one seemed to know what the powers or the parameters for the inquiry were?

Rt Hon JOHN KEY: I am not going to comment, because the matter is before the Privileges Committee. What may well occur as a result of the committee’s hearing is that there may be better protocols that are formed, and that would be a good thing if that is the case.

Grant Robertson: Does he agree with Judith Collins’ statement today that it was “chilling” to discover that the Henry inquiry had treated the privacy of Ministers’ metadata information in a “contemptuous way”?

Rt Hon JOHN KEY: I would not want to comment on a full quote that I have not seen, but what I can say is that as Prime Minister I put out the terms of reference, and if any Minister did not like them, they were happy to complain about it.

Grant Robertson: Does he agree with Andrew Kibblewhite, the Chief Executive of the Department of Prime Minister and Cabinet, who said today that there are circumstances in which journalists’ swipe card access records could be made available to an inquiry?

Rt Hon JOHN KEY: The matter is before the Privileges Committee. It is not helpful for me to wade in at this time.

Grant Robertson: Is he satisfied with how David Henry undertook the inquiry he issued the terms of reference for?

Rt Hon JOHN KEY: The matter is before the Privileges Committee, and it is not going to be helpful for me to do that. But I would be a lot more satisfied with David Henry than I would be with David Shearer hanging up a couple of snapper in the House.

Mr SPEAKER: Order!

Grant Robertson: Thanks for that, Bob Hope.

Mr SPEAKER: Order! [Interruption] Order!

Grant Robertson: Does he not think that given the privacy issues that clearly arise in respect of metadata, which Judith Collins raised today, and the other concerns raised in the committee, he owes New Zealanders the respect to listen to their concerns about the protection of their metadata and stop the Government Communications Security Bureau Amendment Bill today?

Rt Hon JOHN KEY: No. I think the bill should pass because it will strengthen the important role that New Zealand needs to play to protect our citizens. For the record, sonny, I might be Bob Hope but you’re “Grant Hopeless”.

Mr SPEAKER: Order! Order! [Interruption] If the Hon Annette King has a point of order, she is welcome to raise it.

Hon Annette King: I raise a point of order, Mr Speaker. Are you going to say anything other than “Order!” to that answer to a question?

Mr SPEAKER: Order! Can I ask the member to reflect on how the remark came about in the first place. It was a remark from—

Hon Trevor Mallard: He started it.

Mr SPEAKER: It is not helpful to determine who started it.

Hon Member: Yes, it is.

Mr SPEAKER: Order! It just goes to show the disorder that is created when smart remarks are provided by either the questioner or the person answering the question.

Resource Management Act Reforms—Planning Frameworks

3. CLAUDETTE HAUITI (National) to the Minister for the Environment: What recent announcements has the Government made relating to the improvement of planning frameworks under the Resource Management Act 1991?

Hon AMY ADAMS (Minister for the Environment): Just over a week ago I announced that the Government would be undertaking the most comprehensive set of reforms of the Resource Management Act since its inception over 20 years ago, primarily around improving the quality and effectiveness of our planning system. The reforms will address this by simplifying the planning framework and providing greater central government direction and consistency, leaving local decision makers to focus on how those frameworks should apply in their communities. The reforms will be focusing decision making around proactive planning and enabling councils to get on with delivering those plans, and making councils more accountable to their communities on how they are meeting all the needs of their communities. All in all this will address the huge wastage of time and money that currently occurs and that costs every one of us either directly or indirectly.

Claudette Hauiti: Why has the Government identified planning as the key area for reform?

Hon AMY ADAMS: It must always be remembered that the Resource Management Act is not just about environmental protection; it is also our planning law. It not only has to deal with managing the water in our catchments and the quality of our air but also has to deal effectively with providing for the functioning and development of our cities and our towns, including public infrastructure like roads and schools. In this respect it has not been serving us well. When it costs more to get the consent than it does to do the job, you have got a problem. Fundamentally, these reforms are about providing greater certainty for communities to plan for and meet their areas’ needs in a way that reduces the unacceptable costs and delays that have become the norm.

Economy—Impact of Tīwai Point Smelter Subsidy

4. Hon DAVID PARKER (Labour) to the Minister of Finance: What cost/benefit analysis was done to justify the $30 million subsidy payment to Rio Tinto, and what would the effect have been on electricity prices had the payment not been made?

Hon BILL ENGLISH (Minister of Finance): The Government has set out what it considers the benefits of this one-off payment, which secured agreement between Meridian Energy and New Zealand Aluminium Smelters after protracted negotiations. These benefits were greater short-term certainty for the Tīwai Point smelter workers, and medium-term certainty for the business, the wider Southland region, and the New Zealand electricity industry. In answer to the second part of the question, that depends on the response by the parties to the negotiation and more widely by the electricity market. We were not in a position, and no one is, to speculate on that.

Hon David Parker: Why did he not request or obtain any job or employment commitments from Tīwai Point beyond a very short period before handing over $30 million of taxpayers’ money to Rio Tinto?

Hon BILL ENGLISH: We dealt with that issue a couple of weeks ago. It was never the Government’s intention to provide an ongoing subsidy to the electricity prices or to the business, and it was never the Government’s intention to try to run the business. We made a clean, simple, one-off payment to secure finalisation of the commercial agreement. That is what happened. It would have been a bit different, I suggest, if that agreement had not been completed; then the member would be telling us off for not doing enough to save the jobs.

Hon David Parker: How could the Minister decide whether or not it was wise to pay a $30 million subsidy payment to Rio Tinto if he did not have any estimate as to what would have been the effect on electricity prices, and, therefore, the effect on other businesses and consumers, had that electricity been available on the New Zealand market?

Hon BILL ENGLISH: Well, because the electricity price in 5 years’ time if Rio Tinto left was not our top consideration. I am surprised that it is his. I suggest that he go to the smelter and tell the workers that actually their jobs are much less important than the electricity price in 5 years’ time if the smelter goes. Actually, no one can really know what that would be.

Hon David Parker: Has the $30 million subsidy to Rio Tinto had the effect of facilitating the sale of the shares in Meridian Energy?

Hon BILL ENGLISH: It has, I am sure, created more certainty where there was uncertainty among investors. That was one of the benefits of the arrangement that we came to with Rio Tinto, but I am still a bit unclear as to whether the member is proposing that the Government did too much, that the smelter should now be shut, and that the 700 highly paid jobs do not matter. I am not surprised about that bit, because the Labour Party—

Mr SPEAKER: Order! That answer was quite sufficient for the question.

Dr Russel Norman: Does the Minister stand by his previous opposition to picking winners, and how is his opposition to picking winners consistent with the $30 million payment to Rio Tinto?

Hon BILL ENGLISH: Yes, I think Governments have to be very, very careful about picking winners, but at least we pick some winners. The Greens just try to pick—in fact, they do not even pick out; they just stop everything. We wish they would pick something—

Dr Russel Norman: I raise a point of order, Mr Speaker. That was a very straight question. It was not about Green Party policy. The Minister started his answer by attacking the Greens. It has nothing to do with the Greens. He should answer the question.

Mr SPEAKER: I think that the question has been answered and the Minister does not need to continue with his answer.

Dr Russel Norman: I raise a point of order, Mr Speaker. Can you tell me how the Minister has possibly answered the question by simply attacking the Green Party?

Mr SPEAKER: Because the member asked—if he would like to look at his question—whether the Minister stands by his previous position of not picking winners, and the Minister went on to explain why he still stands by that. He does not want to pick winners, etc., but he explained why, on this occasion, jobs were more important.

Question No. 5 to Minister

Dr RUSSEL NORMAN (Co-Leader—Green): I raise a point of order, Mr Speaker. I seek leave to move this question back to the Minister of Finance.

Mr SPEAKER: We have discussed this before. The Government has every right to transfer a question unless it is an opportunity whereby I do not believe that an answer would be adequately given.

Rt Hon Winston Peters: He’s not arguing that.

Mr SPEAKER: Would the Hon Winston Peters please stop interjecting while I am on my feet. On this occasion there is simply no point in putting the question of leave, because the Government has already made its decision. If the Government wanted to seek leave, it could do so—I doubt whether it wants to—but for the member to seek leave for the Government to do something is not acceptable. Does the member want to continue with the question?

Dr Russel Norman: Point of order, Mr Speaker. I—

Mr SPEAKER: Order! Before the member starts I just want to check that this is a fresh point of order.

Dr Russel Norman: This is in relation to your ruling.

Mr SPEAKER: Is the member now questioning my ruling?

Dr Russel Norman: No, I am not questioning your ruling, Mr Speaker.

Mr SPEAKER: Then the member will proceed to ask question No. 5.

State-owned Energy Companies, Shares—Cost of Instalment Scheme for Meridian Energy

5. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister for State Owned

Enterprises: Did officials provide the Government with an estimate of the cost to the Crown in foregone interest of allowing retail buyers of Meridian Energy shares to pay for their shares in instalments; if so, what was that estimate?

Hon TONY RYALL (Minister for State Owned Enterprises): No, because any such estimate would be affected by many factors, particularly the share price, which has yet to be set. Our commercial advice is that instalment receipts will increase demand and widespread New Zealand ownership. Investors will, as the Minister of Finance said, take this into account in terms of price and demand.

Dr Russel Norman: So is the Minister telling us that this policy is uncosted, that Treasury provided no band as to what the cost of these interest-free loans may be, and that the Government is going to proceed down this path despite having no idea as to the cost?

Hon TONY RYALL: As I explained in my primary answer, and as the Deputy Prime Minister, the Minister of Finance, said in his answer, the reason why there is no estimate is due to the myriad of factors that would support this. As the Minister of Finance says, investors will take this into account in terms of price and demand, as I am sure New Zealanders will take into account the fact

that this provides them with an opportunity to invest in a very long-term business and to release cash that can be used to invest in important social infrastructure like schools, roads, and hospitals.

Dr Russel Norman: If the Government has no idea as to the cost of this policy, how could it conduct a rational benefit versus cost analysis of this policy if it has absolutely no idea as to the cost of the policy?

Hon TONY RYALL: Of course, what the Government measures this against is our oft-stated policy about the mixed-ownership model programme and the benefits that will flow to New Zealand from that in terms of wider New Zealand ownership, deepening the capital markets, and providing revenue and capital that can be used to invest in schools, roads, and hospitals. I have to say that as I travel around New Zealand, people are excited about the opportunities to have more capital to invest in social infrastructure.

Dr Russel Norman: Can he confirm that large retail investors, like the 400 that bought an average of a quarter of a million dollars’ worth of Mighty River Power shares, will effectively be getting a $100,000 interest-free loan under this policy, which is effectively a gift worth about $8,000 to $10,000 to them from the rest of New Zealand?

Hon Craig Foss: No one’s bought anything yet.

Hon TONY RYALL: As Mr Foss says, no one has bought anything yet, because the shares have yet to be floated. But what I can tell the member is that instalment receipts will provide an opportunity for New Zealanders to take a potentially bigger stake in Meridian Energy than they might have previously. What it will do for all New Zealand is free up cash that we can make available through the Future Investment Fund for important infrastructure like schools, roads, and hospitals. In my other ministerial portfolio, I am very pleased that there will be over $420 million for the Christchurch city hospitals.

Dr Russel Norman: What is the ethical or moral basis for a policy in which ordinary New Zealand families who are struggling to save to buy a home, for example, are forced to contribute gifts to wealthy investors who can afford to stump up with $250,000 to buy shares in this company? Why should ordinary New Zealand families have to gift these people $10,000?

Hon TONY RYALL: I do not think the member should consider that this is gifting anything to anybody. The member seems to have the basis that everything has to match a certain group of people. Well, actually, the $426 million going into Christchurch Hospital will benefit 10 percent of the population, but the other 90 percent are happy to make that social investment, because it is part of building our nation’s infrastructure. We are on the side of nation-building, not destruction like that party is.

Dr Russel Norman: Does he dispute any of this summary of the asset sale programme to date: first, Treasury warned that there would be no significant economic gains from the sales and they would permanently increase the Government deficit; then Solid Energy turned out to be unfit to sell, Mighty River Power sold for less than was expected, and only half the New Zealand buyers who were forecast to show up—

Mr SPEAKER: Order! [Interruption] Order! The member will resume his seat. The member needs to refer to Standing Order 377 as to the content of questions. That question is now becoming very long—a summary of a lot of events—which breaches the Standing Order. I invite the member to curtail his question and ask a question that is in line with Standing Orders.

Dr Russel Norman: Does he dispute the summary of the asset sale programme that includes a number of matters of failed policy on the Government’s behalf and ends with this Government now forking over tens of millions of dollars of taxpayers’ money in a desperate bid to bribe people to buy Meridian Energy shares?


Electoral Legislation—Exclusion from Electronic Transactions Act 2002

6. Hon PETER DUNNE (Leader—United Future) to the Minister of Justice: Why were the Electoral Act 1993 and the Electoral Regulations 1996 excluded from the provisions of the Electronic Transactions Act 2002?

Hon JUDITH COLLINS (Minister of Justice): A number of Acts and provisions were deliberately excluded from the Electronic Transactions Act when it was passed in 2002 under another Government. The Electoral Act and the Electoral Regulations were among those exclusions. The reason for their exclusion was the importance of maintaining a very high level of integrity and public confidence in our electoral system. I accept that things have changed since 2002, and there is now a greater expectation for information to be received and stored electronically. We engage in electronic transactions and communications constantly, with online banking, purchasing products, and even ordering passports. I agree that the time has come when we should also be looking at a greater use of electronic data for all aspects of our electoral system. I have asked my officials and the Electoral Commission to consider ways in which this can be achieved while maintaining the very necessary high levels of security and public confidence in the system.

Hon Peter Dunne: I raise a point of order, Mr Speaker. It was quite difficult to hear the last couple of sentences of the Minister’s answer. I wonder whether she could repeat them, please.

Mr SPEAKER: If the member had trouble hearing the last couple of sentences, they will be repeated. But it just goes to show that it is not helpful when members are dissatisfied with the answer they are hearing to then let out a lot of interjection that makes it difficult for any member who particularly wants to hear the answers that are being given to hear them. Would the honourable Minister repeat the last two sentences.

Hon JUDITH COLLINS: The last two sentences—I agree that the time has come when we should also be looking into the greater use of electronic data for all aspects of our electoral system. I have asked my officials and the Electoral Commission to consider ways in which this can be achieved while retaining the very high levels of security and public confidence in the system.

Hon Peter Dunne: Does the Minister’s answer mean that she is prepared to look, in the context of the forthcoming rewrite of the Electoral Act, at changes to the law, to ensure that where parties register members online, those memberships will be accepted as valid?


Hon Peter Dunne: Is the Minister also prepared to consider, as part of that review or changes to that legislation, looking at providing for a mandatory audit by the Electoral Commission of all parties’ membership once every 3 years?

Hon JUDITH COLLINS: I have not given that matter any thought, but it is a matter that I could always discuss with the Electoral Commission.

Housing, Affordable—First-home Buyers and Mortgages

7. PHIL TWYFORD (Labour—Te Atatū) to the Minister of Finance: Why did the Government through its memorandum of understanding agree the Reserve Bank could introduce loan-to-value ratios without an exemption for first home buyers?

Hon BILL ENGLISH (Minister of Finance): Because we have read the Reserve Bank of New Zealand Act and support the independence of the Reserve Bank, neither of which the member seems to have done. We do not agree with how the member is characterising the memorandum of understanding. The Reserve Bank has always had the independent power, under the Reserve Bank of New Zealand Act, to use macro-prudential tools, including loan-to-value ratio restrictions. The purpose of the memorandum was to put in place a proper process, which included consultation with the Government and others if the bank was considering the use of such tools. There is no question of the Government agreeing or not with the bank’s decision or any exemptions to it. The Reserve Bank operates independently. This question is another example of Labour’s gradual move away from an independent—

Mr SPEAKER: Order! That has nothing to do with the question.

Phil Twyford: What guarantee can the Government give existing homeowners that their mortgage interest rates will not rise as a result of higher loan-to-value ratios?

Hon BILL ENGLISH: This again shows a front-bencher of the Labour Party asking the Government about how it is going to set interest rates. We do not do it.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Given your new, strict approach to the co-leader of the Green Party, I want to ask you whether Standing Orders 383(2)(b) and (c) apply in this case.

Mr SPEAKER: They do. I am going to invite the member to ask the question again, and I expect the Minister to simply address the question.

Phil Twyford: Does he stand by his statement that if it were not for loan-to-value ratios, interest rates would have to go up for everyone—

Mr SPEAKER: Order! That is now slightly different question to what was asked.

Phil Twyford: It is slightly different.

Mr SPEAKER: I invited the member to repeat—[Interruption] Order! I invited the member to repeat the question he asked.

Phil Twyford: What guarantee can the Government give existing homeowners that their mortgage interest rates will not rise as a result of higher loan-to-value ratios?

Hon BILL ENGLISH: The Government can give no guarantee because the Government does not set interest rates. I know under the Labour Party that is where they are heading, away—

Mr SPEAKER: Order! The Minister has no responsibility for Labour Party policy.

Phil Twyford: How will his KiwiSaver policy, which frees up just $5,000, help first-home buyers when his new loan-to-value policy means Auckland first-home buyers may need a deposit of $90,000?

Hon BILL ENGLISH: In case the member still does not understand independent Reserve Banks, the loan-to-value ratio policy—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I am going to ask you whether in this case Standing Order 383(2)(b) applies.

Mr SPEAKER: It certainly does apply, as does Speaker’s ruling 176/3, which says that members should not start the answer with a political attack on the questioner or the party that the questioner comes from. Would the member like to re-ask his question? [Interruption] Order! Phil Twyford can repeat that question.

Phil Twyford: How—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. You said that members— Ministers—should not start out with an attack on the questioner. That is what you just said, which I understood was precisely Mr Norman’s point earlier on this afternoon, when you sat him down and everybody else who wanted to contest you said the same thing.

Mr SPEAKER: Order! The member should go back and look at the Hansard. He will note then the type of question that was asked by Dr Russel Norman. If members ask a loose question with a lot of inference and a lot of political stick, they are likely to get something back as well.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I would just like to support the comment made by Winston Peters. I think there were two areas where you intervened on Mr Norman. I think you are confusing the two.

Mr SPEAKER: Order! If the member is now starting to question my ruling, I will take a very dim view of that and the member will not be here for much longer. I have asked Phil Twyford to repeat his question.

Phil Twyford: How will his KiwiSaver policy, which frees up just $5,000, help first-home buyers when his new loan-to-value ratio policy means Auckland’s first-home buyers may need a deposit of $90,000?

Hon BILL ENGLISH: The member’s assumption is wrong. The loan-to-value ratio policy is a policy of the Reserve Bank. In New Zealand, under the Reserve Bank of New Zealand Act, our Reserve Bank is independent. The member may not understand that, but that is how it is.

Phil Twyford: Why did the Government set a 10 percent deposit requirement for a Welcome Home Loan and the KiwiSaver first home deposit scheme when most first-home buyers have no chance of scraping up a 10 percent deposit to get a mortgage?

Hon BILL ENGLISH: The Government made a set of decisions around KiwiSaver and the Welcome Home Loan scheme that would mean that if the Reserve Bank brought in restrictions, then first-home buyers would get a better go than would otherwise be the case. Then the Reserve Bank took into account the Government’s policy decisions. So the Government’s policy decisions had to balance off the opportunity for first-home buyers to be able to get an opportunity to buy a home under a pretty restricted environment, on the one hand, but, on the other hand, respect the fact that the Reserve Bank was signalling very clearly it felt that low-deposit loans represented a risk to financial stability. That is in the Reserve Bank of New Zealand Act. The Labour Party used to know what—

Mr SPEAKER: Order!

Jami-Lee Ross: Has the Minister received any reports in support of loan-to-value ratios?

Hon BILL ENGLISH: Well, as I have made pretty clear, it is not a matter of whether the Government or anyone else supports or otherwise the loan-to-value ratio restrictions. That is a matter for the Reserve Bank, acting independently. However, I have seen examples from some other organisations. One person said: “We support loan-to-value ratios. We have been calling for them for ages as part of reforming monetary policy.” That was Phil Twyford.

Phil Twyford: Does he stand by his statement—[Interruption]

Mr SPEAKER: Order!

Phil Twyford: Does he stand by his statement that if it were not for loan-to-value ratios, interests rates would have to go up for everyone, and, given that BNZ put its rates up this morning citing loan-to-value ratios, has he missed something?

Hon BILL ENGLISH: I have pointed out the argument the Governor of the Reserve Bank has made, which, as I understand it, is that he does have a range of ways of cooling the housing market. One of them is to put up interests rates. He has stated a preference that he would rather not do that. As it turns out, New Zealand is one of the fastest-growing developed economies in the world, and if it is the first country in the world to put up interest rates, it could have a big effect through the exchange rate on our economy. That is one reason, among others, why he prefers the loan-to-value ratio tool.

Housing, Affordable—Development Contributions and Legislative Reform

8. PAUL GOLDSMITH (National) to the Minister of Local Government: What changes will the Government make to the Local Government Act 2002 to improve housing affordability?

Hon CHRIS TREMAIN (Minister of Local Government): We will make changes to constrain the way councils charge developers for new sections. Some councils currently use development contributions to help pay for new art galleries, botanic gardens, and aquatic centres, which leads to new home owners paying disproportionately for these facilities. We will now narrow the scope of development contributions to focus on the essentials such as network infrastructure and reserves that are directly associated with the new developments.

Paul Goldsmith: Why do development contributions need to be constrained?

Hon CHRIS TREMAIN: The previous Government expanded the scope of development contributions, which saw these charges rise significantly over the last 10 years. Development charges now average $14,000 per section and can be up to $65,000. In at least six provincial councils, the average development charge is 10 percent of the average house price. These charges, of course, are passed on to homebuyers, who pay a higher price as a result.

Paul Goldsmith: What other changes have been announced as part of the development contribution reforms?

Hon CHRIS TREMAIN: We will improve the transparency of development contributions and introduce an independent objections process. In addition, we will expressly enable the private provision of infrastructure through development agreements. The changes to development contributions are part of a package of initiatives that prove that this Government is strongly focused on improving the affordability of houses for Kiwis.

Trans-Pacific Partnership—Confidence in Minister of Trade

9. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Is he confident that his Minister of Trade’s actions in regards to the Trans-Pacific Partnership are in the interests of New Zealand?

Rt Hon JOHN KEY (Prime Minister): Yes.

Rt Hon Winston Peters: Does he believe that investor-State dispute settlements are beneficial to countries and their Governments; if so, why?

Rt Hon JOHN KEY: Yes, they can be. New Zealand has negotiated investor-State dispute settlement provisions in a number of free-trade agreements that have been supported by this Parliament, including the ones with China and with ASEAN and Australia, and the primary reason for that, of course, is that they also support and protect New Zealand investors when they invest offshore with other countries that have similar provisions.

Rt Hon Winston Peters: How will New Zealanders benefit from their Government’s being able to be sued by foreign big businesses when nearly $1 billion has been paid out by foreign Governments to overseas investors in these disputes brought under Trans-Pacific Partnership - like agreements?

Rt Hon JOHN KEY: Firstly, I cannot comment on whether the Government can or would be sued. It would depend, under the Trans-Pacific Partnership, on whether investor-State dispute settlement provisions are provided for in the final agreement. But what I can say is that the New Zealand Government will not sign anything unless it is in the best interests of New Zealand. Secondly, as we have done so historically in the past, there have always been caveats within those dispute settlement provisions that allow us to carve out certain areas to protect New Zealand’s best interests.

Rt Hon Winston Peters: If in OECD States the average legal cost for Governments involved in these disputes is NZ$10 million, but frequently rising to more than NZ$40 million, would he abandon the Trans-Pacific Partnership if it provided foreign companies with unfettered power to—

Hon Steven Joyce: Have you heard of what we get out of trade agreements?

Mr SPEAKER: Order! Would the Hon Steven Joyce please stop the continual barrage while the member is asking his question, and would the Rt Hon Winston Peters commence that question again.

Rt Hon Winston Peters: If in OECD States the average legal cost for Governments involved in these disputes is $10 million per dispute, but frequently rises to as much as nearly $40 million, would he abandon the Trans-Pacific Partnership if it provided foreign companies unfettered powers to sue the New Zealand Government; if not, why not?

Rt Hon JOHN KEY: Let me reaffirm what I said earlier. Firstly, New Zealand is not going to sign up to any free-trade agreement, and that includes the Trans-Pacific Partnership, unless it is in New Zealand’s interest to do that. Secondly, the major provisions within the Trans-Pacific Partnership are currently being worked through. The third thing I would say is that the Trans-Pacific Partnership, as the member may or may not be aware, is a negotiated agreement between 12 different economies. In one of the pieces of research I saw recently, it is estimated that it could be worth between $2 billion to $4 billion a year for the New Zealand economy. So I would say that that is fairly strong evidence that it well may be in New Zealand’s interest to do the deal.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. My question, having given the facts, was whether he would abandon the Trans-Pacific Partnership if it provided foreign companies unfettered powers.

Mr SPEAKER: Order! I listened very carefully to the question. I listened very carefully to the answer. The only part I think the Prime Minister could be asked to address is whether he will abandon the negotiations on the Trans-Pacific Partnership.

Rt Hon JOHN KEY: I raise a point of order, Mr Speaker. I do not want to question your ruling, but I think I have answered that question. I said New Zealand will not sign something unless it is in its best interests to do so.

Mr SPEAKER: I do not actually think that does answer specifically the question. I think it is a relatively easy question to answer, but I am not responsible for the quality of the answers that are given by any Minister. If the Prime Minister wishes to add any more, he is welcome to; if he does not, so be it.

Rt Hon Winston Peters: Well, try this one: if it is good enough for the US Government to provide the up-to-date text to members of Congress, why will he not make the up-to-date text available to New Zealand’s Parliament and MPs?

Rt Hon JOHN KEY: Well, try this one: that is not the way we do it here.

Rt Hon Winston Peters: What reason has he got for shutting out MPs and the New Zealand public from all knowledge of this secret deal if he has not got something significant to hide?

Rt Hon JOHN KEY: There is nothing to hide. We are in the process of negotiation. To the best of my knowledge, that is the way things have always happened. In the fullness of time, assuming a deal was concluded—

Hon Damien O’Connor: What are you hiding?

Rt Hon JOHN KEY: My underwear.

Mr SPEAKER: Order! Interjections bringing the Speaker into the debate on two occasions are unacceptable. Does the Prime Minister wish to complete—[Interruption] Order! Does the Prime Minister wish to add anything further to the answer? I do not think so.

Snapper 1 Fishery—Policy Proposals

10. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister for Primary Industries: Does he stand by his public statement yesterday that the Snapper 1 Policy proposals are not “too controversial”?

Hon NATHAN GUY (Minister for Primary Industries): Yes, in the context in which it was given. There is nothing controversial about ensuring the sustainability of our most valuable inshore fishery. I do acknowledge that some aspects—in particular, the option to reduce the bag limit to three—are controversial. But that is why I have publicly stated that that option is unlikely to proceed, and why I will be taking any decision I make to Cabinet.

Hon David Cunliffe: Given that answer, would the Minister like to tell the House how many emails and submissions he and his office have received, to the nearest 10,000, and say why he is not listening to either them or the thousands of angry fishos who have turned up in places like Tauranga, Thames, Hamilton, Whakatāne, Kaikohe, Whangarei, Warkworth, North Shore, Bucklands Beach—

Mr SPEAKER: Order! I think we have all got the gist of the question.

Hon NATHAN GUY: I am listening. That is why on Friday, when the consultation period closes, my officials will be summarising all the submissions with some advice, and then I will make a decision.

David Bennett: What comments has the Minister seen on Snapper 1 policy proposals?

Hon NATHAN GUY: I have seen a range of comments on this consultation proposal, including: “I congratulate the Government for running their policy on this as well as putting out a review.”

That comment was from David Shearer last night at a public meeting in Auckland. I thank Mr Shearer for acknowledging the process that the Government is going through.

Hon David Cunliffe: In seeking to hide behind the argument that he has not yet made final decisions, is he aware of section—[Interruption] Mr Speaker.

Mr SPEAKER: Order! Would the member again ask the question, without the inference at the start.

Hon David Cunliffe: Given that the Minister is using the defence that he has not yet made final decisions, is he aware that paragraph 5.12(f) of the Cabinet Manual requires that all discussion documents must be taken to Cabinet prior to their release or consultation, or does he think that John Key, his Cabinet colleagues, and backbenchers like Scott Simpson, David Bennett—

Mr SPEAKER: Order! [Interruption] Order! The question is substantially too long. It has now been given and can be answered by the Minister.

Hon NATHAN GUY: No decisions have been made.

Hon David Cunliffe: I raise a point of order, Mr Speaker. The Minister has not begun to address the question, which was—

Mr SPEAKER: Order!

Hon David Cunliffe: I have not made the point of order yet, with respect—

Mr SPEAKER: The member will resume his seat. If the member wants a specific answer, then he can go to his office and do a far better job at drafting a question than he did on that occasion.

Te Ururoa Flavell: Kia ora tātou. Has the Minister investigated the impact of the various options on Māori families in area 1, whose traditional lifestyles are sustained by the fish they catch as recreational fishers; if not, why not, given that the seminal Treaty fisheries claims and the Sealord deal resulted from a previous Government’s failure to consider the impacts of the fisheries management changes with the introduction of the quota management system on Māori fishers in that same area?

Hon NATHAN GUY: I can assure the member I will be taking into account the impact of any decision that I make on families in the particular area, including the impact on Māori families. The member makes a very good point about ensuring that those whose lifestyle depends on catching fish can continue to do so for generations to come. This is what the consultation is all about.

Brendan Horan: In considering the Snapper 1 proposals, has the Minister consulted with the Māori Council; if not, why not?

Hon NATHAN GUY: I specifically have not consulted with the Māori Council, but I cannot answer whom my officials have consulted with.

Brendan Horan: I raise a point of order, Mr Speaker. I asked “if not, why not?”.

Mr SPEAKER: Order! No, I think the question has been adequately answered. The Minister said he has not, but he was not sure whether his officials had done so. Clearly he is saying he did not think it was at his ministerial level.

Hon David Cunliffe: Why did he not consult Cabinet when the Cabinet Manual required him to under paragraphs 5.12(a), 5.12(b), and 5.12(f), which include for discussion documents on any matter that is significant or controversial?

Hon NATHAN GUY: It is important for the member to realise that this is just one fishery stock assessment of 17 that are out for consultation at the moment. In the last decade, under the Labour Government as well, there have been on average 20-odd fishery stock consultation documents a year that have been released. These are very technical and routine, and I would be very surprised if many of those went through Cabinet.

Hon David Cunliffe: I seek leave to table the Cabinet Manual 2008—

Mr SPEAKER: Order! [Interruption] The Cabinet Manual is available and has been well referenced.

Hon David Cunliffe: Point of order, Mr Speaker.

Mr SPEAKER: Order! Supplementary question. [Interruption] Order! Is there a further point of order coming from the member?

Hon David Cunliffe: Yes. I seek leave to table a series of transcripts of interviews with National MPs, including—

Mr SPEAKER: Order! [Interruption] They will all be freely available to members if they wish to go and search for them.

Brendan Horan: In considering the Snapper 1 proposals, what is the cost-benefit value of recreational fishing to the New Zealand economy, including cars, boats, trailers, tourism, bait, tackle, accommodation, food, drink, and all associated economic activity and jobs?

Hon NATHAN GUY: I do not know that that evidence has been provided to me right down to the level of cans of Coke and packets of chippies, but what I can say is that when it was last looked at, the estimated value of recreational to commercial was very similar.

Brendan Horan: I raise a point of order, Mr Speaker. I did not ask what it was compared with commercial—

Mr SPEAKER: Order! The member is now trifling with the Chair. That question was addressed satisfactorily. If the member is not happy with the answer, that is his problem.

Resource Management Act Reforms—Environmental Protection

11. EUGENIE SAGE (Green) to the Minister for the Environment: When she said, “… I think we can point to any number of ways that we are making our environmental safeguards more effective and more stringent” was she referring to her proposed changes to the Resource Management Act 1991?

Hon AMY ADAMS (Minister for the Environment): I was referring to the number of matters that I had just listed by way of examples.

Eugenie Sage: I raise a point of order, Mr Speaker. That was a fairly straight question. It was on notice. I did not hear the Minister answer yes or no.

Mr SPEAKER: Well, I think it was included in the answer the Minister gave.

Eugenie Sage: Is the Minister saying that the Law Society was wrong when it called her proposed changes a “watering down” of the Resource Management Act principles, which was “likely to create considerable uncertainty” and “likely to increase the costs as parties and decisionmakers re-open long-settled debates”?

Hon AMY ADAMS: Well, if the member is referring to the quote in the primary question, no, because that was not the context of it.

Eugenie Sage: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! I have a point of order from Eugenie— [Interruption] Order! If Andrew Little wants to stay for the balance of question time, I invite him to cease his barrage. [Interruption] Order!

Eugenie Sage: It was a question requiring a yes or no answer, and the Minister did not give that.

Mr SPEAKER: On this occasion I am going to invite the member to repeat the question, but can she repeat it in such a way that it is without the part that is unnecessary to the question. What the member is wanting to know is whether the Law Society was right or wrong. Ask a simple question, and I can help the member get a simple answer.

Eugenie Sage: Is the Minister saying that the Law Society is right or wrong when it calls her proposed changes to Part 2 of the Resource Management Act a “watering down” of the Resource Management Act principles, and is the Law Society right or wrong when it says that those changes are “likely to create considerable uncertainty” and “likely to increase the costs as parties and decision-makers as people re-open long-settled debates” about what matters of national importance mean?

Mr SPEAKER: I invite the Minister now to answer the question, but I will not take a point of order from the member questioning the answer she is given, when she was invited to ask a simple question in line with the Standing Orders and chose to make such a lengthy question.

Hon AMY ADAMS: I do not agree with the Law Society.

Eugenie Sage: Is the Minister saying that 99 percent of the 13,277 submitters on her February 2013 discussion document on the Resource Management Act are wrong when they opposed or expressed serious concern on most aspects of her proposed changes to the matters of national importance, or is she not going to listen to them and simply push ahead with her changes to the Act?

Mr SPEAKER: The Hon Amy Adams—either of those questions.

Hon AMY ADAMS: First of all, I would have to point out that more than 12,000 of those submissions were form submissions, elicited on what I would consider some fairly mischievous information from the organisations seeking them. Secondly, the submissions were in respect of the discussion document, and as a consequence of the feedback on that document we have made changes. Thirdly, if she is asking me whether I honestly think that 99 percent of submitters were opposed to us adding in natural hazards as a matter that needed to be included, no, I do not think they meant that.

Eugenie Sage: Does the Minister think that it is wise, given the international spotlight on New Zealand’s clean, green reputation, to be making changes to the Resource Management Act, when the architect of that Act, Sir Geoffrey Palmer, says that they “will significantly—[Interruption]

Metiria Turei: I raise a point of order, Mr Speaker.

Mr SPEAKER: Order! I have a point of order from Metiria Turei.

Metiria Turei: I am sorry but I simply cannot hear the question effectively with the barracking that is coming from behind me, on this side of the House.

Mr SPEAKER: Order! [Interruption] Order! I do not need any assistance. That is a very reasonable point that has been raised. I am going to invite the member to repeat the question, but after question time could I ask Metiria Turei to help her members provide supplementary questions that are of a reasonable length, which can, we hope, get a reasonable answer.

Metiria Turei: I raise a point of order, Mr Speaker. I accept your invitation to discuss—

Mr SPEAKER: What is the point of order?

Metiria Turei: —this with you, but I would ask you, as a matter of providing more advice to the House, whether you would look at the Hansard and consider whether these questions are indeed too long or whether they are actually quite reasonable in the context of questions. Would you do that for me?

Mr SPEAKER: Order! I would have thought that any member in the House would realise, by the number of times I have risen to my feet today questioning the length of questions, that I am suggesting that the questions are substantially too long.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It may well be that the time has passed for this, but during the first of the points of order from the co-leader of the Greens there was barracking of her while she was on her feet, including from the Deputy Prime Minister, the Prime Minister, and Steven Joyce.

Mr SPEAKER: Order! I thank the member for his assistance. I did not actually notice it at the time, but it is a reminder to all members that points of order should be heard in silence. We are going back to where we were, which was asking Eugenie Sage to repeat her question, but if she could manage to curtail it, I for one would be very, very grateful.

Eugenie Sage: Does the Minister agree with Sir Geoffrey Palmer, the architect of the Resource Management Act, when he said that her changes to the Act “will significantly and seriously weaken the ability of the RMA to protect the natural environment and its recreational enjoyment by all New Zealanders”?

Hon AMY ADAMS: No, but what I do agree with Geoffrey Palmer on is his quote where he says: “the proposals directed towards reducing and simplifying planning documents have

considerable merit. So do the proposals for a fixed time limit for the processing of straight-forward non-notified consents, and to improve transparency around costs and fees. … many of the [process proposals] will deliver improvements to the current processes [under the RMA] with limited impacts on environmental protection”. I do agree with that statement.

Employment Relations—Collective Bargaining

12. DARIEN FENTON (Labour) to the Minister of Labour: Does he believe that collective bargaining will increase or decrease as a result of his employment law changes in the Employment Relations Amendment Bill?

Hon SIMON BRIDGES (Minister of Labour): Neither.

Darien Fenton: Given that he says he will listen carefully to submissions, will he change the legislation to strengthen collective bargaining if the evidence confirms the advice from his own officials that under his changes fewer collective agreements will be concluded?

Hon SIMON BRIDGES: We are strengthening the collective processes, and I will be listening.

Darien Fenton: Has he seen OECD advice that the New Zealand labour market is one of the most deregulated labour markets in the developed world, with one of the lowest rates of collective bargaining; if so, why is he proposing law that will make collective bargaining harder than ever?

Hon SIMON BRIDGES: No, I have not, but, of course, we also have a relatively lower unemployment rate when compared with other developed countries as well, so it is possible there is a connection.

Darien Fenton: Is he aware of advice from the industrial relations centre at Victoria University of Wellington that collective agreements increase wages for workers on individual agreements as well; if so, why has he put up proposals to weaken collective bargaining, which will have a knockon effect for all workers?

Hon SIMON BRIDGES: We simply are not going to be doing that. The fact of the matter is that what we are doing is avoiding ineffective and unnecessarily protracted collective bargaining. That is good for everyone concerned.


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