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Questions And Answers - Tuesday, 17 October 2006

Questions And Answers - Tuesday, 17 October 2006

Questions to Ministers

Ingram Report—Prime Minister's Statement

1. Dr DON BRASH (Leader of the Opposition) to the Prime Minister: Does she stand by her statement in relation to Noel Ingram’s report into allegations concerning Taito Phillip Field that “Dr Ingram found that no conflict existed, or appeared to exist, between Mr Field’s private interests and the use of his influence as a Minister.”; if not, why not?

Rt Hon HELEN CLARK (Prime Minister): Yes.

Dr Don Brash: What is the Prime Minister’s response to the assertion of Mr Sunan Siriwan, made on Television One’s Sunday programme, that Taito Phillip Field, then a Minister in her Government, promised Mr Siriwan a work permit for New Zealand in return for slave labour in Samoa?

Rt Hon HELEN CLARK: My response is that all such allegations should go to the police.

Dr Don Brash: Does the Prime Minister see any irony in the fact that her Government, which pretends to have such strong views about employment law, has amongst its number a man who employed Mr Siriwan and his partner in exchange for food and board?

Rt Hon HELEN CLARK: I do not have any evidence of an employment relationship. I suggest the member take his matters up with the police.

Dr Don Brash: What is the Prime Minister’s response to the revelation on Television One’s Sunday programme that Mr Siriwan has sworn an affidavit alleging that he was told what to say to the Ingram inquiry?

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Rt Hon HELEN CLARK: My response is that that allegation has gone to the police.

Dr Don Brash: What faith can New Zealanders have in the Prime Minister’s half-million-dollar Ingram inquiry in light of the clear allegation that one of her Labour members of Parliament pressured a key witness to lie to the inquiry?

Rt Hon HELEN CLARK: If the member has that concern he should put it to the police. I note that he generally has no confidence in the police—this Government does.

Dr Don Brash: Does the Prime Minister now regret setting up a toothless inquiry with weak terms of reference, which was designed to cover up activities of one of her MPs and former Ministers; and does she wish to express regret to the New Zealand public for the way in which she has handled this matter?

Rt Hon HELEN CLARK: There was obviously no such inquiry, and I repeat Dr Ingram’s words: “Even if I had possessed the power to administer oaths, and to compel the attendance of witnesses and the production of documents, the process of inquiry may not have been significantly more satisfactory.”

Health and Fitness—Schools

2. Hon MARIAN HOBBS (Labour—Wellington Central) to the Minister of Education: What is the Government doing to support schools to promote healthy eating and encourage students to become more active?

Hon STEVE MAHAREY (Minister of Education): I have a healthy answer. The Government is investing $67 million over 4 years in a campaign to improve nutrition and physical activity amongst young New Zealanders. Initiatives that support schools and early childhood services to play their part include nutrition guidelines, a food and drink classification system, school-based health promotions, professional development for teachers, a $3 million regional nutrition fund, and high-profile events to encourage students to get involved in learning about good nutrition.

Hon Marian Hobbs: Other than walking the talk, what has the response been to the Labour-led Government’s commitment to improving nutrition in school and early childhood environments?

Hon STEVE MAHAREY: I certainly would urge members of Parliament to walk the talk on this particular issue in order to give young people a good example. The response from both the education and the health sectors has been along those lines—overwhelmingly positive. The campaign has been endorsed by the Heart Foundation, the Medical Association, food industry groups, the Post Primary Teachers Association, the New Zealand Educational Institute, and teachers and principals. Many schools around the country, of course, have already taken up this challenge. One example is the success of the Government’s Fruit in Schools programme, which, my colleague Pete Hodgson announced today, will double in size. Reports from 80 schools that run the programme include reduced absenteeism, increased attention in class, healthier children, and students encouraging the whole family to improve their nutrition.

Hon Brian Donnelly: Will the Minister consider compensating schools through increased operational funding, for the reduction of revenue they will confront from no longer selling goods, either in canteens or through fund-raising activities, that could be considered to be unhealthy?

Hon STEVE MAHAREY: The campaign contains some money that may be helpful to schools that are in that situation. But most schools that have already gone down this track have found from their experience that they do not lose money; they just sell different goods from their tuck shops, and, as a result, gain the same kind of revenue.

Sue Kedgley: Is he concerned that, despite the very innovative Fruit in Schools programme, every week New Zealand’s primary and immediate schools sell around 56,000 pies but just 4,000 pieces of fruit; and what work is being done to help to turn these numbers round?

Hon STEVE MAHAREY: Yes, of course, we are concerned, because we want to ensure that what is sold on school-grounds is healthy. So as part as the Mission-On campaign the Government, and the Green Party, of course, recently announced a $3 million-a-year nutrition fund to help schools and early childhood services become healthier eating environments for children. That funding was secured by the Green Party as part of its post-election agreement with the Government. It will be available from term 1 next year, and supports school and student-led initiatives such as healthier choices in the school canteen, shared fruit breaks for students, and water-only schools. That is a good, practical Green-led initiative.

Sue Kedgley: Is he concerned that these excellent healthy eating messages and initiatives in schools are being undermined by some of the sponsorship activities in schools carried out by companies—for example, fast-food companies giving away vouchers for hamburgers, chips, and pizzas as rewards for good behaviour—and would he therefore consider moves to make our schools commercial-free zones?

Hon STEVE MAHAREY: Yes, there are concerns about the promotion of particular foods to young people—food that may be high in salt, fat, or sugar. We will be working with the schools on guidelines for what should be consumed on school-grounds, as well as guidelines on what can be sold on school-grounds. We hope, as I mentioned before, that a much healthier eating environment will come out of that.

Election Advertising—Report of Controller and Auditor-General

3. GERRY BROWNLEE (Deputy Leader—National) to the Minister of Finance: What steps, if any, will the Government take to address issues raised by the Controller and Auditor-General in his report on election advertising?

Hon Dr MICHAEL CULLEN (Minister of Finance): I will be introducing a bill this afternoon on this matter, to be taken through all stages under urgency. The Government will then seek to participate with all others in the House in the broader review of the appropriations and related issues.

Gerry Brownlee: Can the Minister confirm that the validating legislation he is introducing today will not impose any legal obligation on parties to pay back taxpayers’ money, spent unlawfully; and is that because some of the parties involved have no intention of paying the money back?

Hon Dr MICHAEL CULLEN: Yes, and I am not aware of the position of all parties on this matter. I know what the position of my party is.

Rodney Hide: In light of the Government’s intention to pass legislation retrospectively validating unlawful spending by party leaders and members of Parliament, has the Government given any thought to validating legislation for art fraud, motorcade speeding, defamation, and the destruction of evidence; if not, why not?

Hon Dr MICHAEL CULLEN: No more than the outside contributions to MPs’ salaries.

Gerry Brownlee: Why does the Minister’s bill seek to validate the unlawful spending of Mr Peters and the New Zealand First Party, when Mr Peters is making it very clear that he has no intention of paying back the $160,000 he owes the taxpayers of New Zealand?

Hon Dr MICHAEL CULLEN: I am unaware of the truth, or otherwise, of that assertion. I do note that the bill validates all spending by the National Party, including that for which it has not refunded the Government, including, for example, its 2002 spending, which under the Auditor-General’s rules is clearly outside the scope. [Interruption]

Gerry Brownlee: I raise a point of order, Madam Speaker. Is that a parliamentary word, and would its translation be a parliamentary word, as well?

Madam SPEAKER: It is a term. If the member wishes a translation I am sure we have an interpreter here to give it to him, if he is not aware of it.

Gerry Brownlee: If the Labour Party is taking such a highbrow attitude to this, in saying that it will pay it back, why has it not included that in the legislation?

Hon Dr MICHAEL CULLEN: I have no parliamentary responsibility for that matter, at all.

Gerry Brownlee: I raise a point of order, Madam Speaker. The Minister has made the mistake of thinking I was asking him a question as the deputy leader of the Labour Party. I was not; I was asking him a question as Minister of Finance. He does have a responsibility for expenditure of taxpayers’ money, and the question asked why he has not included the repayment, or requirement for repayment, in his bill.

Hon Dr MICHAEL CULLEN: On a related matter, whether particular people refund the expenditure is irrelevant to whether the expenditure remains unlawful.

Gerry Brownlee: Why is the Minister then placing so much importance on the validating legislation to remedy a technical breach, and such little importance on the actual requirement to pay the money back when it was spent from taxpayers, quite unlawfully?

Hon Dr MICHAEL CULLEN: There is clearly no requirement at this point. The member misses the second part. At the moment it is quite clear that unless changes occur through statute, a trip like Dr Brash’s on parliamentary funding and at public expense to go and sign up a member of the National Party is outside the rules.

Gerry Brownlee: I raise a point of order, Madam Speaker. Are you going to accept that answer from Dr Cullen? It would seem to contradict your own determinations in these matters quite flagrantly, relating to parliamentary travel. I do not expect an answer right now, but I think any consideration of the determinations that you have made about parliamentary travel, as is appropriately your domain, would mean that Dr Cullen’s assertion is quite wrong.

Hon Dr MICHAEL CULLEN: Speaking to the point of order, I say that of course the member does have a fair point if what we do is accept the legal opinion from Mr Jack Hodder, so thoroughly condemned by Mr Brownlee last Thursday. If, however, we accept a legal opinion from the former Solicitor-General, and the Auditor-General’s opinion based on that, then clearly flying on taxpayers’ expense to sign up a National Party member and for apparently no other reason is clearly outside the rules. It is called electioneering.

Madam SPEAKER: Ruling on the point of order, I say that this is a matter for the Minister responsible for Vote Parliamentary Service. It is a matter that should appropriately be raised tomorrow at the Parliamentary Service Commission.

Gerry Brownlee: Can the Minister confirm that the tests set out in sections 72A to 72D of the validation legislation as presented would make the pledge card legal, and effectively overturns the Auditor-General’s concerns?

Hon Dr MICHAEL CULLEN: That would be the case, but the member should also note that section 7 lapses at the end of 2007. That was deliberately chosen to allow full review of the rules before election year.

Rates—Independent Inquiry

4. RODNEY HIDE (Leader—ACT) to the Minister of Local Government: What progress has been made on establishing the “independent inquiry into issues around local government rates funding” that he announced on 23 August 2006?

Hon MARK BURTON (Minister of Local Government): Good progress has been made. Consultation has been undertaken with a range of interested parties, and I have taken time to give careful consideration to the suggestions of other stakeholders and interested individuals such as the member who asks this question. I anticipate announcing the terms of reference shortly.

Rodney Hide: Is the expectation of ratepayers of rates relief from the Government a bit like the expectation that taxpayers have of the Labour Party ever paying back the money it owes—that it really is on the never-never and it is not going to happen?

Hon MARK BURTON: I can only say to the member that I anticipate the suit size I have shed in pursuit of a robust inquiry will ultimately bear more tangible benefit to the public of New Zealand than his extended forays on to the dance floor, which caused 12 weeks of parliamentary delay of his supposedly important parliamentary rates capping bill.

Mark Blumsky: Does the Minister agree with the Local Government Forum when it says: “It is particularly unfair that the Crown makes no contribution for its land, especially as local authority infrastructure can be put under severe pressure by the visitors who are attracted to national parks and other reserves.”; and will the inquiry address this burden on those who pay rates?

Hon MARK BURTON: When the inquiry looks at the burden of rates I am sure it will also be taking into account the fact that central government contributes 13 percent of the finances of local government—the highest it has ever been.

Hon Brian Donnelly: Has the Minister met with every party that has requested a meeting over the proposed terms of reference for the inquiry; if so, has he met with ACT?

Hon MARK BURTON: I can confirm that I have had meetings with any party that has sought a meeting; I can equally confirm that I have had no such meeting with ACT members—they did not ask for one. I received a letter from Mr Hide, and I replied to it.

Ingram Report—Prime Minister's Statement

5. Dr the Hon LOCKWOOD SMITH (National—Rodney) to the Prime Minister: Does she stand by her statement to the House on 16 May 2006, with respect to the Ingram inquiry, that: “Inquiries must always take the time required to get to the root of the matter.”?

Rt Hon HELEN CLARK (Prime Minister): Yes.

Dr the Hon Lockwood Smith: How well did the Ingram inquiry get to the root of the matter, when Noel Ingram “found no evidence to support an allegation that Mr Siriwan or Ms Phanngarm were promised work in New Zealand.”, yet Mr Siriwan has sworn an affidavit claiming that Taito Phillip Field promised him that if he went to work for Mr Field in Samoa, he would be issued with a work permit for New Zealand?

Rt Hon HELEN CLARK: Evidence, of course, is more than allegation, and I understand that the inquiry did speak to Mr Siriwan.

Dr the Hon Lockwood Smith: How effectively did the Ingram report get to the root of the matter, when Noel Ingram reported that: “Mr Field was unable to recall precisely when he did discover that Mr Siriwan was working on the house.”, and when Mr Siriwan has sworn an affidavit saying that he did a deal with Taito Phillip Field to go to Samoa in March to work on Mr Field’s house, in return for Mr Field obtaining a work permit for Siriwan here in New Zealand?

Rt Hon HELEN CLARK: There are, clearly, conflicting statements that the police will need to address in their investigation.

Dr the Hon Lockwood Smith: How effectively did the Ingram report get to the root of the matter, when Noel Ingram concluded: “The evidence does not support a finding that Mr Field knew that Mr Siriwan was working on Mr Field’s house …” when he met with the Associate Minister, Damien O’Connor, on 17 May 2005, yet Sunan Siriwan has sworn an affidavit confirming that he did a deal with Taito Phillip Field to go to Samoa in March to work on Mr Field’s house in return for Mr Field obtaining a work permit for Siriwan here in New Zealand?

Rt Hon HELEN CLARK: There are, clearly, conflicting statements that the police will need to address in their investigation.Dr the Hon Lockwood Smith: How effectively did the Ingram report get to the root of the matter, when Noel Ingram concluded: “I found no evidence that Mr Siriwan was influenced in his behaviour by the fact that Mr Field was a Minister.”, and when Mr Siriwan has now stated publicly that he went to Samoa “because Taito Phillip Fields—he’s a Minister. He promised me to come to work on his house and then he will give me the visa to return to New Zealand.”?

Rt Hon HELEN CLARK: I repeat that Mr Siriwan had the opportunity to speak to the inquiry and did not make those allegations then.

Dr the Hon Lockwood Smith: How well did the Ingram inquiry get to the root of the matter where the conflict existed, or appeared to exist, between Mr Field’s private interests and the use of his influence as a Minister, when Sunan Siriwan has now sworn an affidavit alleging he was told what to say to the Ingram inquiry and was under duress to say what he was coached to say?

Rt Hon HELEN CLARK: That affidavit, of course, has been referred to the police, who are making investigations.


6. RON MARK (NZ First) to the Minister of Police: How many gangs are known by police to exist in New Zealand, and what is the estimated number of affiliated members for each of these gangs?

Hon PHIL GOFF (Minister of Defence) on behalf of the Minister of Police: The Minister of Police is advised that a survey of organised crime in 2004 identified 69 gangs, with 32 of them being motorcycle gangs. The police have also advised that it is not possible, with the ever-changing face of gangs, to estimate the number of affiliates.

Ron Mark: How many gang affiliates were apprehended in the last financial year, and how does that figure compare with the number apprehended in previous years?

Hon PHIL GOFF: To the best of my knowledge, gang affiliation is not recorded against the names of convicted offenders. However, the member will know that there is a high correlation between gang membership and criminal offending. He will also know that our jails are full of offenders who are affiliated to gangs.

Martin Gallagher: How is the Government addressing the youth gang situation in South Auckland?

Hon PHIL GOFF: There are a number of different types of gangs, obviously, and the youth gang problem is different in nature from the problem of gangs that are involved in organised crime. But it is a serious problem in South Auckland, and in Ōtāhuhu. An action plan was launched last month in Counties-Manukau and Ōtāhuhu. That plan has the police working with non-governmental agencies, local bodies, and communities. It involves the setting up of youth action teams. It involves proactivity on the part of the police in dispersing large gatherings where violence is threatening. It involves the employment of youth workers responsible for juveniles who have been picked up by the police. It involves the vigorous policing of liquor bans, and a series of other intervention and prevention measures, run across a number of different Government agencies.

Ron Mark: How many of the gang affiliates apprehended in the last financial year were charged under section 98A of the Crimes Act, under which participation in a criminal gang is punishable by up to 5 years in prison; and how does that number compare with the number charged each year since the passage of the Transnational Organised Crime Bill, passed by a Labour Government in 2002?

Hon PHIL GOFF: Section 98A does make participation in an organised criminal gang a criminal offence, with the police being required to prove that the individual knows that his or her participation contributes to the occurrence of criminal activity. My understanding is that that section was used on a dozen occasions in 2004-05 and 18 times last year. The reason the police do not use that provision more often—among other reasons—is that if it is possible to charge the gang member with a violent, sexual, or drug offence, they will use that provision, because it carries a higher maximum sentence.


7. JOHN KEY (National—Helensville) to the Minister of Finance: Will the indexation of income tax thresholds go ahead in 2008, as promised in the 2005 Budget; if not, why not?

Hon Dr MICHAEL CULLEN (Minister of Finance): Any changes to tax thresholds will be considered in light of the final decisions around the business tax review.

John Key: Does he agree with the comments made by Peter Dunne, the Minister of Revenue, yesterday when he said: “The business tax reduction proposals I announced with Michael Cullen in the Business Tax Review in July will go ahead from April 2008, and they will be accompanied by personal tax adjustments as well …”—not just “might” but “will”—if not, why not?

Hon Dr MICHAEL CULLEN: I am sure there will be some business tax changes. As to whether all the ones in the business tax review will proceed, I would be rather doubtful. As I said, implications for income tax thresholds and other matters will be considered in the light of the outcome of that, and, of course, the fiscal situation at the time.

Charles Chauvel: Has he seen any reports from the export sector on the importance of getting decisions around tax policy right?

Hon Members: Ohh!

Hon Dr MICHAEL CULLEN: They have woken up at last; it has taken a long time today. I have seen a number of reports, including one from the chairman of Fonterra, highlighting the need to ensure that undue pressure is not placed on the export sector. Certainly, excessive fiscal loosening, which pushes up the pressure on interest rates and the exchange rate, will not help the export sector in current circumstances.

John Key: Does he agree with Peter Dunne that not only will tax cuts proceed on the back of very large surpluses but they will be the largest tax cuts since 1996; in which case, would he be so kind as to tell the House just how large those tax cuts in 2008 will be?

Hon Dr MICHAEL CULLEN: It is not the purpose of my life to be kind to that member.

John Key: Is the reason the Minister protested so loudly and stomped his feet up and down last week about tax cuts not because the tax cuts are not affordable—because the leader of New Zealand First, Winston Peters, knows they are affordable; the Minister of Revenue, Peter Dunne, knows they are affordable; and his own Prime Minister has been out telling people they will be taking place in 2008—but because when one is at the end of one’s political career one likes to defend what one has done, or, in his case, not done, rather than what a Minister of Revenue and future Minister of Finance may do in 2008?

Hon Dr MICHAEL CULLEN: One of the important differences between that member and me is that I am happy in my job and want to continue in it.

John Key: Can the Minister of Finance therefore confirm that he is the only person who is happy he is in his job—because no one else in New Zealand is?

Hon Dr MICHAEL CULLEN: Unfortunately I cannot confirm that. Indeed, more recent opinion polls seem to show growing approval of the Government’s economic performance. But I do note that just at the point where it looks a little more likely there may be some taxation changes, a number of commentators are starting to warn against them. That is precisely what one would expect would happen.

John Key: Did the Minister meet with Moody’s rating agency yesterday, and did he ask it about the impacts of a modest tax cut on New Zealand’s rating?

Hon Dr MICHAEL CULLEN: Not particularly, in terms of the meeting. Moody’s—

Madam SPEAKER: Other members in the House would like to hear the Minister’s answer.

Hon Dr MICHAEL CULLEN: The member might know that when rating agencies call they largely ask the questions and I supply the answers. What the agency wanted assurance about was that there would be no sudden lurching around in the Government’s fiscal policy, and I was able to give it that assurance.

John Key: When the Government rolls out tax cuts in its 2008 manifesto, in the miraculous way that it found the cash to extend Working for Families and to offer zero percent student loans, who does he think should actually take credit for that: the New Zealand First leader, Winston Peters; the United Future leader, Peter Dunne; or the Prime Minister, who is out there telling people that tax cuts will take place in 2008?

Hon Dr MICHAEL CULLEN: There is one thing I am very sure about: if there are very large tax cuts, everybody will try to take credit for them; if there are not, I will take the sole credit, I am sure.

John Key: Who does he think will actually announce the tax cuts to be announced in 2008, as part of the Government’s election manifesto: Phil Goff, Trevor Mallard, or any of the other pretenders to his job?

Hon Dr MICHAEL CULLEN: The only young pretender I know in the House is opposite me, and he looks really silly in a kilt.

Defence Force—Progress

8. JILL PETTIS (Labour) to the Minister of Defence: What further progress is he anticipating in strengthening and rebuilding the New Zealand Defence Force?

Hon PHIL GOFF (Minister of Defence): The 2006 long-term development plan update was released today and records major progress in rebuilding the New Zealand Defence Force after National halved expenditure on defence as a percentage of GDP in the 1990s. The plan lists 13 major projects that have been approved by Government and are now in the acquisition phase, five projects that have been approved in principle by Government, and 12 in the capability development phase. Seven new projects have been added to the plan, including infrastructure projects at Devonport and Ōhakea, major upgrades for the Anzac frigates, replacement of pilot training aircraft, and the possible acquisition of a new satellite communications system.

Jill Pettis: Have final decisions been taken on the purchase of light utility training helicopters to go into service alongside the NH90s?

Hon PHIL GOFF: Final decisions have been made by Cabinet to purchase six light utility training helicopters to replace the Sioux helicopters. They will have capabilities far in excess of the existing aircraft. They are expected to cost up to $110 million and will be a major asset, complementing the decision and the contract signed to buy eight NH90 medium utility helicopters.

Question No. 6 to Minister

RON MARK (NZ First): I raise a point of order, Madam Speaker. The Minister of Police has given an answer to one of my questions, which I think he needs to reflect on, and to possibly make an adjustment to.

Madam SPEAKER: Would the member please be seated. Points of order are heard in silence. That is the last warning. Would Mr Mark please be succinct in his point of order.

RON MARK: I seek leave of the House to table answer to written question No. 286 from the Minister of Police, which states: “Statistics on gang affiliations are recorded by the police.”

Leave granted.

Workforce Taskforce (Health)—Terms of Reference

9. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: What are the terms of reference for the new health Workforce Taskforce, and when were these advised to the task force?

Hon PETE HODGSON (Minister of Health): The terms of reference are concerned with ways to streamline medical education and training. They were first advised to task force members before they accepted appointment.

Hon Tony Ryall: Has the Minister seen reports that the junior doctor shortage has received crisis levels, with one in four junior doctor positions vacant at Middlemore Hospital, one in eight vacant in Waitematā, and at least 30 junior doctor vacancies in Christchurch; and how bad are the junior doctor vacancies at other district health boards and nationally?

Hon PETE HODGSON: Yes, and I have seen quite a range of reports refuting those assertions.

Maryan Street: What reports has the Minister received on support for the workforce task force?

Hon PETE HODGSON: The task force will be, or has already been, in discussions with the New Zealand Medical Association, the Association of Salaried Medical Specialists, the Medical Council of New Zealand, the aforementioned Resident Doctors Association, the Clinical Training Agency, and so on. The support for the task force from the medical community, unfortunately, has not been echoed by Tony Ryall and the National Party. Mr Ryall called the task force members, who include some of New Zealand’s most respected clinical leaders, a bunch of do-nothing bureaucrats. That is unfortunate.

Barbara Stewart: Can the Minister assure us that the transformation of the Health Workforce Advisory Committee into an action committee with a new name will result in the promised major changes in the way we train our doctors; and when will these changes be implemented?

Hon PETE HODGSON: Yes, I can. Indeed, the task force is charged with taking a range of options already presented to the Government by earlier studies and turning them into a concrete way forward for the Government. I am confident that it will deliver just that.

Hon Tony Ryall: Does the Minister really deny that there is a crisis in the junior doctor workforce, that district health boards are being forced to employ locum junior doctors, sometimes at twice the rate they would pay for a full-time junior doctor, and that the latest data show that the cost of locums in public hospitals has rocketed up by 62 percent in Waitematā, by 67 percent in the Hutt Valley, by over 40 percent in the Bay of Plenty, and has more than doubled in the capital in the last 12 months alone; or will we see in the next few weeks another U-turn from this Minister, as we did on the general practitioner shortage, the elective services crisis, and the promise that Labour would not pay back the pledge card money?

Hon PETE HODGSON: There have not been any U-turns on general practitioner training or, indeed, on elective surgery. There have been no U-turns. The member just needs to pay a bit more attention to his job, a little more attention to his portfolio, and to try to get some health policy out sometime. In respect of the number of New Zealand graduates who apply for jobs in our hospitals, all I can quote is the district health boards’ lead negotiator in the junior doctors’ negotiations, who said there had been no change in the number of New Zealand graduates applying for jobs in our hospitals. The figures have not been finalised yet, although reports suggest that only six doctors out of a graduating class of nearly 300 are looking for work other than in New Zealand.

Hon Tony Ryall: Is he sure that it is the Government’s tactic to deny any crisis in the junior doctor workforce, despite the number of applications for junior doctor positions being at a new low and the fact that we are rapidly losing many of our junior doctors to Australia—or is this like the Labour pledge card tactic, where it was reported in the country’s largest newspaper that party strategist Pete Hodgson had been made to look an idiot by going on television at his leader’s behest to steadfastly maintain Labour would not pay back the overspending, and, when he did front up, the hapless Hodgson had to admit that he had not been briefed on all the tactics by the Beehive’s ninth floor—a great strategist?

Hon PETE HODGSON: Just a couple of points in respect of that roundabout question on the workforce of New Zealand’s health system. Firstly, I myself do not know how many junior doctors are leaving New Zealand and going to Australia. I am advised that the number is six out of 300. Secondly, in respect of the pledge card, one thing that I think is worth pointing out is that this Government has put out a pledge card before every election, has been elected on each occasion, and on each occasion has kept every one of its pledges—and it will continue to do so proudly.

Tariana Turia: Tēnā koe, Madam Speaker, tēnā koutou katoa. What work is being undertaken to implement the broad, overarching goal in He Korowai Oranga to increase the number and improve the skills of the Māori health and disability workforce at all levels?

Hon PETE HODGSON: I suspect the member is already aware of a Māori health workforce action plan that, of course, has been taken around the country by my colleague Mita Ririnui and others over recent months and has received wide acclaim.

Hon Tony Ryall: When New Zealand most needs to recruit and retain junior doctors in order to stem the outflow to Australia and the increasing number of vacancies in our public hospitals, why is there an increasingly acrimonious negotiating relationship in the health sector; and, whatever his answer may be, why should we accept it, when the last time he took a firm position the Prime Minister hung him out to dry, saying his promise not to pay back the money was wrong and he was operating outside instructions—basically, that he made it up?

Hon PETE HODGSON: In respect of the last part of the question, I suspect it was because she thought I was dry enough already. In respect of the first part of the question, this Government does not say that New Zealand has enough doctors. We have never said that New Zealand has enough doctors. This Government has increased training for New Zealand doctors. My colleague Annette King increased the number in 2004—the first time any Government had increased the number of doctors in training for about 20 years, including the 9 years when that member was a lacklustre, unimportant part of a National Government.

Tariana Turia: Given the Minister’s response to my earlier question, when he said that Mita Ririnui has been going around the country on the issue that I had asked him about, can he tell me whether Mita Ririnui has advised him that 50 percent of Māori midwives have left the health workforce in the last 2 years; and what actions will the Government be taking to respond to that calamity?

Hon PETE HODGSON: No, he has not. Indeed, if the member’s assertion is accurate, it is certainly a cause for concern. She may wish to approach me.

Ron Mark: I raise a point of order, Madam Speaker. On 10 October, in question time, a point of order was raised by Nandor Tanczos, one of the politest MPs in this House, and that point of order was preceded with a comment from yourself to him—a pre-emptive warning—that said: “This had better be a point of order.” Straight after that point of order, a point of order was raised by Gerry Brownlee that was anything but a point of order, for which you gave no admonishment. Now, just prior to this question, I sought to raise a point of order. I had barely started when I had an interruption, which you dealt with—and I thank you for that. You then cautioned me that I should be succinct. Madam Speaker, if you were to go back and play through the television footage of question time on those three particular instances—and a dozen since then from Gerry Brownlee, in particular, and the National Party in general—I put it to you that it might be seen that the minor parties have been treated by you in some way differently from the major parties. I ask you to contemplate that and to give that some thought in the actions you take from hereon in.

Madam SPEAKER: I thank the member. That is not a point of order.

Dr Jonathan Coleman: How can the House have confidence in any answer this Minister gives, when he appeared on television saying that Labour would not be paying any money back, and the Prime Minister then said that Mr Hodgson was not under any instruction or encouragement to make that statement and that statement was wrong; and is being publicly hung out to dry by the Prime Minister not a sign that confidence in this hapless Minister continues to erode, right from the back benches all the way to the front?

Hon PETE HODGSON: Struggling though I am to find any link between this issue and the health workforce issues facing New Zealand, I say it is my—[Interruption]

Madam SPEAKER: I must say that question was wide of the original question, but I had asked the Minister to respond—and I would also ask members to refrain from barracking again, so that the rest of us can hear the answer.

Hon PETE HODGSON: The answer to the question is that the statement was made on radio, not television—and that was only the first thing that the member got wrong in framing his question.

House Prices—Treasury Investigation

10. GORDON COPELAND (United Future) to the Minister of Finance: Is work being carried out by the Treasury on a possible link between continuing high house prices, artificial constraints in the supply of land and the price of housing; if so, what is the current status of that work?

Hon Dr MICHAEL CULLEN (Minister of Finance): Treasury, obviously, is involved in a wide range of work on housing, but it is not currently working on the specific matter raised by the member.

Gordon Copeland: Does the Minister agree that raising the official cash rate has done little, if anything, to dampen the property market, and is it possible that the variable most responsible for continuing high house prices may be the restraints placed on the supply of land for new housing?

Hon Dr MICHAEL CULLEN: No, I do not agree with the latter point. I think one of the problems is that with the high proportion of fixed-rate mortgages, it sometimes takes quite a long time for monetary policy tightening to flow through into household incomes and disposable incomes. There are signs that it has been occurring in recent months. I think the problem with the member’s assertion is that, presumably, it would lead to the logic that one should have a variable land supply as a means of moderating demand and supply within the economy, which I think could be pretty difficult to work in practice.

R Doug Woolerton: Is the Minister concerned about the potential loss of valuable, highly productive land if constraints were to be removed from city housing expansion?

Hon Dr MICHAEL CULLEN: The member raises actually a very important and interesting point—that it is all very well to look at the housing issue from one specific side, but there are a whole range of other issues around land use that also have to be considered. One of those is the maintenance of land in a productive capacity in the rural sector, and at a reasonable enough price for the productive sector to be able to make a profit out of that land.

Sue Bradford: Is work being carried out by Treasury on a possible link between the way property investors can claim tax losses against their investment and against their income tax, and rising housing unaffordability; if not, is the Government considering making any changes in this area?

Hon Dr MICHAEL CULLEN: On many occasions these issues have been looked at by Treasury, and, obviously, suggestions come forward from the general public. I think the conclusion that tends to emerge at the end of the day is that it does not seem to make a lot of difference. Countries like Australia, which have heavy stamp duties on housing and which have a quite different kind of capital gains tax regime, have at least as marked housing cycles as New Zealand does, so it does not seem to be a particular answer to the actual problem in that respect.

Gordon Copeland: In the light of that response, is the Minister aware that in Australia the Federal Government is now giving a lot of attention to the freeing up of land for housing, does he see a role for Treasury in making housing more affordable for first-time homeowners, and would that include a rigorous economic analysis of any link between rising house prices and the availability of land for new subdivisions?

Hon Dr MICHAEL CULLEN: The Government is already taking a number of actions that, over time, will assist in the affordability of housing for first home owners, which, obviously, is where the key concern should be. After all, once one is into the first home, then rising house prices is an entry on both sides of the ledger from the point of view of most families, depending on which part of the country they are living in. But again—going back to the previous answer—it is important to be careful in this respect. The Australians do have, of course, a lot more land to free up, but they are also running into enormous problems around water supplies, not least because of urban demands.

Sue Bradford: Is any work being carried out by Treasury on a possible link between the lack of a capital gains tax and continuing high house prices here; and does the Minister accept that a capital gains tax on property sales apart from the family home could help to make housing more affordable again?

Hon Dr MICHAEL CULLEN: I think it is extremely hard to make that connection between a capital gains tax and the affordability of housing, in so far there has never been a theoretical argument put forward about a capital gains tax on housing. It is more in the direction of a level playing field around investment; it is not around the notion that it will make houses cheaper. Indeed, it is very hard to see how it would necessarily make houses cheaper.

Keith Locke: What concerns does the Minister have about extending the urban limit, in addition to the matter raised by Doug Woolerton—such as, the cost to New Zealand in extra Kyoto Protocol carbon credits from allowing urban sprawl to continue largely unchanged in places like Auckland, and the fact that it makes it more difficult to establish viable public transport system to replace some of the longer car journeys from the suburbs?

Hon Dr MICHAEL CULLEN: Again I think that is a very good point. Obviously, unlimited urban sprawl simply raises the difficulties around providing adequate public transport, which is already a major issue in terms of public transport in Auckland because of the very large amount of urban sprawl and the distances to be covered in relation to the size of the population. We are very different from, say, compact-style European cities. So there are a lot of factors that need to be taken into account. It would be very undesirable to seek short-term solutions for a particular point in the housing cycle, which would have long-term damaging consequences from the point of view of New Zealand’s social, economic, and environmental development.

Te Ururoa Flavell: What advice has Treasury provided to respond to the damning finding in the Social Report 2006 that the proportion of low-income households who are spending more than 30 percent of their incomes on housing is over twice as high as it was in 1988, and that of those, Māori are highly overrepresented?

Hon Dr MICHAEL CULLEN: It underlines the importance of policies such as the Working for Families package, other means to assist with housing acquisition, the rates rebate scheme, and a whole range of measures targeted to try to ensure that people on low to modest incomes are able to be in a better position to afford housing. Of course, as we move to the next stage of the economic cycle and monetary policy eases back again at some point in the future, that housing affordability index will show, again, quite a significant change. It is a very cyclical measure of what is happening in society.

Corrections, Department—Confidence

11. SIMON POWER (National—Rangitikei) to the Minister of Corrections: Does he have confidence in his department; if so, why?

Hon DAMIEN O'CONNOR (Minister of Corrections): Yes, but there is always room for improvement.

Simon Power: How can the Minister be confident in his department when the indicative cost for Spring Hill prison was not known until June this year, 20 months after earthworks began, and the indicative cost for Otago prison, also known as the “Milton Hilton”, was known only in May, 17 months after physical work began; and did Cabinet know that the estimates it was being given every time the Minister asked it for more money were not even based on agreed costs?

Hon DAMIEN O'CONNOR: All of these issues have been thoroughly canvassed by the State Services Commission. Treasury is also inquiring into the processes that effectively managed one of the largest building projects in this country. Those four new prisons have been, and will be, completed on time. I think that is a major achievement.

Simon Power: Can the Minister confirm that the State Services Commission report states that the indicative target out-turn costs should have been calculated before construction began, because the delay meant that contractors were paid based on costs they claimed, without any assurance that those costs were reasonable and with no incentives to save money; and how can the public be certain that contractors were not creaming it at taxpayers’ expense during that hiatus?

Hon DAMIEN O'CONNOR: The inquiry by the State Services Commission uncovered no extortion by any contractors. The report did state that without the collaborative working arrangement management system, it was unlikely that these projects would have been completed on time. They have been and will be completed on time, and that is a major achievement.

Simon Power: How can he be confident in his department when a report by Opus International Consultants, done for Treasury, stated that it could not find any clear rationale for the decision to adopt collaborative working arrangement contracts for the construction of new prisons, that it was “untested in New Zealand”, and “a significant departure from the previously agreed, and well-tested, methodology”?

Hon DAMIEN O'CONNOR: This was, effectively, one of the largest construction projects undertaken by the Government in this country. The collaborative working arrangement was a new management regime. Internationally, there are many other variations of that regime to manage such large projects. The State Services Commission, and Treasury, I am sure, as identified, have said this was an appropriate method of management.

Simon Power: Can the Minister confirm that even before the collaborative working arrangement for the earthworks at Spring Hill could be signed off, the cost estimates were already $9 million over budget, which led a Treasury official to state, in an email: “I can’t see how Corrections can enter into a contract that knowingly exceeds the amount Cabinet has specifically allocated for Spring Hill.”?

Hon DAMIEN O'CONNOR: I am sure that email from a Treasury official will be part of the investigations. I await the report from Treasury. The report from the State Services Commission stated the collaborative working arrangement was appropriate for a project of that size.

Simon Power: Can the Minister confirm the finding of the State Services Commission that there is no recorded decision by the project steering group to adopt the collaborative working arrangement methodology, which was “heavily dependent” on the advice of the project director, John Hamilton, and the New Zealand expert on collaborative working arrangements, Stewart Rix—who, according to answers to my written questions, has benefited by $1.3 million plus expenses, to date—because the Department of Corrections had “very little knowledge and understanding of collective working arrangements”; and how can he maintain that this methodology has not lost the taxpayer hundreds of millions of dollars in budget blowouts?

Hon DAMIEN O'CONNOR: I ask the member to read, and quote, the full report in this House. That report did not expose any major problems. It did, however, identify that at early stages of the project there were shortcomings, and changes were made. I am confident that the completion of these projects, on time, will be acknowledged as a major achievement for the Government and the corrections system.

Rates Rebate Scheme—Response

12. STEVE CHADWICK (Labour—Rotorua) to the Minister of Local Government: Has he received any reports on the response to the Government’s newly expanded rates rebate scheme?

Hon MARK BURTON (Minister of Local Government): Yes, despite the opposition of National and Act to the rates rebate amendments to extend coverage earlier this year, rates rebates totalling over $26.9 million have been approved for some 59,560 New Zealand households, in just the first few weeks of the 2006-07 year.

Steve Chadwick: How does this compare with the level of rebates for 2005-06?

Hon MARK BURTON: This compares with the 4,200 households that received a rebate for the whole of the 2005-06 year. In other words, there has been a fourteenfold increase in households receiving rebates and an almost fortyfold increase in the total value of rebates provided, in just the first few weeks of the 2006-07 rating year.


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