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Questions And Answers - Tuesday, 20 March 2007

( Uncorrected transcript—subject to correction and further editing. )

Tuesday, 20 March 2007
Questions for Oral Answer
Questions to Ministers

1. Taxation—Economic Effects
2. Corrections and Justice, Ministers and Chief Executives—Confidence
3. Land—State-owned Enterprises
4. National Certificate of Educational Achievement—Cambridge Examinations
5. Mount Ruapehu—Lahar
Question No. 2 to Minister
6. Corrections, Minister—Confidence in Department
7. State Highways—Land Transport Management Act
8. Early Childhood Education—Free Hours Providers
9. Electricity—Renewable Resources
10. Television New Zealand—Confidence
11. Health Ministry—Treaty of Waitangi
12. Pharmacy Contract—District Health Boards

Urgent Questions
13. Labtests Auckland—High Court Decision

Questions for Oral Answer

Questions to Ministers

Taxation—Economic Effects

1. TIM BARNETT (Labour—Christchurch Central) to the Minister of Finance: What reports has he received on the role of taxation in the economy?

Hon Dr MICHAEL CULLEN (Minister of Finance): Not surprisingly, I have received many, many reports on that matter, but one in particular was from a person who said that right now is not the time for extensive tax cuts but that a better approach is to use taxation as a “tool to promote savings, investment, and growth”. This quote was from Bill English, who, of course, now has to explain why he voted against the savings and investment tax cuts introduced last year.

Tim Barnett: What reports has the Minister seen on an alternative approach to the role of taxation in the economy?

Hon Dr MICHAEL CULLEN: Again, very many, but in particular I have seen a report from the Timaru Herald last week that outlines a radical overhaul of the tax system at a cost of up to $4 billion a year. This came from the other National Party leader, Mr John Key. But I have also seen a report from the Rodney Times showing Mr Key posing next to a giant pair of flip-flops, which themselves have flipped and flopped to the top of his electorate office in Helensville. I suppose a pair of flip-flops is an appropriate symbol for the new leader of the National Party. [Interruption]

Madam SPEAKER: Members will be leaving the Chamber if they continue with those interjections.

Hon Bill English: Why is the Minister so reluctant to discuss his own economic policies, such as the worst productivity figures we have ever had, which were produced last Friday, and the growing concern about the spending surge that he is planning over the next 18 months, which some people speculate could rise as high as $10 billion?

Hon Dr MICHAEL CULLEN: In terms of the so-called spending surge, the main concern came from a Mr Phil Rennie, who previously worked for Mr Bill English and now poses as an independent commentator on the economy. As for the issue of productivity, I remind the member that when there is an economic slow-down but labour is not shed, then labour productivity growth falls. It could have been much higher if the unemployment rolls had risen very dramatically, as no doubt the member would favour.

Gordon Copeland: Has the Minister seen reports about yesterday’s Budget in Canada, which supports families with a parent at home through tax exemptions; and if Canada—with its similar culture to New Zealand—supports families with a stay-at-home parent, is it not time that New Zealand followed suit through income splitting?

Hon Dr MICHAEL CULLEN: Income splitting is only one answer and for many families would not be terribly effective. Much more effective for many families has been the Working for Families tax credit programme, for which I am grateful to the member for supporting. That gives a real choice to many women, in particular, as to whether they should stay at home to care for their children or go out to paid employment. They have that choice in a way that was not possible before Working for Families came into operation.

Rodney Hide: Has the Minister seen the report by the Centre for Independent Studies that states that core Government expenditure in 7 years has increased in real terms by $20 billion, and the report by Treasury in 2005 stating: “There is little information to indicate that New Zealanders are getting more services and better results from the public sector for the large increase in resources provided.”; and does he not find it concerning that such a large increase of expenditure can occur for no apparent gain?

Hon Dr MICHAEL CULLEN: Firstly, we have again the so-called Centre for Independent Studies’ Mr Phil Rennie, who previously worked for Mr Bill English. So it is certainly a centre for studies, but not for independent ones, in that respect. Secondly, the member is wrong in saying “real”; it is nominal growth of $20 billion. If one imagines no increase in spending since 1999, then that means no increases in the numbers of teachers, police, and many other people, and no wage increases for anyone in the public sector. I suspect we would have few doctors, nurses, teachers, Child, Youth and Family Services workers, Department of Corrections officials, or many others left working.

Corrections and Justice, Ministers and Chief Executives—Confidence

2. JOHN KEY (Leader of the Opposition) to the Prime Minister: Does she have confidence in her Ministers of Corrections and Justice and their chief executives, in light of her announcement yesterday of a wide-ranging review of the justice system?

Hon Dr MICHAEL CULLEN (Acting Prime Minister) on behalf of the Prime Minister: Yes, because the two Ministers are hard-working and conscientious, and because the two chief executives are fully capable of implementing Government policy.

John Key: If the Prime Minister has so much confidence in Damien O’Connor and the Department of Corrections, why has she announced a review of the department “because she is concerned about the overall operation of the system”—what are her reasons?

Hon Dr MICHAEL CULLEN: One of those issues is clear. In 1995 the then National Government split the Department of Corrections and the Department for Courts from the Ministry of Justice. The member, of course, was overseas at the time, and was therefore unaware of that.

Madam SPEAKER: It is impossible to hear again. When members ask a question, will they please have respect for those who are answering, so the rest of us can hear the answer.

Hon Dr MICHAEL CULLEN: One of the issues is whether the creation of headless bodies and bodiless heads is the best way to run the public service. But separating policy from operations was the fad in the late 1980s and 1990s.

John Key: Is it not the truth that if the Prime Minister thinks this was a problem dating all the way back to 1995, she has been in office for 8 years and has had 8 years to sort it out?

Hon Dr MICHAEL CULLEN: One review has already been undertaken. It concluded that the Department for Courts should be re-merged, but at that point officials were strongly of the view that the Department of Corrections should not be. The Prime Minister has signalled that that matter will now be the subject of a full review, the terms of which will be decided when she returns from the United States.

Hon Annette King: Does the Prime Minister agree with the comments made by the then Department of Corrections chief executive under the National Government that the fences around Pāremoremo prison were not meant to stop prisoners escaping, but just to slow them down on the way out?

Hon Dr MICHAEL CULLEN: That was indeed National’s approach to open Government when it was in office. We have added 17 kilometres of new fencing around Pāremoremo and other prisons, and have moved to single points of entry for prisons. As a result, escapes from prisons are now down by 70 percent from their level under the National Government.

John Key: Does the Prime Minister remember saying to the House last week that she had “great respect” for the corrections CEO, Barry Matthews, and would she like to explain why, if she has such great respect for him, she is now looking to abolish his job?

Hon Dr MICHAEL CULLEN: Structural reviews are made in a way that does not necessarily affect the individual. It is not a matter of whether that person is the right person; it is whether the structure is the right structure. Unlike the Opposition, this Government does not go around all the time attacking public servants who cannot defend themselves.

John Key: Could the Prime Minister explain what the difference is between a structural review and a back-down and a U-turn, because on this side of the House this looks exactly like a back-down and a U-turn?

Hon Dr MICHAEL CULLEN: For a man who has adopted flip-flops as his symbol, that is an extraordinary question to put in this House. The member, of course, is part of a party that separated the Department of Corrections out from the Ministry of Justice when it was in Government. The National Party is the party that has flip-flopped; Labour never supported that separation in the first place.

Ron Mark: Would the Minister not agree with New Zealand First that in light of the series of failures within the Department of Corrections and within the Ministry of Justice, and the plethora of reforms and legislative changes that have occurred in the ministry over the last 20 years, it would be foolish not to go back to the very genesis of some of those reforms, and try to identify where we have created the gaps between statutory responsibility and operational control, with a view to doing something meaningful about that, as opposed to sitting on the sidelines and whining, carping, and grandstanding?

Hon Dr MICHAEL CULLEN: I think the member makes a useful, if somewhat lengthy, point. I would add that the review that the Prime Minister is considering is not just around the structural issue of the place of corrections in relation to the Ministry of Justice.

John Key: If the Prime Minister is concerned enough about corrections to instigate a structural review of the Department of Corrections, but according to her neither Damien O’Connor nor Barry Matthews is to blame, then who actually is responsible for the shambles in the department?

Hon Dr MICHAEL CULLEN: As the Prime Minister, I think, has made reasonably clear, obviously a number of mistakes were made. But, at the end of the day, the person responsible for the murder was Graeme Burton—nobody else.

John Key: Does the Prime Minister agree with Damien O’Connor, when he said a few weeks ago that the idea of folding corrections back into the Department of Justice was “policy on the hoof”; in which case, why is she now doing just that?

Hon Dr MICHAEL CULLEN: When one thinks about the terms of review and the reviews that are to be undertaken, that is not policy on the hoof; that is preparing policy properly. The member’s question implies that Governments could never change direction, at all, because to do so would be policy on the hoof. That is a very stupid comment from a member who clearly has flies on him.

Land—State-owned Enterprises

3. R DOUG WOOLERTON (NZ First) to the Minister for State Owned Enterprises: How much land held by State-owned enterprises has been sold since 2000 and what is the total value of any such land that has been sold into foreign ownership?

Hon TREVOR MALLARD (Minister for State Owned Enterprises): I am advised that Contact Energy was given a right of first refusal—granted in 1996— for over 381 hectares of State-owned enterprise land, which it is in the process of exercising. I understand that it is proposed that at least some of this land be used for roading and geothermal power generation purposes. The land that this commitment relates to has a market value of $9.261 million. Other than that, I am advised that approximately 33,000 hectares of State-owned enterprise land has been sold since 2000; none of this land has been sold to foreign investors.

R Doug Woolerton: Is the Minister satisfied that Landcorp’s practice of selling land with the sole purpose of maximising returns to the Crown is aligned to the will of the New Zealand public, which is growing increasingly nervous about the loss of significant land to foreign investors; if so, why?

Hon TREVOR MALLARD: The short answer to the member’s question is no, I am not satisfied that Landcorp’s policy is properly aligned to the wish of New Zealanders. But I would put it more in the terms of the conservation values, recreation values, the retention of some coastal areas in public ownership, and the need to have more reserves, rather than the question of foreign ownership. Actually, I think my colleague the Minister of Finance, Dr Michael Cullen, if he were asked this question, would say that some of the things one can wrap around foreign ownership are a lot tighter than when land is sold to New Zealanders. He could well be right, and it may well be that some of the lessons from that can be imported back into the Landcorp sale processes.

R Doug Woolerton: Have changes to the Overseas Investment Act reduced the amount of land being sold by State-owned enterprises into foreign ownership; if not, is he at all concerned that the changes have not worked to ensure the Kiwi way of life is not being flogged off to the highest bidder?

Hon TREVOR MALLARD: It is a bit hard to reduce from nothing.

Madam SPEAKER: Could the Minister just amplify his answer.

Hon TREVOR MALLARD: Well, I did say in my substantive answer that none had been sold into foreign ownership from State-owned enterprises. If I am asked whether we can reduce that, I suppose we could. We could have Landcorp out there buying from people who have bought in the private sector, but I think that that is probably not really its role at the moment.

Gerry Brownlee: How much additional land does the Minister think the State-owned enterprise New Zealand Post will need to buy in order to get its chain of plastic tiki - selling stores across the country under the banner Real Aotearoa?


National Certificate of Educational Achievement—Cambridge Examinations

4. KATHERINE RICH (National) to the Minister of Education: Does he stand by his reported comments that schools moving towards adopting Cambridge exams did not indicate a lack of confidence in NCEA; if so, what exactly does it indicate?

Hon STEVE MAHAREY (Minister of Education): In the last few days I have become aware, through news reports, of a small number of schools that have expressed concerns about the National Certificate of Educational Achievement (NCEA) and are therefore considering offering overseas exams. They are, of course, entitled to offer overseas exams if they want to, as long as they continue to assess students using NCEA.

Katherine Rich: If everything is progressing swimmingly with NCEA, why are so many more schools looking at offering alternative exams?

Hon STEVE MAHAREY: I do not think it is so many more. A few are listed in the paper. I thought one of the people who put his finger on one of the problems with the system is John Langley, who leads the college of education as part of Auckland University. He recently pointed out in an article in the New Zealand Herald that one of the difficulties schools have is that, of course, parents did not sit their exams under NCEA, and one of the ongoing debates is about their ensuring they get the best possible qualification for their children. As John Langley pointed out, it therefore rests on the profession, which has pretty much universally agreed that standards-based assessment is the way forward, to get out and talk to parents about this issue, because we need to build confidence in the assessment system.

Moana Mackey: What reports has the Minister had on confidence in NCEA?

Hon STEVE MAHAREY: I have had good reports—in fact, I would say very good reports—from the 2006 NCEA exam season. The results show that student achievement has continued to improve. There is growing confidence in both the internal and exam processes. Feedback from teachers to the New Zealand Qualifications Authority was positive. Minor problems were fixed straight away. Of course, as people know, other changes are yet to come, but a number of recommendations were made last year, and over the summer a group has been working with the New Zealand Qualifications Authority on a range of design features. I am hoping to receive their report soon. I hope they will also help to restore confidence in our standards-based assessment system.

Hon Brian Donnelly: Has the Minister considered scrapping the standards-based level 4 scholarship assessment, with its inevitable low levels of reliability, and instigating a statistically moderated scholarship examination in which our top academic students would compete on a level playing field for the monetary rewards available, as was proposed in the initial NCEA policy papers; if not, why not?

Hon STEVE MAHAREY: No, I have not considered that. As the member will know, the improvements that are taking place around scholarship seem to have restored confidence in that system, and that is what we will stay with at the moment.

Katherine Rich: As the Minister has now told the House that the problem happens to be in the minds of parents who are putting pressure on schools and raising concerns about NCEA, what does he say to Brent Lewis of Avondale College, a decile 5 State school, who says that there are major concerns amongst himself, his staff, and parents and that there is significant pressure from the community to offer an alternative to NCEA?

Hon STEVE MAHAREY: It is worth just saying, as a preface to the answer, that I did not say what the member said. She makes a profession of putting words in other people’s mouths. In answer to the second part of the question, I think there are concerns about NCEA in the community, particularly amongst parents who want the best for their children—as no doubt the member does—but I think we all agree that we are going down the right road with NCEA. We want a standards-based assessment system. The operations of that system are very good, and that has been happening for 2 years now. We have some design features to go, and one of the problems that the New Zealand Qualifications Authority will have to deal with this year is getting out and making sure that people have the system fully explained to them.

Katherine Rich: Members in this House just heard the Minister, in answer to a previous question, talk about initiatives he has undertaken to “restore confidence” in NCEA; is he not admitting that at present there is not enough confidence in NCEA, if he is doing all this work to restore that confidence?

Hon STEVE MAHAREY: I am not sure where the member has been over the last few years, but the New Zealand Qualifications Authority and NCEA have been major, controversial issues. Over the last 2 years we have moved to ensure that the operation of the system works well, and it does. We have changed a range of design features, and they have been supported; we have some more to do yet.

Katherine Rich: If there is such great confidence in NCEA, why has the Minister just told the House today that he is working to “restore confidence” in NCEA?

Hon STEVE MAHAREY: As I said, the member does make a profession of putting words in people’s mouths. [Interruption] I pointed out to the member—and if members on the other side were quiet enough they could listen to the answer, as they want the answer—that I think we have arrived at a point now where the profession has a lot of confidence in what we are doing. It agrees we are going in the right direction. But I think that after all the troubles we had in rolling out this system there is a way to go yet to ensure that parents—and I include employers—understand this system fully. After all, most of them would have done their examinations under the old School C and UE system. This is new to them, and we need to make sure they understand it.

Katherine Rich: If the Minister’s message today is that he is going out there to restore confidence in NCEA and that the problem lies in the heads of parents—not in principals and teachers—why does he continue to wax lyrical about improvements in results; and can he guarantee that those students are actually learning more and not just gaining more credits?

Hon STEVE MAHAREY: I will have to do what I usually do with this questioner, which is to say that in the first part of the question, once again, she put words in my mouth that were not there. No one is saying that the problem is in the heads of parents; we are saying that the experience of people of that generation is quite different to the experience of NCEA. It does mean we have to get out and talk to people about how this system works.

Rodney Hide: I raise a point of order, Madam Speaker. We have a problem with this Minister—and I am not taking sides here. If a member puts a question to a Minister that is factually not true, then the correct way of addressing that is through a point of order. If the question is correct, it is to be answered as best the Minister can. The idea that a Minister can repeatedly reply to a member’s question by somehow questioning the accuracy and veracity of the question is actually out of order and, of course, defeats question time. It burns up the time for Opposition members’ questions, and we have seen that, repeatedly, here today. If the Minister is correct, then he should make a point of order about it.

Hon Dr Michael Cullen: The member is totally and utterly wrong, in that regard. The ability to question, by way of answer, the veracity of the facts in a question has been there for a very long time. Indeed, if the member cared to think, he would see that his own approach would take a great deal more time. If a point of order ensued every time there was a doubt about what was asked in a question, then the question, presumably, would have to be disallowed, we would carry on starting again, and we would go on and on. The one thing that always holds up question time is a whole series of points of order, and one thing that I think has gone very well in recent times is that we have managed to reduce quite significantly the number of points of order at question time.

Hon STEVE MAHAREY: I point out, in relation to the point raised by the member, that one of the things that often happens in the House now, which did not use to happen, is that people will rise and start not with a question but by prefacing a question with a long preamble of how they would like the answer to have been for them, and then ask the question. I think it is reasonable under those conditions for Ministers to say: “I didn’t say that.”

Madam SPEAKER: I thank members for their comments. The first point is that Ministers can refute any factual statement in their reply. It is also true that there has been a practice on all sides to start not with a question or answer but by making a factual statement, a statement, or an assertion. That, of course, then invites a reply. So I ask members to comply with the Standing Orders in asking questions and to attempt to ask them succinctly.

Mount Ruapehu—Lahar

5. JILL PETTIS (Labour) to the Minister of Conservation: What reports has he received on the operation of the Mount Ruapehu lahar warning and containment systems?

Hon CHRIS CARTER (Minister of Conservation): As members will be aware, on Sunday morning the tephra dam holding back Mount Ruapehu’s crater lake collapsed, and the resulting lahar safely travelled down the Whangaehu valley, exactly as had been predicted and planned for. I would like to place on record the Government’s thanks to officials from the Department of Conservation, civil defence, the Police, Transit, Toll, the Horizons Regional Council, and the Ruapehu District Council, who instituted what are regarded as world best-practice lahar warning and containment systems.

Jill Pettis: Can the Minister advise us what other reports he has seen?

Hon CHRIS CARTER: I have seen reports rubbishing the Government’s investment in effective safety systems as playing “Russian roulette with people’s lives”, and describing central government’s financial support for the local council’s disaster planning as guilt money. These hysterical and alarmist comments were from National’s Nick Smith. Perhaps Dr Smith could apologise to the hard-working staff of the Department of Conservation, civil defence, the Police, Transit, Toll, the Horizons Regional Council, and the Ruapehu District Council who laboured through his political grandstanding to create a first-class lahar response programme that kept our community safe.

Hon Dr Nick Smith: Would it not have been more sensible, as National proposed, to remove—[Interruption] I will start again, Madam Speaker.

Madam SPEAKER: Please ask your question.

Hon Dr Nick Smith: Well, I am actually interested in the substantive issue.

Madam SPEAKER: Would the member please just ask his question. As he knows, interjections are permitted as long as the question can be heard. The member can be heard.

Hon Dr Nick Smith: Would it not have been more sensible, as National proposed, to remove the ash dam at the mouth of the crater lake with earth-moving machinery at an estimated cost of $180,000, as recommended by geotechnical experts, rather than spending $10 million on constructing bungs, raising bridges, and creating the alarm system to try to manage the lahar after it had broken, as that option would have cost less and substantially reduced the risk both to people and to property?

Hon CHRIS CARTER: Certainly not. All of the technical advice stated that slicing a trench through the wall of the crater lake would have been extremely dangerous for the staff involved, was not a long-term solution, and risked creating a more serious lahar in the future. I remind members of the House that the member who raised this question was once Minister of Conservation, had the chance to do that, did not, and now is politically grandstanding. It was comments like that, made before the last election, that have led to his facing a $15 million lawsuit for making outrageous claims about building products.

Hon Dr Nick Smith: I seek the leave of the House to table an assessment of the environmental effects, and the options, that recommended the removal of the tephra dam. The assessment was from the experts—

Madsam SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Question No. 2 to Minister

SIMON POWER (National—Rangitikei): I seek leave to table—[Interruption]

Madam SPEAKER: Do members want to remain in this House or not? They know that when a member is seeking leave there should be no interruptions.

SIMON POWER: I seek leave to table the Hansard from 15 June 1995, when Paul Swain indicated to the House that the Labour Opposition would be supporting the Department of Justice (Restructuring) Bill—contrary to what Dr Cullen said earlier today.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

SIMON POWER: I seek leave to table the Hansard from 28 June 1995 on the third reading of the same bill, where the Hon Trevor Mallard said:“We took the advice of our justice spokesperson who was supportive of the Bill. On that basis the Opposition caucus is supporting the legislation.”

Leave granted.

Madam SPEAKER: I remind members that normally documents are tabled at the end of the question.

Corrections, Minister—Confidence in Department

6. 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. [Interruption]

Simon Power: Supplementary question?

Madam SPEAKER: If members did not interject, members would hear when I call them.

Simon Power: How can he have confidence in his department, when last month he greeted National’s suggestion that the Department of Corrections be merged back into the Department of Justice with the statement that it was “an extraordinary proposal” and “has all the hallmarks of policy being created on the hoof”; and is this what he told the Prime Minister yesterday after she announced that she was open to the idea, while he was standing on the tarmac just before her plane took off?

Hon DAMIEN O'CONNOR: I was astounded. I did consider it to be policy on the hoof, because I do not think the National Party has any policy.

Hon Marian Hobbs: What is he doing to ensure that his department improves its performance?

Hon DAMIEN O'CONNOR: Much work is being done, particularly in the area of parole. As I said last week, parolees will have to report more frequently, probation officers will take quicker action following breaches, and the Department of Corrections will provide better information to the Parole Board before parole is granted. The Government is also looking at possible amendments to the Corrections Act to strengthen the hand of the department in dealing with contraband.

Simon Power: Does he stand by his claim that corruption amongst prison staff is not widespread and is not rife, when currently 11 guards at Rimutaka Prison and two at Christchurch Prison have been suspended, and when Public Prisons Service General Manager, Harry Hawthorn, has stated: “I expect there will be more.”, and that they are just “starting to expose the problem.”?

Hon DAMIEN O'CONNOR: I stand by that statement. There are over 5,000 staff in the Department of Corrections. Wherever we identify possible corruption or any breaches of protocol, we will stand those people down, investigate, and, if necessary, prosecute. That does not mean to say that this problem is widespread.

Hon Annette King: Has he been informed of a lack of confidence in the Department of Corrections in the 1990s because prisoners kept escaping, to the extent that the then Minister of Corrections, Nick Smith, said in 1998 that prison security needed upgrading; if so, what changes have been made to address this National Party legacy?

Hon DAMIEN O'CONNOR: I did indeed do some investigation. In the 2-year period up to the change of Government in 1999 there were 38 escapes from 17 jails—one even involving a prisoner with an injured knee, suffering from asthma, and carrying an intravenous drip, who out-sprinted the prison guards. Since then, the Labour-led Government has put up 17 kilometres of fences around our prisons, and the escape rate has dropped by 78 percent.

Simon Power: Does the Minister agree with Public Prisons Service General Manager, Harry Hawthorn, that some of the corruption at Rimutaka had been going on for up to 2 years and it was a long time for it to go on without managers picking it up; if so, does not this confirm the view of one former employee that this sort of activity does not go on without the knowledge of management and that corruption goes right up the chain?

Hon DAMIEN O'CONNOR: I do not accept that ridiculous statement made by the member. Contraband has been part and parcel of prison challenges for many, many years. Positive drug tests in prisons, under that Government, were at a level of 34 percent. We have reduced that to a rate of 13 percent. We will continue to identify, pursue, and prosecute any people, be they prisoners, be they visitors, or be they prison officers, for bringing any contraband into our prison system.

Simon Power: Does the Minister have any advice as to who the new Minister in charge of the supposed superministry of justice will be; will it be the Minister of Justice himself, the Hon Mark Burton, or, as most of the public now suspect, a “reheated” Sir Geoffrey Palmer?

Hon DAMIEN O'CONNOR: Simon Power believes that I am the Minister responsible for the entire justice sector. I am responsible for the Department of Corrections—but then again, Simon Power gets most things wrong, just as he did in advocating for New Zealand to go to the war in Iraq.

Simon Power: Can he confirm that on Friday his department cleared doctors at Rimutaka Prison of smuggling the necessary genetic material to allow Peter McNamara to father a child from inside prison; if so, is he prepared to state now in the House, categorically, that none of the staff in his department was involved?

Hon DAMIEN O'CONNOR: Mr McNamara has made several claims. One is that the doctor participated. The doctor absolutely refutes that claim. Investigations continue, and we hope to identify what the real facts of the situation are.

State Highways—Land Transport Management Act

7. JEANETTE FITZSIMONS (Co-Leader—Green) to the Minister of Finance: Does he agree with officials’ advice to the Cabinet economic development committee that “Singling out the activity class of State Highway construction for Crown guarantee would signal a preference for funding State highways over all other forms of transport.”; and that “This may be perceived as being inconsistent with … the LTMA [Land Transport Management Act 2003] or integration of the transport sector”?

Hon Dr MICHAEL CULLEN (Minister of Finance): No and yes, but only in so far as almost anything is capable of having misconceptions about it.

Jeanette Fitzsimons: How can Land Transport New Zealand comply with the requirements of the Act—to contribute to an integrated and sustainable transport system—when he has pre-empted its statutory power to balance funding across roads, public transport, walking and cycling, and safety programmes; and is not the organisation just a rubber stamp for his road-building programme?

Hon Dr MICHAEL CULLEN: No; no for a very simple reason. Land Transport New Zealand still produces the plan. What we did in the Budget was to provide a funding guarantee for the State highway part of it, because that was the residual under previous funding arrangements, and a revenue guarantee for the rest of the plan.

Charles Chauvel: How does the rate of increase in the Government’s investment in State highways in Auckland compare with the rate of increase in investment in public transport in Auckland?

Hon Dr MICHAEL CULLEN: Since coming to office we have nearly quadrupled the investment in State highways in Auckland, but over the same time we have increased spending on public transport in Auckland by over 12 times.

Jeanette Fitzsimons: How can he say that Land Transport New Zealand still produces the land transport programme of funding, when under the new arrangements Transit’s 5-year business plan must be the base for Land Transport New Zealand’s programme, and when last year he announced the funding for a whole group of State highways, before Land Transport New Zealand had published its programme?

Hon Dr MICHAEL CULLEN: The projects referred to were all taken off the existing Transit list. This enabled us to guarantee that the projects would proceed within the time frame, whereas otherwise there was a very high risk, as we had already experienced that year, of projects coming on and off the road transport construction programme. That leads to huge uncertainty around planning even public transport.

JEANETTE FITZSIMONS: Would not a transport programme that was aimed at carbon neutrality and sustainability consider the overwhelming evidence and prioritise less carbon-intensive modes such as public transport, cycling, walking, and travel-demand management, rather than the biggest road-building binge in New Zealand’s history?

Hon Dr MICHAEL CULLEN: That is one reason why spending on public transport in Auckland has grown over twelvefold, and on State highways by fourfold, over the period. Secondly, the vast range of service users require to use roads—plumbers, electricians, and painters are not going to travel by train or by bus to get from one place to another within Auckland. Thirdly, large numbers of people do not have ready access, yet, to sufficient modes of public transport. At the end of 2005 we dedicated an additional $600 million to rail construction in Auckland. Last week we announced that this is going to lead to the reopening of the Onehunga line and the construction of the Newmarket Railway Station. Perhaps the Greens could have taken some credit for that, instead of simply moaning about something else not happening.

Jeanette Fitzsimons: Are there any other Government activities that have similar open cheque-book funding guarantees when costs escalate, and if we do not do it for hospitals, schools, and State houses when their costs go up, why does he think we should do it just for roads?

Hon Dr MICHAEL CULLEN: We do it for large areas of Government spending. We have a tertiary education system that has a demand-driven funding model, until that changes next year. The spending on benefits and on New Zealand superannuation is demand driven, with statutory adjustments to that spending on the basis of the consumer price index and, in the case of New Zealand superannuation, wage-related matters. There are other large areas where that happens within Government spending. The difference with roading is that the way the plan worked was that a set amount came in, which itself was not set, because if road usage fell off or oil prices went up, the revenue went down. As a consequence of that, as public transport was the first cab off the rank in terms of allocation of money, roading became a residual on a variable item. No other area of major spending in government that requires long-term planning has that kind of characteristic around it.

Early Childhood Education—Free Hours Providers

8. PAULA BENNETT (National) to the Minister of Education: How many early childhood education services have opted in to the Government’s 20 free hours a week policy?

Hon STEVE MAHAREY (Minister of Education): Based on current enrolments, up to 92,000 3 and 4-year-olds will be eligible to receive 20 hours’ free education in teacher-led early childhood centres from 1 July this year. As I am sure the member is aware, from next month parents will be able to pick up forms to indicate that they want to take up the scheme, and from May services can start to apply for funding. Only at that point will we have a final idea of the numbers that are likely to enter the scheme, although I have to say that at the moment I have very positive feedback from around the country, so I remain optimistic.

Rodney Hide: I raise a point of order, Madam Speaker. That question was down on notice, and there is some interest in the answer. The Minister explained that more childhood centres will enrol over the coming period, and I think everyone accepts that, but he obviously has a number as to how many have enrolled now. With a question on notice, he should give that number or explain why he cannot.

Hon STEVE MAHAREY: Speaking to the point of order, I make clear to the member that no parent can enrol for this scheme until April, and no centre can enrol for this until May. It is very difficult to count people who have not yet enrolled.

Paula Bennett: Why, when parents phone the 0800 number about 20 free hours and ask which centres are offering the hours, are they given a list of all centres in the area, whether or not they have opted in?

Hon STEVE MAHAREY: Because all 92,000 current 3 to 4-year-olds are eligible for this amount of money. That is why people are referred to all of those centres, as the member would know if she had followed the policy.

Dr Ashraf Choudhary: What reports has the Minister seen regarding alternatives to the very popular policy of 20 hours’ free early childhood education?

Hon STEVE MAHAREY: I have seen a number of reports. They include reports welcoming the policy, scrapping the policy, replacing the policy with a cumbersome bureaucratic tax credit system, expanding the initiative to all centres that cater for care or education, and arguing that policy detail should be kept from parents. All of those confusing and contradictory reports come from one member or another of the National Party. That confusion, I am sure, will be cleared up with the next election, when I will lay money on the fact that the National Party will have flip-flopped and will support this policy.

Paula Bennett: Why does the website, reached by the “Free ECE” link on the Ministry of Education’s website, list all teacher-led services as centres that will provide 20 hours free, including the thousands that have not opted in, like the 107 Auckland kindergartens?

Hon STEVE MAHAREY: Because they can do so.

Paula Bennett: What is the Minister’s response to the concerns raised by an Auckland kindergarten, which wrote to him and said: “It is unreasonable of the Government to tell our parents to come into the kindergarten asking for their 20 free hours, when we can’t afford to offer it and we know it will be detrimental to the level of quality that we offer our parents and their children.”?

Hon STEVE MAHAREY: I am not sure that there was a question there—it was a reading out of the quote. I ask whether there was another part to that in terms of a response. I thought that the member was going there.

Paula Bennett: I raise a point of order, Madam Speaker. It was quite a clear question, which I am happy to repeat for the benefit of the Minister. Obviously, he has asked for it to be repeated.

Madam SPEAKER: As I understood it, the question asked for a comment on that quote.

Paula Bennett: What is the Minister’s response to the concerns of an Auckland kindergarten, whose staff wrote to him and stated—

Madam SPEAKER: As I have said, the member’s question was clear to me. Would the Minister just respond to it, please.

Hon STEVE MAHAREY: I obviously missed the first part of the question. My response to that centre will be the same as it is to all centres. At the moment the Ministry of Education is discussing with centres face to face how the policy will apply. As I mentioned last week in answer to a question from the member, about 90 percent, I am told, of the people who come to those discussions leave saying that the policy is clearer to them and that now they can see how they can apply it to their centres. That centre might like to go to one of those discussions.

Paula Bennett: Why is it the Government’s strategy to get parents to ring centres and pressure them into accepting free early childhood education without letting them know that to opt in means that a centre will have to lower the quality standard of the care and education that it currently delivers?

Hon STEVE MAHAREY: That is not our strategy.

Electricity—Renewable Resources

9. STEVE CHADWICK (Labour—Rotorua) to the Minister of Energy: What reports, if any, has he received on the proportion of electricity which comes from renewable resources?

Hon DAVID PARKER (Minister of Energy): Statistics New Zealand has reported that increased hydro and wind generation in the December 2006 quarter resulted in 74 percent of New Zealand’s electricity being generated from renewable resources. New Zealand is a world leader in renewables; let us stay that way.

Steve Chadwick: Can the Minister please inform the House of recent reports on more renewables in the energy sector that are in addition to Contact Energy’s recently announced plan to invest $1.8 billion in new geothermal and wind generation?

Hon DAVID PARKER: The draft New Zealand energy strategy proposes that new electricity generation capacity meet the cost of its carbon emissions. In response, we have seen energy companies focus more on renewables and less on thermal energy. It is not just that Meridian Energy is carbon neutral and Contact Energy is spending $1.8 billion on renewables; Mighty River Power has cancelled plans to develop the Marsden B power station. The Government’s energy and climate change policies are working and show the importance of appropriate climate change policy settings across the economy.

Peter Brown: Will the Minister be more specific and tell the House how New Zealand stacks up internationally when it comes to electricity being generated from renewables?

Hon DAVID PARKER: In terms of the percentage of electricity being generated from renewables, New Zealand is third-highest in the developed world, after Iceland and Norway.

Television New Zealand—Confidence

10. Dr JONATHAN COLEMAN (National—Northcote) to the Minister of Broadcasting: Does he have confidence in Television New Zealand Ltd (TVNZ); if so, why?

Hon STEVE MAHAREY (Minister of Broadcasting): Yes, but I am watching with interest the changes being made by the new chair and the new chief executive that are designed to position TVNZ for the move into the new digital environment.

Dr Jonathan Coleman: Is the Minister satisfied that TVNZ will be able to launch its new, digital, 24-hour news channel by its target start date, despite the fact that TVNZ recently announced 160 redundancies and plans to slash its news budget by $10 million, and can he tell the House what that exact launch date will be?

Hon STEVE MAHAREY: Yes, I am confident that TVNZ is on target for its launch. It will be launching, first of all, its home channel—I have to get the exact date for the member, but I think it is around August—and I think the date for the news channel is around October. But I can get those exact dates for him.

Dave Hereora: What is TVNZ doing to ensure that its business remains healthy, with the increased competition from new technologies?

Hon STEVE MAHAREY: As we speak, TVNZ is launching TVNZ ondemand, which enables New Zealanders to watch television online. It is part of its 5-year strategic plan, and will deliver both commercial and public returns. TVNZ ondemand will initially feature around 300 videos from about 100 shows appealing to a wide range of tastes. I am sure that the selection covers the tastes of members in the House, and that they will be eager to go off and watch the programmes. Included are programmes such as Fair Go, Agenda, Eating Media Lunch, Praise Be, Treasure Island, and Mai Time.

Dr Jonathan Coleman: How many households will be receiving the new FreeView digital TV service when it launches in May, and if the Minister cannot give the House a number, how can he possibly justify the $104 million of public money he is spending on digital television?

Hon STEVE MAHAREY: I find the question extraordinary, because it indicates that perhaps the National Party does not want to see free-to-air television move from what is a redundant technology—analog—to a digital one. But, of course, if the member also followed through the logic of his question, he would know that the industry is the one to ask that question of. The FreeView platform, which runs it, and all of the free-to-air broadcasters have the obligation to provide a good-quality service technically, and to provide content that will attract people to see the service. On the kick-off date I doubt there will be very many people watching, but all of these services start that way, then hope to lift their audiences, and I imagine the same thing will happen here.

Dr Jonathan Coleman: When the Minister says it is a question for the industry, does that mean he is expecting the taxpayer to stump up the money for digital TV but he is interested only in taking the credit, and not in taking responsibility for ensuring that the $104 million being spent on digital TV actually delivers value for money?

Hon STEVE MAHAREY: This Government is very pleased to take credit for putting in an extraordinarily small amount of money—$25 million over 5 years. The member should go across the Tasman and have at look at what the Australians have paid, and have a look at what small countries like Finland have paid. The sum of $25 million is extraordinarily small to do what has to be done. The member’s questions are always prefaced by comments that imply that the National Party would like to see this country with some kind of dinosaur technology from the last century, rather than see it migrate into the digital age. If that is what the National Party wants, well, it goes with its dinosaur status as it is.

Dr Jonathan Coleman: Why is TVNZ engaging merchant bankers to purchase CanWest’s radio assets at the same time as TVNZ advertising revenues are in decline, Television One news viewing figures are dropping, the overall budget is being cut by $30 million, and 160 staff are being sacked; and is the Minister pleased with that?

Hon STEVE MAHAREY: TVNZ requested information for it to be able to evaluate whether it was a good idea to take up the option of CanWest’s sale offer. That was consistent with responsible business practice. I personally think that TVNZ came to the right decision when it decided not to go ahead with the offer.

Health Ministry—Treaty of Waitangi

11. TARIANA TURIA (Co-Leader—Māori Party) to the Minister of Health: Why, following the giving of “clear directions”, will the Ministry of Health “no longer make direct references to the Treaty of Waitangi or its principles in new policy, action plans or contracts”, and what is the basis for those directions?

Hon PETE HODGSON (Minister of Health): The Treaty of Waitangi is specifically recognised in the New Zealand Public Health and Disability Act 2000, and is given effect to by ensuring that Māori are represented on district health boards. It is also recognised in key health strategies, including He Korowai Oranga. However, strategies must be operationalised, which is why the district health boards are instructed to identify the specific actions that they are taking to improve Māori health and reduce inequalities.

Tariana Turia: Does the Minister recall his response on 20 June 2006 to my question regarding the removal of reference to the Treaty from health specifications that “there have been no instructions, and there are no plans to issue instructions.”, and what happened between June and December last year to make him change his mind?

Hon PETE HODGSON: What has happened is that the principles have been replaced is some contract documentation—there are a bit over 16,000 contracts within the health sector. When a provider is asked what it is doing for Māori, the answer sometimes is that it is following Treaty principles. Well, that will not do. At the operational level we want to see delivery to Māori, not an assertion that principles are being followed. In other words, we want to shift from high-level direction only, to having runs on the board. The principles themselves—I say to the member—have a rightful place, which is in the legislation. They are there, this Government put them there, they are staying there, and they are going nowhere.

Pita Paraone: Tēnā koe, Madam Speaker. Does the Minister agree that among the reasons that the Ministry of Health is moving away from direct reference to the principles of the Treaty of Waitangi is that those principles were never included in the Treaty itself, and are undefined and ambiguous, and that, with 21 district health boards, that leads to 21 different interpretations of those so-called principles; if not, why not?

Hon PETE HODGSON: In my view, the stronger argument is that if the Treaty and the principles surrounding it are to be found in Government documentation, they should be found at the statutory level, not at a commercial contracting level.

Te Ururoa Flavell: Kia ora, Madam Speaker; kia ora tātou katoa. Is the Minister aware of the recent statement from the chief executive of the Ministry of Education that removing the Treaty of Waitangi from the school curriculum was a blunder, and is he prepared to learn from that mistake and admit that removing reference to the Treaty from the top end of the health sector policy line is also a gigantic blunder; if not, why not?

Hon PETE HODGSON: Because there is a significant difference between a school curriculum and a series of commercial contracts.

Tariana Turia: Does the Minister agree with the statement of his predecessor, the Hon Annette King, that the “omission of any reference to the Treaty would be interpreted by Maori as indicative of a less than whole-hearted commitment to the principle of partnership and as such could be seen to be making a negative contribution to Maori health and well being.”; if not, why not?

Hon PETE HODGSON: I do agree with my predecessor, which is why, in the case of the health system, the Treaty is reflected in representation of Māori on all district health boards and, by supposition, on a number of the district health board committees that service those health boards. That is the partnership that the member speaks of, and that is the partnership that I am very comfortable with; it is in place and it is working. That does not mean that a high-level idea, such as the principles of the Treaty of Waitangi, is well placed in some thousands of commercial contracts.

Tariana Turia: I seek leave to table the Cabinet paper from the Hon Annette King, the then Minister of Health, entitled Treaty of Waitangi in Health Legislation, in which she covers the omission of reference to the Treaty.

Leave granted.

Pharmacy Contract—District Health Boards

12. Dr JACKIE BLUE (National) to the Minister of Health: What market analysis and consultation, if any, was undertaken by district health boards in the development of the proposed pharmacy contract?

Hon PETE HODGSON (Minister of Health): I am advised that district health boards and the Pharmacy Guild consulted on the contract for much of last year. As part of that process, district health boards sought cost information from the pharmacy sector.

Dr Jackie Blue: Why does the Minister think that the vast majority of pharmacies consider the proposed pharmacy contract to be unacceptable, with 91 percent rejecting the “take it or leave it” stance by the district health boards; and does he consider that the district health boards have employed good-faith negotiating principles?

Hon PETE HODGSON: Presumably because the pharmacy industry, if you will, wanted a price increase. Revenue increases for pharmacies come in two forms: price increases and volume increases. The member overlooks, and I suspect some pharmacies might overlook, the fact that the volume increases are about 5 or 6 percent per annum. That is the direct result of the Government’s Primary Health Care Strategy, of which I am very proud.

Barbara Stewart: Is the Minister concerned that the proposed fee freeze will seriously affect the viability of many pharmacies in rural areas that rely on the dispensing fee to remain in business, and that any pharmacy closures will further erode rural health services?

Hon PETE HODGSON: The member may not be aware that district health boards can add provider-specific terms and conditions to the national core contract from 1 March this year, including an adjuster to maintain access and geographic coverage—for example, in rural areas. That facility already exists, and it is used somewhat.

Dr Jackie Blue: Is the Minister aware that since 2003, while the number of prescriptions increased by 26 percent to 28 million, the dispensing fee has remained static, and that in the proposed pharmacy contract no allowance has been made for an increase in the fee for a further 2 years; does he think that is reasonable, considering that pharmacists have had to employ additional staff to cope with the volume increase, as well as to cope with inflation and compliance costs?

Hon PETE HODGSON: The member has more or less answered her own question. There has been a significant increase in the uptake of prescriptions presented to pharmacies over the years, as she has offered to the House. A 26 percent increase in revenue in that time is no small amount. To the extent that pharmacists must, if you will, work harder for that and provide both dispensing and advice, I thank them for their efforts. But the long and short of it is that that represents an increase in productivity. I thought the member was in favour of that.

Jo Goodhew: Can the Minister confirm that the medicine depots that he intends to replace more rural pharmacists with will be no different from a parcel depot and will, in effect, deny rural people access to the trusted health professional who is most often the first point of contact for health care?

Hon PETE HODGSON: The member has got hold of an agenda that is certainly not mine and certainly not one of the district health boards. Depots have been around in this country for decades. There is no particular intention to increase them.

Hon Tony Ryall: What confidence can the public have in these contract negotiations, in light of the unprecedented decision of the High Court in Auckland today to set aside the contract that the Auckland district health boards have awarded to Labtests Auckland; and does the Minister stand by the chairman of the Auckland District Health Board, Wayne Brown, who said in a public statement that Dr Bierre went beyond the statutory requirements in standing down from the board, and that he did not participate in any decisions, even though the High Court in Auckland has ruled in favour of the plaintiff because it was disadvantaged by Dr Bierre’s ability to use confidential information in the consortium proposal, despite what Mr Brown said?

Hon Dr Michael Cullen: I raise a point of order, Madam Speaker. I waited for the member to finish his question in case we got within the scope of the original question, which is about pharmacy contracts, not laboratory testing.

Madam SPEAKER: No, I agree with the member. It is about a pharmacy contract, and the member has already foreshadowed that he will seek to raise that matter in the House by leave later on.

Jo Goodhew: Will the Minister personally front up to public meetings in rural New Zealand and explain why he is prepared to incentivise general practitioners and midwives in rural areas but seems content to see pharmacists exit the primary health care team?

Hon PETE HODGSON: I will repeat to the member some advice that I gave a colleague in the House earlier. District health boards can add provider-specific terms and conditions to the national core contract, including an adjuster to maintain access and geographic coverage in rural areas. The member represents the part of New Zealand that is around South Canterbury. In South Canterbury, such contracts already exist. The member needs to get in touch with what is happening in her own electorate.

Jo Goodhew: I seek leave to table a press release in which the Rural GP Network says that a reduction in the number of pharmacies would pose a major threat to the health of the already vulnerable communities they serve.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Jo Goodhew: I seek leave to table a further press release in which a rural pharmacist says that district health boards need to realise chemists do more than just dispense medicine.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Urgent Questions

Labtests Auckland—High Court Decision

1. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: Does the Minister have confidence in the Chairman of the Auckland District Health Board, Wayne Brown, given that, in an unprecedented move, the Auckland High Court has set aside the contract that he was responsible for negotiating, exposing the hospital to considerable financial risk; does he have confidence in the chairman, now that the court has ruled that despite all the Minister’s assurances this contract cannot go ahead, because of the way it has been handled, with Dr Bierre’s conflict of interest, and the use of confidential information in his own bid?

Hon PETE HODGSON (Minister of Health): My focus, as the member might expect, is on ensuring that the people of Auckland receive community laboratory services, reliably, from 1 July this year when the current contract expires. I expect this to be the focus of the three Auckland district health boards involved, and I will be seeking advice on their intentions when the first round of conference calls has concluded.

Hon Tony Ryall: So will the Minister express confidence in Mr Wayne Brown, the Chairman of the Auckland District Health Board, who has taken a personal responsibility involved in this process?

Hon PETE HODGSON: The Auckland district health boards must now turn their immediate attention to securing community laboratory services from July for Aucklanders. My confidence in the boards will, of course, hinge on their ability to achieve that, and on their ability to repeat the request for proposals process—this time successfully.

( Uncorrected transcript—subject to correction and further editing. )

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