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Questions and Answers - 2 June 2009

Questions for Oral Answer
2 June 2009

Questions to Ministers

1. Superannuation—Commitments

[Uncorrected transcript—subject to correction and further editing.]

1. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Does he stand by all his commitments relating to New Zealand superannuation?

Hon JOHN KEY (Prime Minister) : Yes. My cast-iron commitment has always been that the Government will maintain payments at a minimum of 66 percent of the after-tax average wage, and that people will continue to be eligible for superannuation when they reach the age of 65. I am happy to say that as part of last Thursday’s Budget, future funding at this level is locked into the Government’s long-term spending path, and is reflected in all of the Budget’s projections.

Hon Phil Goff: Is the Prime Minister’s commitment to maintain superannuation entitlements as cast-iron as the personal written guarantee that he gave to New Zealanders just 6 months ago that he would give them specific tax cuts that they could trust and believe in, which he has now reneged upon?

Hon JOHN KEY: Firstly, I say that obviously there will be a delay in tax cuts. That was announced on Thursday. The overwhelming feedback I have had on Friday, Saturday, Sunday, and Monday has all been from New Zealanders thanking the Government for the economic leadership we are showing. New Zealanders are saying quite clearly how delighted they are that they have elected a National Government that has a good sense of priorities, and can lead New Zealand through these troubled economic times.

Hon Phil Goff: Why does the Prime Minister continue to pretend that the Government can go on meeting superannuation entitlements, when he has cut the funding that makes it possible to do that, when there is a $37 billion hole in the Superannuation Fund, and given that to make up that shortfall he will have to either cut entitlements or raise taxes?

Hon JOHN KEY: That question just shows the level of miscomprehension from the Leader of the Opposition when it comes to superannuation. Let us understand one point: prior to the Budget we thought the fund at its height would pre-fund New Zealand superannuation by 14 percent, but the new number from Treasury is only 12 percent. To put it another way, 88 percent of superannuation comes from the general tax base anyway, and one of the strongest ways to make sure we can ensure that future superannuation is there is to have a strong economy without having an indebted economy. That is exactly what we will be getting under National—not under Labour.

Nathan Guy: How does the Government intend to secure New Zealand superannuation entitlements in the future?

Hon JOHN KEY: New Zealand superannuation entitlements will be secured if in the mid-2020s the Government is in surplus, has a moderate level of debt, and is not burdened with high borrowing costs. That is what Treasury is now forecasting, thanks to the measures we have taken in the Budget, including temporarily suspending Superannuation Fund contributions. Therefore, far from putting anything at risk, the Budget actually secures future superannuation entitlements.

Hon Phil Goff: Was it similarly a miscomprehension by Richard Long and by Gareth Morgan in the Dominion Post this morning, when they described the Prime Minister’s pretence that he could maintain entitlements and cut funding as “Canute-like” and “Political cowardice”?

Hon JOHN KEY: The policies of the Government are written by the Government, not by independent commentators. All I can tell the Leader of the Opposition is that there will be no increase in the age of eligibility under a National Government—I cannot be sure about a Labour one—and there will be no difference in the 66 percent paid of the after-tax average wage. While we are looking at commentary, I suggest—and I would not strongly suggest this—that if members want to look at Phil Goff’s report, they will find that on page 2—

Keith Locke: I raise a point of order, Mr Speaker. I cannot hear a word back here, and I suggest, as the noise level rises, that you quieten members down a bit.

Mr SPEAKER: The honourable member makes a valid point. Members will please show just a little courtesy to the members at the back of the House, who struggle to hear.

Hon JOHN KEY: Mr Speaker—

Hon Trevor Mallard: He touches his nose when he’s about to lie!

Mr SPEAKER: Order!

Hon JOHN KEY: Sorry, Trevor? What was that, buddy? I go back to Phil Goff’s report. It states that the focus of my first Budget should have been on protecting jobs, and that it failed. The No. 1 way to see New Zealanders down the road from their jobs is if their businesses cannot be funded. That is what happens when we have a credit downgrade, and that is what we would have had under a Labour Government.

Hon Jim Anderton: Do the Prime Minister and his Minister of Finance intend to be in Parliament in their present positions in the mid-2020s to honour the commitments they have made today, or will an 11-year moratorium on Government contributions to the New Zealand Superannuation Fund, resulting in a $37 billion shortfall by 2030, not lead to significant changes like tax increases, lowering payment levels, and raising the age of entitlement; and if all of those changes are remotely likely, why does the Prime Minister not do the honourable thing and resign now, in order to meet the commitment he made before the election?

Hon JOHN KEY: Firstly, it is my intention to be here in 2020, but that, of course, is in the hands of the good people of Helensville and the National caucus. Secondly, that is 11 years away, which will make me by then—on my calculations—about 58 or 59, and I will know that I am 6 years away from getting New Zealand superannuation, which will be paid at the age of 65.

Hon Phil Goff: On what basis does the Prime Minister disagree with the Treasury official who sent an email to Television New Zealand describing his announcement on superannuation as a fraud—a $9.2 billion fraud—because that is the amount by which the return on investment and taxes on the superannuation contribution exceeds its cost?

Hon JOHN KEY: We utterly refute that that is the advice from Treasury. I suggest that the member looks at the official papers, where he will see that Treasury’s advice supported the view taken by this Government.

Hon Phil Goff: I seek leave of the House to table an email from a Treasury official to Television New Zealand that says that the New Zealand Government—

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection.

* Document, by leave, laid on the Table of the House.

Nathan Guy: To what extent in the first half of this century does the Superannuation Fund actually pre-fund New Zealand superannuation?

Hon JOHN KEY: The Superannuation Fund is actually a small part of the equation. Even if the Government continued to make full contributions the fund would, at most, pay for 12 percent of the annual cost of New Zealand superannuation, assuming everything went right in the fund’s return. That means, as I said earlier, that 88 percent of superannuation at any point in New Zealand’s future is paid from the general tax base.

Hon Phil Goff: Is the Prime Minister, in the interests of transparency and honesty, prepared to immediately release all of the Treasury advice that he and his Government has received on the implications, impact, and consequences of the actions he took in gutting the Superannuation Fund?

Hon JOHN KEY: I can assure the Leader of the Opposition that we will be releasing all of the Treasury papers—

Hon Member: When?

Hon JOHN KEY: Very soon. I strongly suggest that the Leader of the Opposition read them, learn something about economics, and then apologise to the New Zealand public for wanting to ensure that their credit rating was downgraded, that they had to pay more for their interest rates, that they could not borrow money, and that their jobs were put at stake. Those members are a credit card Opposition and they are proving it. In fact, their credit card is about to be cut up for a very long time.

2. Budget 2009—Reports

[Uncorrected transcript—subject to correction and further editing.]

2. CRAIG FOSS (National—Tukituki) to the Minister of Finance: What reports has he received on Budget 2009?

Hon BILL ENGLISH (Minister of Finance) : The reports we have received on Budget 2009 are almost all positive. Most ordinary New Zealanders understand that the Government has made pragmatic decisions that will keep this economy on the right track and ensure that they do not face large burdens of debt and higher interest rates in the future, which they would have done if the Government had not struck the right balance between supporting the economy in the short term, and supporting thousands of jobs, but in the long term making sure that our debt does not get out of control.

Craig Foss: What support does Budget 2009 provide for the most vulnerable in society?

Hon BILL ENGLISH: As I told the House last Thursday, protecting the most vulnerable has been a priority in Budget 2009. The Budget maintains New Zealand superannuation at 66 percent of the average wage, to be paid at age 65, and it maintains benefit levels, student support, and Working for Families. We have managed to do this despite facing the worst global recession since the 1930s, and despite having inherited an economy that was already in its fourth quarter of recession.

Hon David Cunliffe: Has the Minister seen the report from Television One’s NZI Business presenter CorinDann entitled “Super Fund suspension a big mistake?”, and does he agree that his Government has blown its credibility by suspending $37 billion worth of contributions over 10 years and showing no plan for how to make up the difference; if so, can the Minister confirm now whether he plans to vastly increase taxes on our children or to slash the pension available to baby boomers and seniors, in order to make the impossible happen?

Hon BILL ENGLISH: I have seen reports like that and I disagree with them. That member should go back and look at the legislation he voted for. It provides a mechanism to ensure that Governments that find they do not have surpluses with which to make contributions to the fund can suspend those contributions. I ask that member why he supported that then but does not support it now, when the Government is facing a decade of deficits.

Craig Foss: How does the Budget support jobs?

Hon BILL ENGLISH: The Budget supports jobs in a number of ways. Firstly, it supports them through the significant spending programmes that the Government has undertaken, including a major home insulation programme. Our intention is to spend $7.5 billion on infrastructure over the next 5 years despite the fact that the Government’s books are not in great shape. These measures will support thousands of jobs building and upgrading schools, roads, houses, and hospitals. The Government is also supporting jobs through the fact that, because we have debt under control, our credit rating has not been downgraded. That means that businesses will be able to access credit more easily that they would have, and New Zealand householders will face lower interest rates than they would have.

Hon David Cunliffe: Does the Minister agree with the Sunday Star-Timesbusiness columnist, Rod Oram, who said “by scrimping and saving to make the books look better he seriously set back efforts to make this a bigger and more resilient economy”, including his gutting KiwiSaver, scrapping the research and development tax credits, and allocating “a handful of uncoordinated strategy-devoid dollops of money for science”; does the Minister therefore agree that “Overall, one can only wonder how English has spent his first six months in office. … now that he has compromised the present and forfeited the future for New Zealand.”?

Hon BILL ENGLISH: I happen to disagree with Mr Oram. He seems to share the view of the Opposition that this is the time to be completely reckless—to borrow as much as possible, and to spend as much as possible. I tell him that both Mr Oram and the Labour Opposition are out of step with the New Zealand public, who have an instinctive and sensible grip of the issues.

Chris Tremain: What will the Budget’s effect on New Zealand’s credit rating mean for New Zealanders?

Hon BILL ENGLISH: The credit rating agency Standard and Poor’s made an announcement on Thursday that means that New Zealand is one of the few countries in the world whose credit rating appears to have improved, if only slightly, as a result of the Budget. That means that the people who lend us money from overseas, who take notice of credit ratings, will now be more willing to lend us money. A Treasury analysis shows that a downgrade could push interest rates up by as much as 1.5 percent. That would mean an extra $50 a week in repayments for a family with a $175,000 mortgage.

Hon David Cunliffe: How craven is that!

Hon BILL ENGLISH: Labour does not seem to be concerned at all about the costs. There is no doubt that it is quite clear now that anyone who supports Labour is supporting more debt and higher interest rates.

Mr SPEAKER: I ask the front benches on both sides to please show a little respect to their colleagues who are seeking to ask questions.

Chris Tremain: Does Budget 2009 continue the previous practice of making large, unfunded commitments?

Hon BILL ENGLISH: No, Budget 2009 stops the previous practice of making large, unfunded commitments. The Opposition has not stopped it, and I think the Prime Minister correctly labelled its approach as “Slap-it-on-the-bill-Phil”.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Do I need to take a point of order, or are we going to have some intervention at some stage from you to maintain order in the House?

Mr SPEAKER: The member has called for a point of order—

Hon Trevor Mallard: That was an offensive comment. It was way outside the Standing Orders, and you know it.

Mr SPEAKER: In fairness, objection has been taken to the comment. I ask the member to withdraw the comment.

Hon Gerry Brownlee: It is time those guys toughened up, and you too.

Mr SPEAKER: I have asked the member to withdraw the comment. I think it is not an unreasonable thing to ask, because offence was taken. We all know that in this House we are meant to use members’ correct names, and the name the member used was not the full name of the honourable Leader of the Opposition. I ask him to withdraw the comment.

Hon BILL ENGLISH: I withdraw.

Mr SPEAKER: Thanks very much.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. If you had listened earlier this afternoon, you would have heard many potentially offensive comments being made on the other side of the House. We tend to ignore them, because that is what the rest of the country does. It would only be fair if you were prepared to pull those members up a little more quickly, particularly the member who was just offended by a comment that was freely used in the debate last week with no offence being taken then. I can only assume that the weekend commentary has made that particular name offensive.

Mr SPEAKER: Members, there is no need to interject while a point of order is being heard. The point raised by the Hon Gerry Brownlee is correct. It is true that I have heard some highly questionable interjections coming across the House. I tend not to pull the House up on them, because I do not want to interrupt the proceedings all the time. But I ask honourable members on both sides to please show some courtesy to each other. That is what it is all about; it is about respect for this House and courtesy to each other.

3. Pathways to Partnership—Funding

[Uncorrected transcript—subject to correction and further editing.]

3. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister for Social Development and Employment: Does she stand by her statement to the House: “I can assure the non-governmental organisations out there that the money from Pathways to Partnership is staying there”; if not, why not?

Hon PAULA BENNETT (Minister for Social Development and Employment) : Yes. This Government is committed to exactly the same spend as Labour was over the next 3 years, despite the worst economic conditions in decades. With help from the sector, we have developed a different way of delivering the fund for the next 2 years as a response to the recession.

Hon Annette King: Why did she allow over $100 million of Pathways to Partnership funding to be stripped from her budget and locked away in a contingency fund under the control of the Minister of Finance, and therefore not allocated to non-governmental organisations as she promised in her Budget statement; and why did she not tell the non-governmental organisations that “staying there” did not mean with them?

Hon PAULA BENNETT: I am actually very pleased to say that that $104 million has been put into a contingency fund, just as we announced last week. Forty million dollars of that is for this year; it is for the Community Response Fund. The other $64 million will be spent next year. Actually, that is a really good news story for those non-governmental organisations.

Jo Goodhew: What money has been put aside for the Community Response Fund?

Hon PAULA BENNETT: I will just reiterate this one more time, because this is a good news story for those non-governmental organisations out there that are struggling. One hundred and four million dollars has been put into a contingency fund that will be spend via the Community Reponse Fund. That will be distributed by the communities to organisations that are seeing an increase in demand and a decrease in their non-Government funding.

Hon Annette King: Why has the Minister cut funding to the National Collective of Independent Women’s Refuges, Barnados, Family Start programmes in South Auckland, the Anglican Family Care Centre, Family Wellbeing Services, counselling and rehabilitation services, and the Open Home Foundation, to name some, as set out on pages 119, 120 and 121 of the social development Budget documents; and how does this start-stop approach enable non-governmental organisations to plan for the provision of services, let alone provide them?

Hon PAULA BENNETT: I cannot say it any more clearly: the money that was put aside by Labour is being spent, and all of that money is there. As far as individual organisations go, contracts come up for renewal on 30 June. They are all being looked at. This is a ministry that is spending $19 billion this year alone.

Hon Annette King: Why did Budget 2009 deliver little to vulnerable families and instead effectively cut Pathways to Partnership, cut training incentive allowances to sole parents, and cut much-needed scholarships for low-income students, if the Government is keeping its word to address what she and John Key called a “growing underclass”?

Hon PAULA BENNETT: This Government makes no apologies for looking at each line and making sure that New Zealanders are getting value for money and that money is being distributed well and fairly. That money has not been cut. I think the member is scaremongering.

4. Primary Sector—Innovation

[Uncorrected transcript—subject to correction and further editing.]

4. SHANE ARDERN (National—Taranaki - King Country) to the Minister of Agriculture: What recent major initiatives has the Government announced to support primary sector innovation?

Hon DAVID CARTER (Minister of Agriculture) : Budget 2009 confirmed a significant, enduring, and transparent investment by the Government in primary sector innovation through the Primary Growth Partnership. The Primary Growth Partnership will see the Government investing $70 million annually in innovation, and in research and development, in the primary sector industries. When matched dollar for dollar by industry, the Primary Growth Partnership will be investing $140 million a year. The initiative is a clear demonstration of the Government’s commitment to boosting productivity across our economically vital primary sectors, and it has been warmly welcomed.

Shane Ardern: Why has the Government made such a significant investment in primary sector innovation in this challenging economic environment?

Hon DAVID CARTER: Budget 2009 was about putting our economy back on to the road to recovery. The primary sector will lead that recovery, which is why it is so important that the Government invests in boosting the sector’s productivity. The Primary Growth Partnership is not about business as usual; it is about the Government putting forward the money to drive ambitious changes in productivity and build world-class expertise. It is not some $700 million fairytale but a real commitment by this Government.

Hon Jim Anderton: Can the Minister tell the House what new, innovative, creative, and dynamic new chairmanship he is proposing for the new administrative bureaucracy, “the investment advisory panel”, to replace the former administrative bureaucracy, the New Zealand Fast Forward board, which was chaired by the highly regarded Mr Bill Faulkner?

Hon DAVID CARTER: The panel will be chaired by Mr Bill Faulkner, one of the very satisfactory appointments made by the previous Minister of Agriculture. I concur that he is highly regarded, and he will lead this sector forward as the chair of the panel.

Shane Ardern: What other reports has the Minister seen on the Primary Growth Partnership?

Hon DAVID CARTER: I have seen a large number of reports on the Primary Growth Partnership that welcome it and praise the Government’s support. At last count, 14 different organisations—from Zespri to Fonterra to Science New Zealand to the Seafood Industry Council—all welcomed the Government’s significant investment. The only people who have not welcomed it are Labour members and Mr Anderton, who are clearly out of touch with New Zealand’s primary sector.

Hon Jim Anderton: Could the Minister explain to the House why he said in a post-Budget speech in Christchurch today that the National Government had “assessed Fast Forward and decided we could do better.” when a $700 million deposit in the non-departmental, non-capital expenditure Ministry of Agriculture and Forestry account is not better than a $190 million appropriation over 4 years that will have only $30 million appropriated this financial year and could then be abolished at any time, in the same way that New Zealand’s superannuation payments were put on moratorium for 11 years?

Hon DAVID CARTER: I can explain that very easily. The previous Government was to borrow $700 million when the debt problem now facing this Government is large enough. The commitment of Primary Growth Partnership will mean that close to $1 billion will be spent over the next 15 years, and even Mr Anderton can work out that that figure is considerably more than the $700 million that he proposed. The Primary Growth Partnership is far larger than his New Zealand Fast Forward policy.

Hon Jim Anderton: Does the Minister understand that by his logic—because the Government’s deficit with borrowing is increasing to $16 billion—he is now saying that the Government is borrowing all the money it needs to fund education and health expenditure, as well; or is he selecting the $700 million for New Zealand Fast Forward because it happens to suit his political persuasion?

Hon DAVID CARTER: No, I am not saying that at all. The unconventional way of attempting to fund New Zealand Fast Forward was not satisfactory to this Government and nor was it to Rod Oram, that well-known commentator for the left, who said that New Zealand Fast Forward was one of several “shifting, inadequately executed attempts at economic transformation. It is a big slug of money with no under-pinning strategic plan.”

5. Superannuation—Projected Cost

[Uncorrected transcript—subject to correction and further editing.]

5. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: How does he plan to cover the projected cost of New Zealand superannuation over the next 30 years?

Hon BILL ENGLISH (Minister of Finance) : We plan to cover it the same way the previous Government planned to cover it: from now until 2030 it will be covered out of general tax revenue. After 2030 the New Zealand Superannuation Fund will make some contribution to the Government’s finances, to assist with supporting New Zealand superannuation beyond that point. As the member will know if he listened to the previous Minister of Finance, Dr Cullen, there is no link between the fund and the pensions; the sole source of security for future retirees is that Government finances remain sound and the economy healthy.

Hon David Cunliffe: Can the Minister confirm, therefore, that his decision to suspend contributions to the Superannuation Fund for nearly 11 years means the fund will be around $37 billion smaller, with interest, than it otherwise would have been; and that the fund’s ability to smooth the growing cost of superannuation will be seriously compromised? Does he therefore agree that this hole makes no sense, when, according to Treasury, the projected return on that investment is a full 2 percent higher than the Government’s cost of capital, therefore having a positive effect on the Crown’s balance sheet?

Hon BILL ENGLISH: I can confirm that New Zealand superannuation will be funded from general tax revenue from now until 2030. That is a matter of fact, not opinion. From now until 2030, nothing has changed: New Zealand superannuation will be funded from general tax revenue. I take the member up on his nonsense about the $37 billion shortfall. That calculation leaves out the large amount of borrowing that would have to be done in order to fund the contributions.

Peseta Sam Lotu-Iiga: If the Government were to make no contributions to the fund for another 11 years, how would the future cost of pensions compare with that expected when the fund was established?

Hon BILL ENGLISH: Whether there are contributions to the fund, and for how many years they are made, has no effect on the future cost of pensions compared with what was expected. When the fund was established back in 2000, the Government did projections that showed that by 2021 the total cost of New Zealand superannuation plus contributions would be 6.75 percent of GDP. Today’s projections available on Treasury’s website show that the total cost is now 5.43 percent of GDP in 2021. Maintaining New Zealand superannuation has actually become more sustainable because of changes in assumptions relating to demographics and rates of return.

Hon David Cunliffe: Can the Minister confirm that he has just given 37 billion reasons to young New Zealanders faced with a higher tax bill to leave, because, as Brian Gaynor has said, there is no free lunch here? Does he, therefore, agree that a decision to stop contributing to a major fund and then to say to people that they will get their full entitlements at 65 means that John Key has joined a long line of National leaders adept at breaking promises to maintain superannuation entitlements?

Hon BILL ENGLISH: Well, that member is joining a line of Labour MPs who have forgotten the legislation they voted for just a few years ago. That legislation allowed Governments to suspend contributions. At the time Dr Cullen basically said that it was there in case the Government did not have surpluses. Now that we have $10 billion of deficit, and a decade of deficits ahead of us, under what circumstances does the member believe he would suspend contributions, if not now?

Peseta Sam Lotu-Iiga: What were the Government’s intentions when it established the fund?

Hon BILL ENGLISH: The Government’s intention at the time, as I understand it, was to set up a fund into which it would put surpluses, because that represented real money that New Zealanders might be able to save, and by 2030 the accumulation of those surpluses would pay for about 12 percent of New Zealand superannuation. That was an idea that the National Party supported. Dr Cullen said at the time that there is—

Hon Darren Hughes: Pension less GST.

Hon BILL ENGLISH: The member should listen to what Dr Cullen said. At the time he said that there was no direct link between the Superannuation Fund and New Zealand superannuation payments, and he also said that contributions should be made from surpluses. We now face 10 years of deficits. Opposition members need to tell us how much debt they would tolerate, and under what conditions they would suspend contributions.

Hon David Cunliffe: Can the Minister of Finance tell the difference between a short-term suspension with a plan to make up the difference, and a decade of deferrals with no plan to make up the difference? Will the Minister admit that part of the reason why the Government’s Budget has a whole is that he made a choice to give billions of dollars worth of tax relief to the top 3 percent of income earners?

Hon BILL ENGLISH: That is a bit rich. We are giving out in tax cuts half of what the Labour Party promised—half of it. That member should tell us what he was going to do with his tax cut plan. In fact, the Budget incorporates the resumption of contributions when the Budget goes into surplus.

Amy Adams: What returns has the New Zealand Superannuation Fund returned to date?

Hon BILL ENGLISH: Since the fund was set up, it has averaged an annual return of 3.65 percent, which is less than the return one could get over that time from putting the money in the bank.

Amy Adams: Is there any guarantee that the fund will perform better over the long run?

Hon BILL ENGLISH: A bunch of investment experts, including Opposition members, have suddenly decided that the smartest thing one can ever do is borrow money and invest it on world sharemarkets. I suggest they go along to the bank and try that. They should go along to The National Bank and tell it that they have a mortgage, an overdraft, a car on hire purchase, and that—by the way—they want to borrow $200,000 to invest on the US stock market because Phil Goff says it will do better than lending the money to the Government. It is ridiculous. In fact, the accumulated evidence is that over the next 10 or 15 years stock markets are likely to do much worse than in the last 15 years. In any case, it is a big risk to take with borrowed money.

6. Budget 2009—Environment

[Uncorrected transcript—subject to correction and further editing.]

6. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Is he confident that his Government’s Budget will protect New Zealand’s environment, which he recently described as “a huge part of our brand.”?

Hon JOHN KEY (Prime Minister) : Firstly, I congratulate the member on her elevation to co-leader of the Greens. Secondly, the answer is yes.

Metiria Turei: Can the Prime Minister identify the species that he thinks can become extinct in light of his $54 million cut in the budget of the Department of Conservation, and are those extinctions part of his vision for our brand?

Hon JOHN KEY: The Department of Conservation, like every other Government department, will have to learn to live with the more difficult economic times that we find ourselves in. The member quoted a number that spanned a 4-year period. On the predictions that I have, in those 4 years the Department of Conservation will spend roughly $1.7 billion. That is a lot of money going into conservation.

Metiria Turei: How will reducing the biosecurity surveillance budget by 11 percent help to safeguard both the farm and forestry economies, or are more introduced pests and diseases part of his vision for our brand?


Hon David Parker: Can the Prime Minister guarantee that the cut of $9 million to the Department of Conservation output class for the management of national heritage—covering weed and pest control of national parks and other Department of Conservation land—will not result in significant job losses and unemployment for those who carry out pest and weed eradication?

Hon JOHN KEY: All I can say is that $419 million is going into conservation over the next 12 months. Yes, the Department of Conservation will have to learn to live with more difficult economic conditions. That fact is not lost on every other New Zealander, except members of the Labour Party who still think they are back in power with massive surpluses, spending whatever they like, and just whacking it on the bill.

Hon Phil Goff: Whacked it on to the next generation; that is what the Prime Minister has done.

Mr SPEAKER: The Leader of the Opposition and his front-bench colleagues should show a little courtesy to the co-leader of the Greens. They are interjecting so loudly across the House I had no chance of hearing Metiria Turei, who has the floor.

Hon David Cunliffe: I raise a point of order, Mr Speaker. You have previously enjoined the House to respect the use of parliamentary questions to give straight answers. It is quite clear that in his response the Prime Minister, by his use of the latest Crosby/Textor phrase, has sought to bring disrepute on the Opposition.

Mr SPEAKER: The member cannot use a point of order to debate the quality of an answer given by the Prime Minister. [Interruption] The Hon Annette King should not keep interjecting while I am trying to rule on a matter. I just ask members to be reasonable. It is not unreasonable to show a little courtesy, and I ask for courtesy for Metiria Turei.

Metiria Turei: Can the Prime Minister describe how cutting back the Community Conservation Fund will “encourage the initiatives of thousands of volunteers and dozens of organisations [to participate] in community conservation projects.”, a stated goal of the National Party’s 2008 election policy?

Hon JOHN KEY: The Community Conservation Fund was to have funding of $4 million; it now has funding of $2 million. All of the 46 community projects that have been started will continue to be funded. There are other options for funding community projects, from the Lotteries Commission right through to regional councils. But, as I say, everyone will have to live with more difficult economic conditions.

Metiria Turei: Does the Prime Minister consider our conservation estate a vital attraction for tourists; if so, how does he consider that funding cuts to those who track the pests, to those who cuts the tracks, and to those who pull the weeds will affect our indigenous flora and fauna upon which much of our tourism industry is based?

Hon JOHN KEY: In answer to the first question: yes. In answer to the latter: because I expect the Department of Conservation to learn to live with $419 million, not $431 million. I do not think that that is a big ask.

Metiria Turei: How does cutting the budget for education for sustainability on, for example, the MātaurangaKuraTaiao programme, education for sustainability advisers, and Enviroschools enhance our brand; or are eco-literate children not part of the Prime Minister’s vision of New Zealand’s future brand?

Hon JOHN KEY: In answer to the last part of the question: yes.

Metiria Turei: Does the Prime Minister agree that New Zealand’s clean, green reputation—indeed, New Zealand’s “clean, green” brand—is worth billions of dollars to the New Zealand economy and to thousands of struggling New Zealand businesses, and that during a recession we should be doing more, not less, to protect our environment on which our economy is based?

Hon JOHN KEY: I certainly agree that part of New Zealand’s important brand is the “clean, green” image, and that is one of the reasons why funding in the Budget has been as excessive as it has; it is very important we maintain that brand. But it is equally important that we realise we have to live within our economic means, and I do not think that a very modest reduction in expenditure is out of the question for any Government department at the moment.

Metiria Turei: I seek leave to table the National Party’s 2008 conservation policy, which encouraged community conservation.

* Document, by leave, laid on the Table of the House.

Metiria Turei: I seek the leave of the House to table a press release describing a report from the PA Consulting group, which identifies the extent of the effect of, and the dollar value of, New Zealand’s environment on our economy.

* Document, by leave, laid on the Table of the House.

7. Health Care—Policy

[Uncorrected transcript—subject to correction and further editing.]

7. Hon RUTH DYSON (Labour—Port Hills) to the Minister of Health: Does he still stand by his policy to deliver better, sooner, and more convenient health care?

Hon TONY RYALL (Minister of Health) : Yes, that is our plan, despite inheriting a public health system that has serious workforce shortages, that has many services under severe pressure, and that is on a track to a financial crisis.

Hon Ruth Dyson: What is better or more convenient for health professionals, who have now been told there is no money for even a cost of living increase in their salary and wages, as a direct result of the health portion of last week’s Budget?

Hon TONY RYALL: There is no doubt that the Government has put a lot more money into the health service, which we are determined will provide more services for New Zealanders. But I think that all of us in the health service recognise that the country is under significant financial pressure, and everybody will be asked to carry part of that.

Hon Ruth Dyson: Has the Minister seen the comment from Ian Powell of the Association of Salaried Medical Specialists that “It is financial wastage to train doctors for the benefit of Australia and elsewhere.”, rather than for New Zealand’s public health system; or is his plan to support better, sooner, more convenient public health services overseas?

Hon TONY RYALL: Yes, I have seen those reports. I would reply that it was greater wastage that we had a Government that spent millions and millions of dollars on 54 workforce reports in the space of 9 years, and the workforce crisis got worse.

Dr Jackie Blue: What statements has the Minister seen in relation to the Budget announcements that advance a better, sooner, more convenient health service?

Hon TONY RYALL: I have seen a copy of an initial press statement issued by the Hon Ruth Dyson on Budget night, which claimed that public health and primary health care would be cut by about $59 million. I have also seen a copy of her final statement, and those claims had vanished because they were utterly wrong. The reality is that the Government has increased public health service purchasing by tens of millions of dollars.

Hon Ruth Dyson: When he agreed to district health boards raising the threshold for entry to rest home care and cutting home support services, what part of “better, sooner, and more convenient” did he think those actions would be for older New Zealanders?

Hon TONY RYALL: That member can make whatever allegations she wants about various matters, but the fact is she cannot substantiate them. New Zealanders realise that the economic situation is very tight, and that many New Zealanders will have to look at their demands in terms of how we can improve the New Zealand public health service.

Hon Sir Roger Douglas: Why is the Minister continuing the previous Labour Government’s socialist policy of large increases in real health expenditure, when, under that Labour Government, such a policy resulted in huge drops in productivity and little or no increase in outputs; and what is he doing differently to achieve a different result?

Hon TONY RYALL: I certainly agree with the member’s summation of the lack of performance under the previous Government. But this Government is determined to work with our front-line health professionals to improve the services that New Zealanders receive, and to work towards better, sooner, more convenient health care for more New Zealanders.

Hon Sir Roger Douglas: Does the Minister believe in competition for goods and services; if so, why is he not introducing more competition into the health sector?

Hon TONY RYALL: There is no doubt that there is an opportunity to secure better outcomes for New Zealand patients, particularly in the area of the supplementary work that private hospitals can provide for the public health service. But we want to make sure that we enhance capacity within the public hospital service, in addition to what is happening privately, and that is why this Government is committed to its plan to build dedicated elective surgery capacity in New Zealand—and the Opposition hates it.

8. Hospices—Funding

[Uncorrected transcript—subject to correction and further editing.]

8. Dr PAUL HUTCHISON (National—Hunua) to the Minister of Health: What announcements has the Government made in relation to hospice funding?

Hon TONY RYALL (Minister of Health) : Despite inheriting a public health system with serious workforce shortages, the Government has committed an extra $60 million over the next 4 years for New Zealand hospices. Hospices have long been supported by public funding, together with a very large amount of voluntary work and funding. This announcement will help sustain the work that these very good New Zealanders are undertaking.

Dr Paul Hutchison: What are the details of how this $15 million per year is to be shared among different regions?

Hon TONY RYALL: The Ministry of Health has been working with hospices and district health boards to establish individual shortfalls, and has agreed allocations that essentially enable each hospice to have around 70 percent of its costs covered by Government or district health board funding. In addition, for those areas without hospices, palliative care funding has been allocated to ensure that those areas are not disadvantaged.

Hon Ruth Dyson: Why has the Minister agreed to $10 million worth of cuts to home-based personal care and housework, rest home and dementia level care, respite care, and carer support, including palliative care, in the Otago community, and how does that $10 million cut per year for just one district health board compare with the $15 million increase for hospices across the whole country?

Hon TONY RYALL: I am completely unaware of where the numbers quoted by the member come from. I suspect they are like the document she tried to table in the House last week: she just made it up and she was found out.

9. Conservation, Department—Funding Cut

[Uncorrected transcript—subject to correction and further editing.]

9. Hon DAVID PARKER (Labour) to the Minister of Conservation: What services will be cut and how many jobs will be lost at the Department of Conservation as a result of the $54 million cut in funding over 4 years?

Hon TIM GROSER (Minister of Conservation) : Let me repeat the essential point already made by the Prime Minister today in response to what was, essentially, exactly the same question. The $54 million of savings over the next 4 years have to be seen against the context of more than $1.5 billion of expenditure and the worst economic conditions since the Great Depression. For the last 5 years money has been pouring into agencies of State; this Government is demanding productivity enhancements. I am happy to say that the Department of Conservation is among the better-managed agencies, and I am confident that it can achieve these extremely modest savings without compromising any of the core objectives. In respect of job creation, I say that we are seeing a large number of vacancies; the department will be relying on them, plus natural attrition. I am confident that the core objectives will be achieved.

Hon David Parker: Has the Government cut funding for the output class “Management of natural heritage”, which covers weed and pest control in national parks and other Crown land managed by the Department of Conservation, by $9 million this year alone?

Hon TIM GROSER: The Government has made a variety of very modest savings, which have been expected of the department, including some low-priority pest and weed control. On the other hand, the department will be getting increased funding for a number of other conservation objectives that I think are a much higher priority.

Hon David Parker: Does the Minister know that weed and pest control are labour-intensive and are a relatively inexpensive source of jobs in a time of recession, and that this funding cut may result in the loss of as many jobs as have been saved by the 9-day working fortnight?

Hon TIM GROSER: I have already made it clear that the department will be relying on vacancies and natural attrition to achieve its objectives. We have also increased spending on two of the non-departmental votes that will contribute to exactly those objectives, and I am confident that the core principles of the department will be adequately maintained. I repeat that the total spend of $419 million is $100 million more than the department was spending as recently as 2007.

10. Police—Numbers

[Uncorrected transcript—subject to correction and further editing.]

10. SANDRA GOUDIE (National—Coromandel) to the Minister of Police: What is the Government doing to put more police on the streets of New Zealand?

Hon JUDITH COLLINS (Minister of Police) : As promised, the Budget has provided $182.5 million for 600 extra police to help keep New Zealanders safe. Three hundred will go to the Counties-Manukau Police District by the end of next year, and there will be 300 more across the country by the end of 2011. The Government’s top priority has been to increase the number of front-line police, and this funding honours that commitment.

Sandra Goudie: What will the impact be of 300 extra police in Counties-Manukau?

Hon JUDITH COLLINS: I expect that it will lead to a police service that is better able to respond to crime, and whose visibly increased presence will deter crime in the Counties-Manukau region.

Sandra Goudie: How will other districts in New Zealand benefit from the Government’s commitment to provide extra police?

Hon JUDITH COLLINS: As a result of this Government’s commitment to achieving a police to population ratio of 1:500, by the end of 2011 another 300 police will have been recruited and will be serving throughout other parts of New Zealand, to boost current district policing requirements.

Hon Clayton Cosgrove: Why does the Minister continue to claim that 600 extra police are being put on the streets by National, when she knows that approximately 380 of those new police recruits had already been funded by Labour in Budget 2008, which means, in fact, that National’s total contribution over the next 3 years is just 75 more police officers a year—not much more than one police officer per electorate?

Hon JUDITH COLLINS: As everybody in New Zealand should now know, most of the Labour Government’s policies were not actually funded. These ones are.

11. Budget 2009—Tertiary Funding

[Uncorrected transcript—subject to correction and further editing.]

11. Hon MARYAN STREET (Labour) to the Minister for Tertiary Education: Has she received any reports on the impact of funding announced in Budget 2009 on tertiary students?

Hon ANNE TOLLEY (Minister of Education) : Yes.

Hon Maryan Street: Has the Minister seen reports from Canterbury University, which is being forced to restrict entry to second-year courses as a result of a $17 million funding cut in this Budget; if so, how does she think this will contribute to upskilling New Zealand’s workforce and taking New Zealand “aggressively” out of the recession, as the Prime Minister promised?

Hon ANNE TOLLEY: I say to that member that institutions such as that university already restrict entry to some courses. In fact, when that member was Associate Minister of Tertiary Education, her Government was unable to fund institutions so that they were able to accept every student into every course, and that was in much better economic times than we are facing now. During these tough economic times, this Government is acting responsibly and ensuring that there is quality investment in high-quality tertiary education.

Aaron Gilmore: What initiatives has the Government funded for tertiary students through Budget 2009?

Hon ANNE TOLLEY: I am very proud of the initiatives that this Government has funded through Budget 2009. They include the voluntary bonding scheme for the health, veterinary, and education sectors in order to help to get those professionals into hard-to-staff areas. They include a voluntary repayment bonus to help graduates to pay off their debt sooner. They also include a commitment to meet the universities on a dollar for dollar scheme of $4 million for a summer internship scheme to give students paid work over the summer.

Mr SPEAKER: Before I call the Hon Maryan Street—and I apologise for interrupting her—I say to the front- bench members on both sides that I do not mind interjections that relate to the question that is being answered. But where we have interjections to each other continually being shouted across the front benches, interjections that are actually quite nasty and that I do not think are very helpful to this House, I ask members on both sides to cease that behaviour. It is very discourteous to members who are either asking or answering questions.

Hon Maryan Street: Does she agree with the import of the following quotation: “Damn the Nats who bring cuts to our education system, make us pay for them out of our student loans, that will take many people decades to pay off.”; if not, has she taken up the issue with the author of that statement, the president of the Albany Students’ Association in 1996: Paula Bennett?

Hon ANNE TOLLEY: That member might like to study the Budget carefully, because the increase for tertiary education rises from $2.66 billion in 2008-09 to $2.78 billion in 2009. I think that student would now be saying “Hurray for the Nats.”

Hon Trevor Mallard: I raise a point of order, Mr Speaker. We have had a discussion about this previously. I think the member has made an error. The increase could not be—

Mr SPEAKER: The member knows he cannot dispute an answer by way of a point of order. It is simply not provided for. He can ask a supplementary question that puts the Minister on the spot over some information she has given in an answer. That is the way to handle the issue: to ask a supplementary question about it.

Hon Maryan Street: Why has she refused to front up to the New Zealand University Students Association conference that is being held in July of this year, and is that because the effective cuts to tertiary education, including the axing of $98 million worth of scholarship funding, have “resurrected financial barriers to tertiary education”, as the association claims?

Hon ANNE TOLLEY: I would say to that member that she probably needs to get her facts straight. I have not refused to front up. Perhaps she might like to check with the association as to who is actually appearing at the conference.

Hon Trevor Mallard: Was the Minister serious when she suggested in response to an earlier supplementary question that tertiary funding had increased by $2.66 billion, or was she just confused?

Hon ANNE TOLLEY: I did not say that, so I could not possibly have been serious.

Te Ururoa Flavell: Tēnā koe, Mr Speaker. Kia ora tātou. What programmes will be considered as a part of the higher priority provision, as discussed in Budget 2009, for tertiary students in adult and community education, and what consultation process will be undertaken with Māori stakeholders on these priorities in order to maintain the momentum of Māori gaining a kick-start from these educational initiatives to get into higher learning?

Hon ANNE TOLLEY: Higher priority provisions will be courses that focus on literacy and numeracy and on other foundations skills that offer good staircasing opportunities for future training and employment. I have already had a number of discussions around this with the wānanga about how they can continue to boost Māori participation in higher learning. In fact, I have a meeting with them this week to discuss those very issues.

Te Ururoa Flavell: Has the Minister read the PricewaterhouseCoopers report that concluded that community-based education has an estimated economic benefit of up to $6.3 billion annually; and does she agree that adult and community education is likely to have one of the highest added values in economic terms, as it is largely focused on improving people’s productive lives through learning?

Hon ANNE TOLLEY: Yes, I have seen that report. But the advice I have received is that the courses on literacy and numeracy and on the foundation skills do the heavy lifting in terms of producing the economic benefit from community-based education. That is why the Government is going to prioritise its spending in those areas, and not on courses that teach people hobbies such as concrete shell mosaics, and Moroccan cooking.

Hon Maryan Street: I seek leave to table a copy of “Pres Talk” from Satellite, which is the Albany Students’ Association magazine, with the quotation from Paula Bennett to which I referred.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is none.

* Document, by leave, laid on the Table of the House.

12. Kahawai Fishery—Supreme Court Judgment

[Uncorrected transcript—subject to correction and further editing.]

12. COLIN KING (National—Kaikōura) to the Minister of Fisheries: What judgment was handed down recently by the Supreme Court on the management of the kahawai fishery?

Hon PHIL HEATLEY (Minister of Fisheries) : The Supreme Court recently ruled on a 2004-05 ministerial decision regarding kahawai stocks. It has ruled that ultimately the question of the allocation between fishers is a matter of judgment for the Minister of Fisheries. This provides clarity for me as the Minister, and I would like to assure all fishers—commercial, recreational, and customary—and the member that I understand the responsibility I have as the Minister to make sound decisions to protect the health of the fish stock, and to provide all with fair access to and a fair share of our fisheries.

Colin King: What are the next steps to be taken with regard to the review of the kahawai catch limits?

Hon PHIL HEATLEY: I am committed to reviewing the kahawai catch limits and allowances. However, there is not enough time left to properly review the catch limits before the start of the next fishing year, on 1 October 2009. Given the history and the importance of this fishery, I want the review to be done properly. I am not prepared to act in haste.


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