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Questions And Answers Oct 26 2010

(uncorrected transcript—subject to correction and further editing)




Economic Recovery—Governor of the Reserve Bank’s Statement

1. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: Does he agree with Reserve Bank Governor Alan Bollard’s assessment that the economic recovery is proving to be “slow and fragile”?

Hon BILL ENGLISH (Minister of Finance): Compared with previous recoveries, generally, yes. As Dr Bollard noted in the bank’s annual report, a different kind of recovery is to be expected when an economic recession, which began in early 2008, is followed by a global financial crisis. Despite this, he also states in the report: “We have now emerged from a long recession, and have experienced some quarters of significant growth.”

Hon David Cunliffe: Does this, therefore, prove that the Prime Minister’s prediction of an “aggressive” recovery, and the statement: “The recovery has been quite considerable.”, were, in fact, incorrect?

Hon BILL ENGLISH: As the Prime Minister has said in response to probably half a dozen questions here in the House, the quote was from March 2009 and reflects the fact that there had been a 2.5 percent contraction in the economy in the previous year. Subsequent to that, the economy grew by 1.9 percent, which was a welcome increase in economic growth.

Amy Adams: What other factors are influencing the nature of the recovery?

Hon BILL ENGLISH: As Dr Bollard and others have pointed out, a major factor in the pace of the recovery is that New Zealanders have adjusted their spending and saving habits very quickly, and are now saving rather than spending. This is contributing to a much-needed rebalancing of the economy. However, in the short term, it does mean a slightly more subdued recovery. The Government’s 1 October tax changes support this much-needed rebalancing, by tilting incentives towards earning and saving and away from the housing speculation, rampant borrowing, and spending of the last decade.

Hon David Cunliffe: Was he therefore correct when he said that John Key’s prediction of an aggressive recovery was merely “aspirational” and that “I wouldn’t want to say he’s wrong but he’s setting a high hurdle here and it’s our job as a government to meet those expectations … a big focus there for the Government is replacing the jobs that have been lost”; if not, does he agree that unemployment numbers showing that job losses increased by over 500 each week since he has been in office point to a failure to meet those expectations?

Hon BILL ENGLISH: I do agree with the expectations, and in respect of job losses, as was pointed out in the House last week, the number of people on the unemployment benefit currently is still less than it was for over half of the time that Labour was in office. As the member knows, when there is a significant recession, unemployment goes up. I am pleased to say the Government is

playing its part by spending billions on infrastructure, which is underpinning the employment of thousands of skilled and unskilled people.

Hon David Cunliffe: Which aspect of the recovery has been aggressive—unemployment staying above 6 percent, compared with the 3.4 percent achieved under Labour; recent GDP growth of 0.2 percent, which is less than a quarter of the Reserve Bank’s prediction; declining business confidence; or housing prices that have continued to fall?

Hon BILL ENGLISH: As I pointed out in answer to an earlier question, the economy did turn round aggressively from a sharp recession into economic growth, and now the recovery is somewhat qualified by the fact that, as I have pointed out a number of times, New Zealanders are saving much more strongly than perhaps some had anticipated. If we save a dollar, we cannot spend it. That is why things are a bit tough for retailers and the construction industry, but in the long run it is the right kind of adjustment—more saving, less borrowing; the opposite to that member’s policies.

Hon David Cunliffe: Does he agree with Governor of the Reserve Bank Bollard’s concern expressed to the Finance and Expenditure Committee last week about the decline in business lending by the New Zealand banking system, and the thus dramatic decline in New Zealand manufacturing activity; if so, does he have a plan for dealing with either of those matters?

Hon BILL ENGLISH: I do agree with the concern about the decline in business lending, and that of course is a product of a couple of things. One is the fact that New Zealanders are saving more and spending less. Therefore, retail and construction businesses will not have the demand for borrowing, simply because they do not see the opportunities for growth. In the long run, the Government has a wide-ranging economic programme designed to lift productivity and confidence, and we are confident that in time business investment will begin to flow. We will do everything we possibly can to encourage businesses to invest and employ.

Amy Adams: What steps has the Government taken to pull the economy out of the recession that started in early 2008, and put it on the road to recovery?

Hon BILL ENGLISH: In the short term, the Government has run substantial deficits in order to cushion New Zealanders from the effect of what has been a fairly sharp recession, to the extent that this year we will run a $13 billion deficit, supporting Government investment in infrastructure, and continuity of public services. We have also implemented significant tax reform, including increasing GST and reducing taxes on savings, on incomes, on exports, and on investments. I am pleased to say those tax cuts are being very well received.


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

Hon BILL ENGLISH (Minister of Finance): I have seen reports from the recent G-20 meeting of Finance Ministers—that is, Finance Ministers of the 20 major economies in the world—who met over the weekend. The communiqué from that meeting noted that global economic recovery continues to advance, even though it is somewhat fragile and uneven. Growth has been strong in many emerging market economies, and New Zealand is benefiting from some of that, but the pace of activity remains modest in many advanced economies. The G-20 Ministers noted that there are still significant downside risks, although they are different from country to country and region to region.

Craig Foss: Given the significant impact of exchange rate movements on the New Zealand economy, what did the G-20 Finance Ministers say about their approach to currency and monetary policy?

Hon BILL ENGLISH: First of all, they reaffirmed their commitment to monetary policy that is appropriate to achieving price stability. Secondly, they were committed to the move towards more market-determined exchange rate systems that reflect underlying economic fundamentals rather

than competitive devaluation of currencies, which do not reflect the underlying fundamentals. More broadly, they believe that the pursuit of structural reforms will help boost and sustain global demand, foster job creation, and increase growth potential. The Government is pursuing these kinds of measures including, as they suggest, clear, credible, ambitious, and growth-friendly, mediumterm fiscal consolidation.

Craig Foss: What other reports has he seen about approaches to economic policy?

Hon BILL ENGLISH: Following on from the G-20 meeting, I saw reports quoting Australian Prime Minister Julia Gillard saying that many groups in Australia should continue to support the political consensus that has delivered 25 years of hard-won economic reform. She has said that this reform consensus is now under serious threat in Australia and that there is a risk of a return to economic populism. She guaranteed that her Government would continue with more market-based reform, including in areas such as health and education. Clearly, she was not influenced by what Phil Goff told her on his visit.

Hon David Cunliffe: Does he still agree with John Key that New Zealand has “the best monetary policy in the world”; if so, why since that date has the Governor of the Reserve Bank changed it to include the core assets ratio, the consideration of liquidity ratio, and a whole range of other tools that that Minister deemed completely unorthodox?

Hon BILL ENGLISH: I agree with the Prime Minister’s view that New Zealand’s monetary policy framework is appropriate for our situation. We do not see significant reason for that to be changed. In particular, it is a bit odd to be hearing that a party that says it is worried about the cost of living is advocating monetary policy changes that would allow for significantly higher inflation.

Craig Foss: What economic policy risk parallels are there between New Zealand and Australia?

Hon BILL ENGLISH: Like Australia, for more than two decades New Zealand has enjoyed broad consensus on important issues like independent monetary policy, a simple and uniform GST system, an open and competitive economy, and a commitment to free trade. I notice that in Australia Mrs Gillard has talked about the prospects of “economic Hansonism” talking hold. In New Zealand this risk could easily be called “economic Goffism”.

Film Industry—Minister for Economic Development’s Actions

3. Hon TREVOR MALLARD (Labour—Hutt South) to the Minister for Economic

Development: What specific actions has he taken since becoming Minister for Economic Development to secure the New Zealand film industry?

Hon GERRY BROWNLEE (Minister for Economic Development): I have undertaken a number of activities to secure the future of the film industry. I have been looking closely at the capacity constraints that will hold back the expansion of the industry in New Zealand. I have examined closely the commercial motivations for the major studios to bring productions to New Zealand. My most important specific action recently was to bring the Screen Production and Development Association and New Zealand Actors Equity to the table to begin discussions about improvements and updates to the Pink Book. That is something that has not happened since the Australian union showed up in 2006.

Hon Trevor Mallard: Will he accept the congratulations of the Labour Opposition for the work he did at that meeting on 14 October, which all of those present agreed sorted out all industrial relations issues in relation to The Hobbit that were live at that time?

Hon GERRY BROWNLEE: At that meeting I made it very clear to participants that we were not there to discuss The Hobbit or to negotiate contracts for The Hobbit. Although some there insisted on mentioning The Hobbit, it was not part of the discussions. I also say there is a difficulty inasmuch as at the moment the ban on work on this film was put in place by the International Federation of Actors, at the behest of the Media, Entertainment and Arts Alliance of Australia, the film was in some trouble. I think it is totally wrong to characterise that meeting in this way, although as it was the first meeting for 4 years, clearly there was some progress.

Hon Trevor Mallard: Will he accept the congratulations of the Opposition for the very good work that he did at that meeting in bringing the parties together?

Hon GERRY BROWNLEE: Inasmuch as the parties agreed to accept an invitation, that is as far as it goes.

Hon Trevor Mallard: On how many occasions has he visited Warner Brothers or New Line Cinema executives in the last 2 years?

Hon GERRY BROWNLEE: I have had discussions with New Line and Warner Brothers but I do not want to discuss matters that were in those conversations while we are at a delicate point. I will say that the previous Government’s approach to having lavish dinners and other such functions in Los Angeles—

Mr SPEAKER: The question had nothing to do with what the previous Government had done. The question was simply about how many occasions the Minister had visited. What the previous Government might have done is not relevant to that question.

Hon Trevor Mallard: I raise a point of order, Mr Speaker.


Hon Trevor Mallard: If the member is going to say how many times he has visited, then I will sit down.

Hon GERRY BROWNLEE: As I said, I have had conversations with New Line and Warner Brothers. I have not visited them. I have also not had $140,000 dinners, described as the “hangi and hui” approach by Tem Morrison.

Hon Trevor Mallard: What adjustments has he made to the Large Budget Screen Production Grant Scheme as a result of those phone discussions with Warner Brothers or New Line cinema over the last 2 years?

Hon GERRY BROWNLEE: There has been no need to make those adjustments. The concern in this case is about the industrial relations situation that arose out of this extraordinary resolution, passed by the International Federation of Actors, instigated by the Australian union, and presented as an ultimatum to the producers of this film.

Hon Trevor Mallard: If the Minister says there is no need to adjust the grant, can he give an undertaking to this House that the grant will not be adjusted over the next 12 months?

Hon GERRY BROWNLEE: We need to get through the discussions that will take place today and see what it will take for this production to remain in New Zealand.

Hon Trevor Mallard: So how much is the Government prepared to pay by way of extra grant, this afternoon?

Hon Dr Nick Smith: What a wrecker.

Hon GERRY BROWNLEE: I do not want to use the words that some of my colleagues are using about Labour, because I think it has been very good that Labour has actually kept out of this argument. Mr Mallard has, himself, posted on his blog site a statement about how difficult these things are, and that with additional help it would all be sorted out with a cocktail party. We do not think that is the case. We will have discussions this afternoon and out of those there will be decision points for both the producers and the Government.

Hon Trevor Mallard: What action, other than facilitating the 14 October meeting and two telephone calls, has he taken over the last month to secure The Hobbit in New Zealand?

Hon GERRY BROWNLEE: Until the issue arose—that is, the threat was put to the producers by way of a work ban issued by the Australian union backed by the New Zealand Council of Trade Unions—there was no need for the Minister to be involved.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Taking your advice, I asked a simple and direct question as to what action over the last month other than two phone calls and facilitating the meeting the Minister has taken to secure The Hobbit in New Zealand. I do not think that that question was addressed. One might infer that there was none, but I think it would be—

Mr SPEAKER: The member is quite correct. The Minister answered the question, the member can take out of it what he likes, and he can pursue it with further supplementary questions. I believe that the Minister answered the question.

State Housing—Housing Shareholders’ Advisory Group Reports

KATRINA SHANKS (National): My question is to the Minister of Housing: what reports— [Interruption]

Mr SPEAKER: I say to both members, please, I have called Katrina Shanks and I expect some respect to be shown to her.

4. KATRINA SHANKS (National) to the Minister of Housing: What reports has he received about the stakeholder engagement carried out by the Housing Shareholders’ Advisory Group?

Hon PHIL HEATLEY (Minister of Housing): On Sunday I made public the results of engagement carried out by our housing advisory group, which includes Auckland City Mission and Salvation Army representatives. The overwhelming majority of community housing organisations supported the 19 recommendations made by the group, and called for the Government to act decisively to address the current housing challenges that the most vulnerable in our society face.

Katrina Shanks: What is the Government committed to in social housing?

Hon PHIL HEATLEY: This Government is committed to income-related rents, we are committed to housing those most in need in their time of need, and we are also committed to increasing the total quantum of social housing in New Zealand, although we do not make Labour’s claim that the State and the taxpayer have to own it all. However, we are saying that the State cannot afford to do this on its own, and I have been personally heartened by the number of social housing organisations that are willing to step up and increase their capacity to house families in need as long as they receive significant direct resourcing support from us. I am happy for the opportunity to work with them.

Katrina Shanks: What options is the Minister considering to better assist those most in need?

Hon PHIL HEATLEY: No decisions have been made yet. However, the group’s recommendation of working more closely with community housing organisations and providing them with capital, land, or houses in order to support them to grow is attractive to us. Their ability to provide, one, growth, two, affordable rentals with our support, and, three, secure tenure would be essential. We also want to debate the current concept of a State house for life. The introduction of reviewable tenancies would allow us to assess a tenant’s circumstances every 3, 5, or 10 years, rather than tenants being in a State house for life regardless of significantly or dramatically improved circumstances.

Moana Mackey: Does he agree with the strong position expressed both in the stakeholder feedback report and by members of his advisory group that any increased role for the community housing sector in the provision of social housing must be as well as, not instead of, continued investment from Government?

Hon PHIL HEATLEY: It not only would be as well as; what it would mean is that the Government and social housing organisations would work together and pool their resourcing. The idea is that social housing organisations would have a capital base, and therefore they would be able to borrow and also get a commitment from people they know to purchase more houses. The goal is to increase the amount of social housing in New Zealand while ring-fencing the Government’s commitment. We plan to put no less money into social housing, but we also have said that we cannot put any more in.

Moana Mackey: Can we take from his comments in August that the Government will be expecting charitable giving to replace Government investment in social housing, and from his comments this week that “we’re going to slow down and probably stop and go to the communityhousing sector” that he will expect the community housing sector to step in and do the job that his Government should be doing?

Hon PHIL HEATLEY: In fact, the community housing sector is expecting to step in and help us with the job of housing more people in New Zealand. The sector thinks the amount of social housing in New Zealand should increase, and it wants to do it. The main point of our resourcing it through capital, land, cash, or houses is it would have a secure base to borrow off and increase the number of houses it builds and supplies. That is good news; it wants to work with us.

Moana Mackey: Can he appreciate that his new-found desire to help those most in need of housing rings a little bit hollow, given that he personally stopped the building of 500 State houses in Auckland for the simple reason that the Prime Minister did not want them in his electorate?

Hon PHIL HEATLEY: I think Labour’s difficulty on this point is that it has lost the moral high ground when it comes to State housing, because it left the houses in such a serious state of disrepair. Rats in the houses, roofs collapsing, dampness, wetness, mould—it was an absolute disgrace. If this Government had not come in with its vacuum cleaner and its cheque book to clean up these State houses, I do not know what sorts of health problems we would have in New Zealand.

Earthquake, Canterbury—Insurance Advocacy Support Service

5. Hon CLAYTON COSGROVE (Labour—Waimakariri) to the Minister for Canterbury

Earthquake Recovery: Will he support my recommendation to set up an advocacy support service to provide earthquake-affected residents with help in dealing with their private insurers to prevent them being shunted between these insurers and the Earthquake Commission?

Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery): Since receiving that recommendation late last week—Friday, I think—I have had my office make contact with the Insurance and Savings Ombudsman to see what facilities might exist to expand some of the services there. I think it is very important that we do not begin by setting out a conflict situation between private insurers and claimants. It is worth noting that the first $100,000 worth of damage to the above-ground property is the responsibility of the Earthquake Commission. In order to facilitate that work being done at a speedy pace—although I say that, it will take a long time—we have put in place a project management structure, which should see that work progress steadily. As for the 1,200 or so houses that are identified as potentially—and I say only potentially—a total economic loss, we first need to let the private insurers go and see what is required on their part, whether it is rebuild or repair. Once we have a clearer picture about how that is unfolding, I would hope sufficient services are available through existing Government agencies to assist people who are having difficulties.

Hon Clayton Cosgrove: What action is he currently taking to help distressed and confused residents who are facing the strain of trawling through what I am sure he would accept is a maze of information, and who have no access to independent expert advice?

Hon GERRY BROWNLEE: I make the point that I do not think it matters how much independent expert advice one gets; if one is in a traumatised state, one will have limited capacity to take the information on board. We have tried over the last few weeks to simplify the whole situation. We have had very thorough geotechnical examination of the ground that has been damaged. The result of that examination is that, apart from 16 sections where there will need to be a bigger discussion about how to rebuild, if at all, in every case there can be a rebuild. That means that the people contacted last week should engage with their insurers—I have had discussions this morning with insurers and with the Earthquake Commission to make sure everyone is clear on this—and the insurers should then work out a work programme for either the demolition or the repair of that property. As the properties become available, through either demolition or repair, they can be remediated. In most cases that will mean simply compaction of the existing earth—filling and rolling. We are hoping the Christchurch City Council, along with the Waimakariri District Council, which has already done so, will support the major civil works being done in the public space in conjunction with the rest of that rebuild.

Hon Clayton Cosgrove: Does the Minister accept that earthquake-affected residents are following the procedure that has been outlined—that is, going to the Earthquake Commission, which recommends that then they go to their private insurer—but are increasingly being treated as if they are in a pinball machine in that they are being bounced around between the Earthquake Commission and their private insurer, and vice versa? What will he do to motivate private insurers to more swiftly shoulder their responsibilities when a person is referred by the Earthquake Commission, quite rightly, to the insurer, and the insurer simply bounces the person back? It is creating heartache.

Hon GERRY BROWNLEE: I do not accept that that is happening in all cases. I do not doubt that it is happening in some cases. Last Friday was the first day that there was clarity in the public arena about the ground. What is now happening is that information about properties where there is land damage is being shared with the insurers. The discussions that I have had with insurers this morning have I hope left them in no doubt that they now have a responsibility to get on with indicating either demolition or rebuild for those 1,200 people. The vast majority of the balance— some 77,000 households, I believe—are likely to be dealt with through the project management office, or, if those people choose, their own repair agencies.

Dr Kennedy Graham: How many more Orders in Council does the Minister plan to recommend to the Governor-General under the Canterbury Earthquake Response and Recovery Act, and within what time period does he envisage these orders being issued?

Hon GERRY BROWNLEE: I personally have no list of Orders in Council that we wish to put through. Orders in Council will be developed as difficulties arise, or as problems emerge, in the months ahead. I expect that all of the Orders in Council required will have been dealt with through the established process before Christmas at least. It may be that, going into the early part of next year, the legislation that we currently work under starts to become surfeit to requirement, and we will review that as we go through. We have no desire to keep that power in place for any longer than is absolutely necessary. As the member knows, Orders in Council that are being considered are supplied to Opposition parties ahead of time. I appreciate that in some cases the notice has been a little short; I assure the member that although that was the case for the raft of Orders in Council that have gone through, it will not be the case for those in the future.

Nevis River—Protection of Native Fish

6. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Conservation: What steps, if any, is she taking to protect the unique, rare and threatened Nevis Gollum galaxiid, a native fish species found only in the Nevis River in Central Otago?

Hon KATE WILKINSON (Minister of Conservation): The Gollum galaxiid is included in the Department of Conservation’s recovery plan that manages priority resources. The member may be interested to learn that there are populations of the Gollum galaxiid beyond the Nevis River, including on Stewart Island and in parts of Southland. The department is undertaking monitoring of the species in order to better understand its status.

Dr Russel Norman: What are the threats to the survival of the Nevis Gollum galaxiid, also known as the Smeagol galaxiid, and is she aware that the species on the Nevis River has in fact now been identified as a separate species?

Hon KATE WILKINSON: I am aware that it has been ascertained as a genetically distinct species, and I can also advise the House that one of the threats to the Gollum galaxiid is the aggressive native fish, the kōaro.

Dr Russel Norman: Does she agree with the findings of the special tribunal that damming the Nevis River would put the Gollum galaxiid at the risk of extinction?

Hon KATE WILKINSON: I have read the findings of the tribunal, which says that it is necessary to understand that Gollum galaxiid does not inhabit lakes or reservoirs. Can I say, though,

that I believe that in New Zealand The Hobbit may be more endangered and threatened if the Council of Trade Unions and Labour have their way. [Interruption]

Mr SPEAKER: There is no need for all that reaction.

Dr Russel Norman: I raise a point of order, Mr Speaker. The question was: “Does she agree with the findings of the special tribunal that damming the Nevis River would put Gollum galaxiid at risk of extinction?” It is a straight question. The question was not addressed; she spoke about other issues, but not that particular issue.

Hon Dr Nick Smith: This matter is before the Environment Court. As such, when Ministers—in this case, myself—make a final decision, there is an appropriateness about Ministers commenting on an application for a water conservation order that is currently before the court. Commenting on a matter of evidence before the court is equally problematic in the House with the way the member has formulated the question.

Mr SPEAKER: I do not believe there is a need to hear this further. The responsible Minister is perfectly capable of taking that matter into account in answering any questions. Minister Smith is absolutely right in that she needs to be careful when a matter is before the courts. As far as the member’s point of order is concerned, I believe that the Minister did express a view on the success of this species surviving in still water or reservoirs. I seem to recollect the Minister answering that part of the question.

Dr Russel Norman: Does she support the special tribunal’s decision to protect the Nevis River from being dammed in order to save Gollum galaxiid from extinction?

Hon KATE WILKINSON: In relation to the tribunal’s decision, I am not in a position to offer any expert or peer-review advice on it, being neither an expert in dams nor an expert in Gollum galaxiid. Furthermore, I would be reluctant to prejudge or prejudice any appeal from that tribunal’s decision.

Dr Russel Norman: Given that Pioneer Energy has appealed the special tribunal’s decision to protect the river, will the Department of Conservation submit against this appeal?

Hon KATE WILKINSON: No decision has been made on what role the Department of Conservation would take in the appeal process.

Dr Russel Norman: Why, when everyone is trying to save The Hobbit, will she not step in to save Gollum galaxiid and the Nevis River given that the attraction for filmmakers to New Zealand is our precious natural environment?

Hon KATE WILKINSON: I think I have already answered that. No decision has been made on the role that the department will take in the appeal process.

Industry Training—Decrease of Funding

7. GRANT ROBERTSON (Labour—Wellington Central) to the Minister for Tertiary

Education: How does removing $55 million from industry training help the growth of the productive economy?

Hon STEVEN JOYCE (Minister for Tertiary Education): The Government has a view that it wants to get value for money out of every dollar it spends on behalf of taxpayers. I appreciate that that is still a novel view in some quarters. As part of securing value for money in the tertiary sector, we have reviewed the industry training budget and found $55 million over 2 years not being used effectively in that sector. That money is now being used to fund almost 3,000 more full-time student places, with little if any effect on industry training because the funding was under-utilised or in some cases not being utilised at all. This, I believe, is a sensible, prudent use of taxpayers’ money that will help the growth of the productive economy.

Grant Robertson: In making its decision to cut $55 million from industry training, was any consideration given to the Government’s role in avoiding future skills shortages; if so, did that include using the money to provide incentives to employers to take on more trainees?

Hon STEVEN JOYCE: The member may not be aware, but the Government has an incentive in place where it pays roughly 70 percent, or in some cases more, of the cost of industry training—the cash version. The member may be interested to find out that roughly 100,000 of the registered industry trainees in New Zealand achieved no credits in 2009, 100,000 of them achieved no credits in 2008, and 44,000 of them achieved no credits across 2008 and 2009. I think it is appropriate for the Government to review that situation and spend the industry training budget more wisely.

Carol Beaumont: What impact does the Minister think cutting $55 million from industry training will have on lifting the skill levels of those already in work who will make up 80 percent of the workforce in 10 years’ time, and what new initiatives has this Government implemented to lift the skills levels of those already in work?

Hon STEVEN JOYCE: If the member had been listening to the answer to the previous supplementary question she would have known that something like 44,000 of the people who were paid for out of the industry training budget across 2008 and 2009 achieved no credits whatsoever, and therefore removal of that funding will have absolutely nil impact on the training and skills going forward. I also point out to the member that some of the money in 2010 and 2011 is not currently being allocated. So shifting it to where it can be used makes a reasonable amount of sense.

Carol Beaumont: I raise a point of order, Mr Speaker. I asked in that question what new initiatives has this Government implemented to lift the skills levels of those already in work, and I do not believe that the Minister even began to address that.

Mr SPEAKER: What makes it extraordinarily difficult for me is that the level of interjection from the member’s own colleagues in front of her meant I could not hear clearly that question. I nearly intervened but I thought it was the responsibility of her members to let her question be heard. Under those circumstances I cannot assist her, and her colleagues should be a little more thoughtful when their own backbench members are asking questions.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. There was some noise from my left—

Mr SPEAKER: Indeed there was, from the member sitting right on his left.

Hon Trevor Mallard: But the loudest noise came from Paul Quinn in the back corner.

Mr SPEAKER: I will deal with these matters, not National frontbenchers, including the Leader of the House. I made my decision because the deputy leader of the Labour Party was interjecting very loudly while her colleague was seeking to ask a question; I could not hear the detail of the question. Members will learn to be disciplined. If they want Ministers to answer their questions, then they should make sure the Speaker can hear them. I always try to make sure that the discipline falls in the right place in this House and that I am not interfering all the time. If members want their questions heard, then they know the best way to remedy that.

Grant Robertson: I raise a point of order, Mr Speaker. I am not in any way challenging that ruling, but I do note that each of the answers the Minister has given to the relatively straight questions today has begun with a flick at the Opposition, and I ask for consistency in that ruling.

Mr SPEAKER: When I went through these questions the member may be interested to know the one primary question today that I put a political connotation beside was this particular question, and I am not surprised the Minister has taken a small flick in answering it. The member does not need to have been in this House a long time to see the political implications of this question.

Carol Beaumont: Does he agree with New Zealand Manufacturers and Exporters Association chief executive, John Walley, that “trade skills are one of the main drivers for productivity, especially for a country like New Zealand with a small population.”; if so, how does he think cutting $55 million from industry training will help drive productivity?

Hon STEVEN JOYCE: Although I do not often agree with Mr Walley, I can agree with that statement. But I note for the member that it is actually a truism. Yes, building skill levels are important, but it makes absolutely no comment on the correct amount to spend. Quantity does not necessarily imply quality, and what the member seems to be suggesting is that any amount of

money is better than any less amount of money no matter what it is spent on, and that was the problem with the previous Labour Government.

Freshwater Management Reform—Progress

8. CHRIS AUCHINVOLE (National—West Coast - Tasman) to the Minister for the

Environment: What progress is the Government making in improving New Zealand’s freshwater management?

Hon Dr NICK SMITH (Minister for the Environment): Yesterday I announced a doubling in the funding for the New Zealand Landcare Trust at a function in Golden Bay so as to support further community initiatives to improve water quality. The Landcare Trust—a partnership between Federated Farmers, Fish and Game New Zealand, and the Royal Forest and Bird Protection Society—was founded in 1996. The then National Government provided baseline funding of $400,000 per year but it has not been touched since. The strength of the Landcare Trust approach is empowering communities to take ownership of their local water quality problems. The success in Golden Bay, I note in answer to the member’s question, is that whereas 5 years ago 70 percent of the time people could not harvest shellfish in Golden Bay because of water pollution problems, that figure has been reduced to just 20 percent.

Chris Auchinvole: What other commitments has the Government made, in addition to doubling the funding for the Landcare Trust, that reinforce the importance of New Zealand doing better in managing water quality?

Hon Dr NICK SMITH: This Government has also hugely ramped up expenditure on waterquality initiatives in areas like Lake Taupō, the Rotorua lakes, and the Waikato River, with the investment over the years from 2009 to 2014 of $94 million. This is five times the amount of money spent over the previous 5 years, and it indicates the level of commitment this Government has to improving water-quality management in New Zealand.

Brendon Burns: Given that safe drinking-water is the most important use of fresh water, will the Minister now ask his benchmate to stop blaming the Christchurch earthquake and end the 14- month freeze on the $80 million of Government funding provided by Labour to help those one in five New Zealanders who still do not have water they can know to be safe?

Hon Dr NICK SMITH: The problem for my colleague the Minister of Health, like so many of my colleagues, is that the previous Government promised all sorts of millions of dollars to all sorts of people in its last year or two in Government when the money did not exist. One of the realities that this Government has had to deal with in a very tight fiscal environment is that it has been able to significantly increase the funding for improving freshwater quality.

Chris Auchinvole: What feedback has the Government had to the collaborative governance approach taken to freshwater management with the Land and Water Forum since it was raised last month?

Hon Dr NICK SMITH: I have been hugely encouraged by the public response to the report from the Land and Water Forum that shows that New Zealanders do want to see a fresh way forward on managing fresh water. The first public forum on the report was held last Wednesday at the top of the South Island. It was attended by over 120 stakeholders, and there was very strong support for the 50-plus recommendations. I encourage as many New Zealanders as possible to engage with the Land and Water Forum in its 17 workshops around New Zealand over the next 3 months so that we can find a constructive way forward in which we can better manage those challenging freshwater issues.

Early Childhood Education—Subsidies and Fee Controls

9. SUE MORONEY (Labour) to the Minister of Education: Does she stand by all her statements about subsidies and fee controls in early childhood education?

Hon ANNE TOLLEY (Minister of Education): Yes.

Sue Moroney: Will the existing subsidies of $12.45 per child per hour and $11.52 per child per hour for 20 hours’ early childhood education continue to be paid after 1 February 2011?

Hon ANNE TOLLEY: No. The funding changes to $11.12 per hour for the new 80 percent – plus rate. But I stress to the member that that still remains a premium subsidy of a $4.59 per hour - per child difference in funding for 20 hours’ funding from the ordinary other 10 hours in early childhood services.

Sue Moroney: Is the funding for 20 hours’ early childhood education exempt from her wideranging review of funding and policy settings for early childhood education, which she announced on 7 October?

Hon ANNE TOLLEY: No, but this Government promised to retain the subsidies and fee controls that make up 20 hours’ early childhood services. So we have maintained those fee controls, which prevent compulsory top-up changes, and we have maintained the subsidy premium the 20 hours’ early childhood services get over and above what non – 20 hours’ early childhood services get.

Sue Moroney: Is she concerned that her funding cuts to early childhood education mean that services such as the Kindergarten Association in Wanganui will have 14 fewer staff to provide quality early childhood education to children when her Government promised to improve adultchild ratios—it was the No. 3 election promise?

Hon ANNE TOLLEY: I say to that member that she does not quite understand what cuts mean. Cuts mean taking money from services. In fact, this Government added $107 million to early childhood education services this year.

Sue Moroney: I seek leave to table a document showing that there are—

Mr SPEAKER: Before the member says what it is showing, can we have the source of the document, please.

Sue Moroney: It is a media statement.

Mr SPEAKER: Is it a press statement?

Sue Moroney: Yes, it is a press statement showing that there are 14 fewer—

Mr SPEAKER: The member cannot do that. We have established rules now—we do not table press statements.

Marine and Coastal Area (Takutai Moana) Bill—Application of Resource Management Act

10. Hon RODNEY HIDE (Leader—ACT) to the Attorney-General: Is it Government policy to exempt the holders of customary marine title from the application of the Resource Management Act 1991 and provide the holders with the sole right to give, or deny, a Resource Management Act permission right with no right of appeal or objection against the decision, as described in Bell Gully’s newsletter update October 2010 on the Marine and Coastal Area (Takutai Moana) Bill?

Hon CHRISTOPHER FINLAYSON (Attorney-General): No.

Hon Rodney Hide: Is Bell Gully correct when it states that “… the holder of such a title has the sole right to give, or deny, an RMA permission right to any other person proposing a development within the area, and there is no right of appeal or objection against the decision.”, when that is exactly what clause 65 of the bill states; if not, why, exactly, is Bell Gully, in its update, wrong?

Hon CHRISTOPHER FINLAYSON: I have the greatest of respect for Bell Gully—

Hon Shane Jones: Why?

Hon CHRISTOPHER FINLAYSON: —because it is a great firm, but where it possibly went slightly away from the straight and narrow was where it conflated customary interests with customary title, and it is trying to treat the two the same.

Hon Rodney Hide: Is Bell Gully correct when it states: “It is the first time that legislation has been introduced which effectively removes the application of the Resource Management Act … to an … area.”; if he disagrees with that statement from Bell Gully, then could he please explain to the House why it is wrong rather than just give the explanation that Bell Gully conflated two concepts.

Hon CHRISTOPHER FINLAYSON: Yes, it is wrong.

Mr SPEAKER: Just before I call the Minister, I was going to point out to him that he does not have any responsibility for Bell Gully’s statements. But he can, of course, give an opinion on them, which he has already done. If the Minister wishes to repeat it more slowly, then he is welcome.


Whānau Ora—Process for Short-listing Providers

11. Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) to the Minister responsible for

Whānau Ora: Is she satisfied with the process to short-list Whānau Ora providers?

Hon TONY RYALL (Minister of Health) on behalf of the Minister responsible for Whānau

Ora: Yes.

Hon Nanaia Mahuta: Can the Minister confirm that an open and transparent process to shortlist successful providers for Whānau Ora has been undertaken?

Hon TONY RYALL: Yes, that is my understanding.

Hon Nanaia Mahuta: Can the Minister give an assurance that unsuccessful Whānau Ora applicants will not lose core funding from their existing service to vulnerable and needy families?

Hon TONY RYALL: Whānau Ora is about the integration of health and social services in support of families and whānau. It is not expected that those organisations that may not be in this first wave of Whānau Ora providers should necessarily have their funding reduced as a result of these changes.

Hon Nanaia Mahuta: Is the Minister satisfied that the current communications process has meant applicants have received timely and accurate information regarding her plans for the implementation of Whānau Ora?

Hon TONY RYALL: I am aware that a number of participants in the process have been advised of the outcome with respect to their own organisations, and that announcements of this very exciting Government initiative are expected on Friday.

Te Ururoa Flavell: When does the Minister expect that the first group of Whānau Ora providers will be announced?

Hon TONY RYALL: I expect that those first announcements will be made at the end of this week. The member will be interested to know that a total of 137 expressions of interest proposals were submitted, and the submissions included around 350 providers from around the country. Nearly 40 percent of all the expressions of interest were submitted on behalf of provider collectives, which is one of the more exciting elements of the outcome.

Te Ururoa Flavell: What has been distinctive about the process of selecting Whānau Ora providers?

Hon TONY RYALL: What has been distinctive about the process of selecting Whānau Ora providers is the willingness of providers to come together with other groups, including iwi authorities, to concentrate on a Whānau Ora - centred approach. What has become clear is that community organisations working with family and whānau were frustrated with the bureaucratic and nonsense, patronising approach of the previous Government, and they are excited by the opportunities that Whānau Ora presents them and their communities.

Hon Nanaia Mahuta: Can the Minister confirm that Te Puni Kōkiri has had a role in that process; if so, why is not the Minister of Māori Affairs responding to the process questions that have been asked today?

Hon TONY RYALL: I can confirm that Te Puni Kōkiri has been involved in this process. I can also confirm that the Government makes decisions on who will answer questions on behalf of the Minister. The fact that I am answering this question on the Minister’s behalf indicates how this Government is working collectively in support of the Whānau Ora effort. We are not interested in silos, like that failed party opposite.

Energy Efficiency—Energy Spot Advertising Campaign

12. PESETA SAM LOTU-IIGA (National—Maungakiekie) to the Minister of Energy and

Resources: Why is the Government funding the Energy Spot advertising campaign?

Hon GERRY BROWNLEE (Minister of Energy and Resources): The Energy Efficiency and Conservation Authority estimates that each household can easily save 10 percent on its electricity bill by taking just a few simple measures. That works out to savings of about $200 per household, or $320 million in savings, each year across the whole country. The Energy Spot campaign has been delivering practical energy-efficiency tips to New Zealanders for over 1 year now. Research by the Energy Efficiency and Conservation Authority shows that 62 percent of adults recall seeing the Energy Spot, and of those who have seen it, 43 percent have taken action as a result. It is about encouraging people to save on energy costs.

Peseta Sam Lotu-Iiga: What other energy-efficiency programmes has the Government funded?

Hon GERRY BROWNLEE: The Government is committed to offering practical energyefficiency programmes that not only help New Zealanders to save on power and fuel bills but also reduce energy demand. Aside from Energy Spot, the Government is spending $347 million on making New Zealand homes warmer, drier, and healthier through the Warm Up New Zealand scheme. The Government has also removed road-user charges for electric vehicles and is providing subsidies for solar hot-water heaters and hot-water heat pumps, amongst other programmes.


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