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Questions And Answers March 9

(uncorrected transcript—subject to correction and further editing)




Earthquake, Christchurch—Measures to Meet Fiscal Cost

1. PESETA SAM LOTU-IIGA (National—Maungakiekie) to the Minister of Finance: What are some of the issues the Government will consider to meet the expected fiscal cost of the Christchurch earthquake?

Hon BILL ENGLISH (Minister of Finance): Based on an early assessment of the combined cost of the two earthquakes, the cost to the Government could be about $10 billion over the next few years. This will almost certainly involve a combination of the Government taking on a bit more debt in the short term. There is not much choice about that. We are incurring significant costs as we speak. Also, there is the issue of how much of our existing spending can be redirected towards Christchurch, and a likely increase in Earthquake Commission levies, I expect, alongside an increase in other insurance premiums. The Government will not allow an increase in debt to become permanent. We remain committed to a long-term goal of reducing our debt and vulnerability to foreign lenders.

Peseta Sam Lotu-Iiga: What are some of the likely costs the Government will face as a result of the earthquake?

Hon BILL ENGLISH: Some of the direct costs will be at least $3 billion for residential property claims from the Earthquake Commission before reinsurance cover applies; significant contributions to local infrastructure—roads, water, stormwater, sewerage, and stopbanks—and potentially large costs around land remediation, depending on policy decisions there; and, of course, temporary assistance to families, individuals, and businesses from the various support packages that the Government is making available in Christchurch.

Peseta Sam Lotu-Iiga: What are some of the fiscal policy options the Government might consider in response to the earthquake?

Hon BILL ENGLISH: Sound fiscal policy is a good idea under any circumstances, regardless of whether there are extra costs for the earthquake. The Government, as signalled by the Prime Minister earlier in the year, was looking to make progress towards surpluses more quickly. It is certainly not now possible to get there more quickly than we expected, but any changes that the Government makes will ensure that we stick to principles we have employed so far: protecting the vulnerable, maintaining front-line public services, and maintaining our policies for a long-term improvement in economic growth.

Rahui Katene: What assurance can he give the House that low-income families receiving Working for Families or families where income support is the primary source of income will not be targeted for savings to meet the fiscal costs of the earthquake?

Hon BILL ENGLISH: I can give the member the assurance that low-income families and families for whom income support is the principal source of income will not be expected to make contributions.

Peseta Sam Lotu-Iiga: What will the earthquake mean for the Government’s wider economic programme to build a faster-growing economy and higher incomes?

Hon BILL ENGLISH: Although the earthquake is a very significant and tragic event, it merely underlines the importance of the Government getting on with its longer-term programme to build a faster-growing economy. It is essential that we get our finances in order to accommodate the costs of the earthquake but also that we continue with long-term investment in infrastructure, raising educational standards, providing a more productive and effective public service, and continued tax reform, because these things will give us a stronger economy, which will help us to recover from the earthquake.

Earthquake, Christchurch—Extent of Damage to Housing

2. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that, in Christchurch, “up to 10,000 houses will need to be demolished and over 100,000 more could be damaged.”?

Rt Hon JOHN KEY (Prime Minister): Yes. It was a preliminary figure from the Earthquake Commission’s geotechnical engineers as a result of the early modelling of their observations. I have absolutely no reason to dispute their expert advice.

Hon Phil Goff: Does the Prime Minister accept that speculation by him about whole neighbourhoods having to be demolished has, according to the people in Bexley and Burwood whom I spoke to this morning, unnecessarily caused anxiety, distress, and uncertainty, because there is no follow-up as to which neighbourhoods he was referring to and what will be done to help them?

Rt Hon JOHN KEY: To the best of my knowledge I have never said that whole suburbs would be abandoned. I have said that streets, houses, or areas may be abandoned. That is as a result of very, very significant damage. We will not know exactly those areas until we get the absolute geotechnical advice. I can say to those householders in that position that as soon as we get that advice we will not only release that advice to them but also share with them the options that are presented to them.

Hon Phil Goff: Does the Prime Minister accept that it is better not to speculate about those sorts of things until those areas can be identified by geotechnical reports and there can be back-up support and assurance to the residents who will be so affected?

Rt Hon JOHN KEY: If I had gone out there and named streets, areas, or houses without geotechnical advice, then I think the Leader of the Opposition would have a point. That is not what I have done. The reality is that the issue is not ultimately whether 9,000, 10,000, or 11,000 homes are demolished; the issue is which homes will be demolished. It is blatantly obvious to anyone who has been in Christchurch that a significant number will be demolished. We know, as a result of the first earthquake, that 3,500 homes are to be demolished and 8,000 homes, in total, breach the $100,000 cap. We also know that as a result of this earthquake there has been substantially more damage. For the Government not to give an indication of the likely extent of damage to both business and consumers is, quite frankly, treating the people of Canterbury with contempt. We actually need to share with them the level of information we have and also share with them the options that may be presented to them.

Hon Phil Goff: Given the huge amount of rebuilding work that will need to be done, what is he doing at the moment to ensure that as many local people as possible who are currently unemployed, with 9,000 more being made redundant, can be upskilled to do some of that work and prevent a crisis in shortage of skilled labour?

Rt Hon JOHN KEY: Firstly, I cannot speak for every building contractor who will be involved in the projects, but I know that from Fletcher’s perspective it is trying to use local contractors. Secondly, the Government is attempting either to have the cordon moved or, ultimately, to be in a position where Christchurch Polytechnic Institute of Technology can get back to business. It trains a lot of people in the skills area. I am sure that over the course of a number of years in the future there will be enormous demand for people in the construction sector, and I think those people will find work in Canterbury. There is very little in the way of silver linings as a result of this earthquake but if it provides employment and skills for some young people, then I think that is one of them.

Hon Phil Goff: Is the Prime Minister aware that the building and construction industry in Christchurch is still downscaling, that companies are going into liquidation, and that apprenticeship numbers and training numbers are being reduced when there will be a huge demand for skilled labour within 6 to 12 months, and what specifically is he doing to address that need?

Rt Hon JOHN KEY: I hate to go back to the basics of supply and demand, but if we look at what is going to happen to Christchurch over the next number of years, we think that in the order of $20 billion will be spent on infrastructure. We know that some workers will want to relocate from around New Zealand and that some companies will draw on their New Zealand - wide staff, but it is blatantly obvious for anyone to see that as that rebuilding process takes place there will be enormous opportunity. I, for one, happen to believe that plenty of people will either apply for courses or will find opportunities.

Hon Phil Goff: Does the Prime Minister not understand that although there will be enormous opportunities, if there are people who are currently being made redundant and unemployment is projected to rise to 7 percent in Christchurch over the next couple of months, then unless there are specific programmes to enable people to acquire those skills, it will not help the employment and economic situation in Christchurch if people are coming from around New Zealand and around the world, as he suggested today and yesterday?

Rt Hon JOHN KEY: That is not what I have said. What I have said is that I believe there will be great opportunities for the people who work in Christchurch. I am advised by the Minister for Tertiary Education that at the moment he is looking at those programmes and projects that will be available to them. I have absolutely no doubt that increasing numbers of young people will find employment in that area.

Hon Phil Goff: How does the Prime Minister respond to criticisms from within the industry itself, in Christchurch and around the country, that this Government does not have an adequate skills training programme and that there will be a major shortage of skills in the very trades we need to rebuild Christchurch within 6 to 12 months?

Rt Hon JOHN KEY: I am reliably informed by the Minister for Tertiary Education that that is total rubbish from the Leader of the Opposition. Secondly, let us get a little bit of perspective on what is going on. We have had an earthquake that has cost the lives of up to 200 people. We have a city that has had utter devastation wreaked upon it, and we are in a situation where 10,000 homes will probably be demolished and 100,000 additional claims are likely to be made. The city has been without power, water, and sewerage. The Government has been doing everything it possibly can in a 2-week period to restore those basic infrastructures. Yes, the issue of training more people is an important one, but if the Leader of the Opposition thinks that it is the most important one at the moment, he will be the Leader of the Opposition for a very long time, until the Labour caucus boots him out.

Hon Phil Goff: I raise a point of order, Mr Speaker. You will understand that having spent several hours this morning talking to really stressed and anxious people—

Mr SPEAKER: The member will resume his seat. The House will get into disorder if points of order are used for matters that have nothing to do with order. The member’s question verged on an allegation that the Government was ignoring an issue. The Prime Minister responded to that in his

answer, and that kind of question will get that kind of response. If the member wishes to ask a further supplementary question he can, but he cannot use the point of order process for that purpose.

Hon Phil Goff: I raise a point of order, Mr Speaker. I think you will agree that my question was a very straight question. It asked how the Prime Minister responded to criticism that had been made to me by the building industry that there was not an adequate programme—

Mr SPEAKER: The member will resume his seat. He is now using the point of order process totally incorrectly. The Prime Minister disputed the assertion made in the Minister’s question. The Minister answering is perfectly entitled to dispute a claim that is made in a question, and the Prime Minister did that. If the honourable Leader of the Opposition wishes to ask a further supplementary question, he certainly may do so, but he cannot raise points of order like that.

Hon Phil Goff: How does the one-third fall in apprenticeships taken on by the building industry, and the continuing collapse of building companies—one collapsing today—assist in the rebuilding process that will be necessary, on a massive scale, in Christchurch?

Rt Hon JOHN KEY: One thing that the Government can pat itself on the back for is that in the last 2 years it has supported a huge amount of the construction sector through the amount of work it has undertaken. This Government has supported that sector, and therefore ultimately it has supported training in that sector.

Hon Trevor Mallard: Will water and sewerage be reconnected in streets that, as he has indicated, are to be abandoned?

Rt Hon JOHN KEY: I always find that it is going badly when one has to revert to another member on the front bench.

Mr SPEAKER: Order. [Interruption] I am on my feet. The Prime Minister should not push his luck. He knows better than that.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I am deeply offended. I have been approached by people—

Mr SPEAKER: The member will resume his seat right now, or he will leave the House immediately. The House will come to order. I say to members that it is not a good look, at this time. The Prime Minister knew that that comment would lead to disorder. It was not wise. The House will come to order, and I warn the shadow Leader of the House that when I get to my feet, he will sit down, or he will leave.

Rt Hon JOHN KEY: I have not seen what the final recommendations will be, but if an area of land could not be remediated, and therefore properties could not be built on it, partly because they would not be insurable, then it would be very unlikely that water and sewerage would be connected there.

Marine and Coastal Area (Takutai Moana) Bill—Proposed Changes

3. Hon JOHN BOSCAWEN (Deputy Leader—ACT) to the Attorney-General: What changes, if any, is he proposing to the Marine and Coastal Area (Takutai Moana) Bill, and why?

Hon CHRISTOPHER FINLAYSON (Attorney-General): I answered the member’s question yesterday when I detailed two changes to the bill that would be proposed by way of a Supplementary Order Paper, as well as noting that there would be a number of technical amendments. That Supplementary Order Paper has been tabled and circulated, and I direct the member to it. The changes take account of public submissions, and submissions by officials, to ensure that the bill is properly integrated with existing legislation. It also addresses genuinely held concerns from submitters about access and negotiated agreements.

Hon John Boscawen: Why has he amended clause 27 of the Marine and Coastal Area (Takutai Moana) Bill to allow free access to apply only to individuals, and can he confirm that the word “individual” includes a group, such as a wedding party, a school group, or a staff picnic?

Hon CHRISTOPHER FINLAYSON: I would have thought that, according to basic principles of statutory interpretation, reference to a singular word would also include the plural.

Hon John Boscawen: What sort of commercial benefits will customary marine title holders be able to derive under clause 63 as amended?

Hon CHRISTOPHER FINLAYSON: Basically the same sort of commercial benefits that those who hold a freehold title are able to enjoy.

GDP Decrease—Outlook Prior to Christchurch Earthquake

4. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: How much of the cumulative $15 billion drop in GDP over the next 4 years, as identified in the Treasury’s February monthly economic indicators report, is a result of the “weaker [economic] outlook we were seeing prior to the February earthquake” in Christchurch?

Hon BILL ENGLISH (Minister of Finance): The member will find that outlined in Treasury’s monthly Economic Indicators report for February, which was published early so that people can have good information. It notes that of the $15 billion drop in GDP over the next 4 years about $10 billion of it relates to changes that occurred before the February earthquake. Just to clarify the expected growth path of GDP over the next 5 years, I say that the growth will be in excess of $1,000 billion and is expected to grow about 13 percent in real terms. The pre-quake revisions lower the cumulative projections by about 1 percent. So there was an expectation of 13 percent growth in real terms, but that growth is now expected to be about 1 percent less.

Hon David Cunliffe: Did Treasury indicate prior to the February earthquake whether unemployment for the next 2 years would be higher or lower than predicted in December 2010’s Half Year Economic and Fiscal Update?

Hon BILL ENGLISH: No, it did not, although in the absence of the earthquake it is likely that its employment forecast would have softened a bit. Treasury had just started its forecast round for the Budget when the earthquake hit. So, clearly, from here on both the original slow-down in the economy and the impact of the earthquake will affect employment. We would expect unemployment to be a bit higher in the short term, but in the longer term, as has been discussed in the House today, we are likely to have skills shortages by the middle of next year, which is a good sign for employment.

Hon David Cunliffe: Given that it was a priority for his Government to reduce public debt even at the cost of reducing services to New Zealanders, is he prepared to consider rolling back some of the tax cuts to high-income earners in order to spread the cost of the recent earthquake over time, or does he now consider it appropriate to borrow the lot and add it all to New Zealand’s international debt?

Hon BILL ENGLISH: We expect to spread the cost of the earthquake over future years. As I have outlined, there is not a lot of choice about taking on further debt. The earthquake has happened, and the Government has already in the last couple of weeks spent about $200 million to $250 million, because we believe in giving Canterbury and the people of Christchurch all the support they need. As I have outlined, we are going through a pretty considered process of how we can haul back the extra burden of debt that we are taking on in the short term.

Craig Foss: How much fiscal stimulus is reconstruction arising from the earthquakes likely to generate?

Hon BILL ENGLISH: The effect of the earthquake will come in a couple of phases. In the first instance it will be negative from the point of view of the Government’s books and its effect on our fiscal position. But when we look out over the future, we see that the expected rebound will be sizable. Our preliminary forecasts show total investment spending lifting by over 40 percent and residential investment by over 80 percent over the next 4 years. The size of the disaster will have to be matched by the size of the reconstruction effort. The combination means that next year we are likely to see growth rates lift above 4 percent on average across the economy, and that will be positive for employment.

Hon David Cunliffe: Further to my previous supplementary question, and leaving aside any possible change to the Earthquake Commission levy, is the Minister prepared to rule out for the House any change to tax rates levels or thresholds, or rule out a specific earthquake levy as part of the balanced consideration he is giving to spreading the costs of earthquake recovery over time?

Hon BILL ENGLISH: In the couple of weeks since this disaster the Government’s position has been pretty consistent: we are not ruling out a levy or equivalent measures. But it is our strong preference not to reverse the direction we have taken, which has been to improve incentives in the economy for savings, exports, and investment. Those measures will, in the long run, help us with stronger economic growth. We would prefer not to do that if we can avoid it.

Hon David Cunliffe: Given that answer, is he alternatively considering reducing entitlements under Working for Families—for example, those of a two-income family with three children where both partners work and earn a combined income of around $80,000 per annum?

Hon BILL ENGLISH: In respect of Working for Families, there was some discussion about it last week. The Government has indicated that it has not ruled out changes for higher-income earning families. Certainly, at this time—when people, particularly in Canterbury, are dealing with uncertainty—we will stick to our principle of protecting low-income earners.

Hon David Cunliffe: I raise a point of order, Mr Speaker. I think you will agree that it was a pretty straight question and it gave a specific and straight example of a two-earner family earning $80,000. The Minister replied that they were thinking of reversing Working for Families entitlements—

Mr SPEAKER: The member is rehearsing the entire question. In answering the question the Minister indicated that the Government has made no particular decision on the matter. How can he be more specific in respect of that specific example if the Government has not made specific decisions on it? That was my understanding of the Minister’s answer.

Hon David Cunliffe: I raise a point of order, Mr Speaker. I apologise; if I had a further supplementary question I would use it to perhaps work my way to the same clarification. I submit that within the ambit of a perfectly straight question is the question of whether a combined income of $80,000 qualifies—

Mr SPEAKER: The member will resume his seat; he is trying to relitigate the issue. I listened to the answer carefully. The Minister indicated that there had been discussions on the matter but that no decisions had been made, except—if I remember his answer correctly—that low-income families will be protected. The member cannot expect more of an answer if no final decisions have been made on the matter. The Minister cannot address the detail of that particular question.

Hon David Cunliffe: I seek leave to table Treasury’s February Economic Indicators report, which indicates that—

Mr SPEAKER: Do not all members have Treasury’s Economic Indicators report?

Hon David Cunliffe: They may or may not. It is not a press article.

Mr SPEAKER: It is not a press article but it is available to all members. We will not waste the time of the House on stuff that is available to all members.

Hon David Cunliffe: It shows unemployment rising and—

Mr SPEAKER: We will not waste time tabling stuff that is available to all members.

Earthquake, Christchurch—Coordination of Response

5. Dr KENNEDY GRAHAM (Green) to the Minister for Canterbury Earthquake

Recovery: Is he satisfied that there is enough coordination between central government agencies, local council, and non-governmental organisations in the response to the earthquake?

Hon MAURICE WILLIAMSON (Associate Minister for Canterbury Earthquake

Recovery) on behalf of the Minister for Canterbury Earthquake Recovery: Yes. One example is the coordinated effort by Ministry of Social Development staff, non-governmental organisations like the Salvation Army, community groups, and 400 volunteers in canvassing more than 70,000

houses in the suburbs most affected by the quake, to check on the well-being and safety of residents. A second example is the head of the UK urban search and rescue team, Peter Crook, being quoted in the New Zealand Herald as saying about the emergency response: “The organisation has been outstanding, the best-organised emergency I’ve been to.” However, as in any disaster of this magnitude, there will always be examples of situations where coordination could have been improved. But the Minister is assured that civil defence is doing its upmost to work with the city council and central government agencies to respond to the disaster. That is what the declaration of a state of national emergency is designed to do.

Dr Kennedy Graham: Is he concerned about the focus of effort between the central business district and the eastern suburbs? Has a fair balance been struck between the two?

Hon MAURICE WILLIAMSON: Based on all the evidence I have seen, I can say a very fair balance has been struck.

Dr Kennedy Graham: What steps is he taking to ensure that vulnerable people in the east of Christchurch, some of whom already live below the poverty line, will not be pushed over the edge by this crisis?

Hon MAURICE WILLIAMSON: I think that yesterday I indicated the number of civil defence grants that have been paid out to people, and the number of emergency subsidies towards housing that have been paid out. I am absolutely confident that if anybody is in dire straits and does need help, it is there. I made the offer yesterday that if any Canterbury member—because I think those members were all supplied with direct phone lines to the national coordinator—knows of a specific example that we have missed, the member should please not hesitate to let somebody know, and the issue will get dealt to.

Dr Kennedy Graham: I thank the Minister for that response. Having attended meetings this morning in the east, I will get back to him on that. Has he attended any local community meetings in the eastern suburbs; if not, will he accompany me to my next meeting?

Hon MAURICE WILLIAMSON: The Minister for Canterbury Earthquake Recovery is spending nearly all his time in Christchurch, and hence I can say that yes, he will have. I am doing most of the Wellington-end work, so although I have visited the place and been into the central business district and seen some of the devastation of the buildings, I have not attended any of those meetings.

Dr Kennedy Graham: Will the proposed central agency that is designed to handle the earthquake listen to the people of Christchurch by having their representatives involved in decision making?

Hon MAURICE WILLIAMSON: I think as time unfolds, the member will realise that a number of issues have to be dealt with right there and then, immediately. When any human life is involved and a building is causing a risk, a decision that would normally be taken over several weeks may have to be made in that minute. But I give an assurance that where life is not at risk, or human safety is not at risk, a measured, careful process of making decisions will be followed.

Dr Kennedy Graham: Will all the information that the central agency uses for decisions be made available to the public?

Hon MAURICE WILLIAMSON: It would be a bold call for me to answer that all of the information would be. Where it is possible, information will be made available to the public..

Dr Kennedy Graham: Will the Government consider a cross-party group with direct advisory powers into Cabinet for the Christchurch rebuild?

Hon MAURICE WILLIAMSON: I am really reluctant to give answers about anything of a hypothetical nature into the future, because a lot of decisions are yet to be taken on this track. I assure the member there is a long, long way to go. We will be working on this issue for a very long time, so I cannot speculate on what may occur into the future.

Dr Kennedy Graham: I raise a point of order, Mr Speaker. With respect, the question was specific. It was not asking for speculation in the future but asking whether the Government will consider doing that now.

Mr SPEAKER: I think the Minister indicated that the Government is not prepared to do that; otherwise he would have said yes. Although the Minister may not have used those precise words, he has not jumped to his feet to say the Speaker’s interpretation was wrong.

Marine and Coastal Area (Takutai Moana) Bill—Passage

6. Hon DAVID PARKER (Labour) to the Attorney-General: Is it his intention to further progress the Marine and Coastal Area (Takutai Moana) Bill this week?

Hon CHRISTOPHER FINLAYSON (Attorney-General): My intentions are irrelevant. It is the Government’s intention that matters. The bill—[Interruption]

Hon David Parker: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: A point of order has been called.

Hon David Parker: My point of order is that the Standing Orders prevent me from asking questions of the Government and allow me only to ask questions of Ministers.

Mr SPEAKER: I hear what the member is saying, but when I saw this question my immediate reaction was that there were plenty of outs in it for the Minister, because a single Minister does not determine the Order Paper of this House. If the member had worded his question slightly differently, he would have, I think, avoided this. There are a couple of questions on today’s Order Paper—

Hon Member: It’s up to the Clerk.

Mr SPEAKER: —where I would suggest members need to give some thought to the wording. It is not the Clerk’s responsibility.

Hon David Parker: Then it’s in order.

Mr SPEAKER: I am not saying that the question is not in order; the question is in order. It is just that the wording of the question leaves the Minister able to give the kind of answer he did. I invite the member to think about his question. It is very easy to see how it could have been reworded to actually make what the member was seeking less easy to avoid. There are two questions on today’s Order Paper that struck me immediately. They are badly worded. It is not the Clerk’s responsibility. They are in order. It is not the Clerk’s responsibility to help members get their questions better. But the Minister—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Numerous Speakers have ruled that any Minister can speak on behalf of the Government, and they are—

Mr SPEAKER: The member will resume his seat, please. That is not the issue. And the member is debating an issue. It is just that this particular question, from the way it is worded, asks “Is it his intention to further progress” the bill. A Minister cannot determine whether a bill is further progressed. Wording that would have worked far better would have been “Is it his intention that the bill should be further progressed this week?”. I invite members to think about—[Interruption] The member may react like that, but Ministers are perfectly at liberty to look at the wording of a question and to answer the question in terms of the way it is worded. Think about how questions are asked. As I say, two on today’s Order Paper are carelessly worded.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. And despite what some people think, you know that I do not like debating these. That Minister said: “It is not a matter for me, but for the Government.” He is speaking for the Government—

Mr SPEAKER: That Minister is not responsible for the order of business in the House. That is a matter for the Leader of the House and not for that Minister. [Interruption] When I am on my feet, the members will not carry on like that. That is something that is very clear, and the Minister, I am sure, will give some kind of answer if members will only let him. But it was very clear to me from the way that question was worded that this problem would emerge.

Hon CHRISTOPHER FINLAYSON: I was going on to say before I was interrupted that the bill is not on the Order Paper for today as it is members’ day. If the member wants to know how the bill will proceed, I suggest he speak to the Leader of the House, who has responsibility for House business—quite simple.

Hon David Parker: Will the Attorney-General recommend to the Government that it refer his 73-page Supplementary Order Paper, which was tabled just today and which is two-thirds of the length of the original bill, to the Māori Affairs Committee for public submissions before advancing the bill in this House?


Hon David Parker: Will he at least refer the 73-page Supplementary Order Paper to the committee for consideration by the committee, even if he will not allow public input?


Hon David Parker: Will the Attorney-General table in the House the legal advice about the effect of the crucial threshold test for the establishment of a customary marine title, including analysis of the proportion of New Zealand’s foreshore and seabed that is expected to be met by that threshold test and comparisons with tests for customary title applied overseas in places like Canada and Australia, or does he want us to continue to do this blindfolded?

Hon CHRISTOPHER FINLAYSON: No. I follow the practice established by Dr Cullen about making legal advice available.

Earthquake, Christchurch—Processing of Resource Consents

7. CHRIS AUCHINVOLE (National—West Coast - Tasman) on behalf of NICKY

WAGNER (National) to the Minister for the Environment: What changes has the Government made under the Canterbury Earthquake Response and Recovery Act to facilitate recovery and the processing of resource consents to enable Christchurch to rebuild as quickly as possible?

Hon Dr NICK SMITH (Minister for the Environment): Changes adopted yesterday will enable land remediation work to progress far more quickly. This is essential because before houses can be rebuilt and before permanent infrastructure like roads, footpaths, sewerage, and water can be built in some areas where land has been liquefied during the earthquake, the land needs to be remediated. Every day involved in the processing of consents for this work is a day longer that families are displaced and a day longer that families are without basic services. That is why such a high priority for the Government is to have efficient processes so that this work can start as soon as possible. The first consent application for this work is expected next week.

Chris Auchinvole: How long could it take to get resource consents for the land remediation works if the Government did not use the Order in Council mechanism of the Canterbury Earthquake Response and Recovery Act?

Hon Dr NICK SMITH: There is no provision in the district or regional plans in Canterbury for construction of stone piles or the consolidation work that is needed to repair the now large areas that were subject to severe liquefaction. So the consents would need to be notified, they would be subject to full public hearings, and they would be subject to appeals to the Environment Court. That could take anything from a minimum of 3 months to as long as 2 or 3 years. The streamlined process that the Government has approved will allow written submissions by affected parties, and a decision can be made within a fortnight.

Chris Auchinvole: What is the purpose of the other Order in Council passed yesterday in respect of the Resource Management Act for temporary accommodation and works depots?

Hon Dr NICK SMITH: Normally resource consents would be required for erecting temporary accommodation and for establishing works depots, of which a large number will be required in Christchurch. The changes we have made enable councils and the Department of Building and Housing to erect temporary buildings such as site offices, temporary accommodation, and sewerage facilities to assist the earthquake reconstruction work. Landowners’ permission will still be

required, but this will enable reserves, the margins on the area of roads, and other areas to be quickly utilised for the essential temporary infrastructure that will be required to support the rebuild of Christchurch.

Charles Chauvel: Can the Minister assure the House that past changes made under the Canterbury Earthquake Response and Recovery Act have not contributed to an increased rate of death or serious injury in the 22 February earthquake?

Hon Dr NICK SMITH: It is too early to speculate on the cause of death of the estimated 200 victims of the Christchurch earthquake. But I note that a number were killed by older buildings that would not meet a modern earthquake standard. The provisions by which those buildings can be removed are complex, and it is possible that some buildings that should have been removed after the 4 September earthquake contributed to the loss of life on 22 February.

Charles Chauvel: Is the Minister aware of concerns about the consistency and accuracy of the use of the green, red, and yellow card system under the Canterbury Earthquake (Building Act) Order, is he further aware that both the Pyne Gould Corp. and the Canterbury Television buildings both received green cards under the provisions of that emergency order, and does he accept that real care is needed when the wide powers available under the emergency legislation are used?

Hon Dr NICK SMITH: The member’s question goes beyond my responsibility for the resource management and environment provisions, but I note that the Prime Minister has stated that there will be a full inquiry into the reasons for the collapse of the CTV building and the Pyne Gould Corp. building. As an engineer I urge people to await the proper process for establishing the cause of collapse and death, before drawing simplistic conclusions.

Charles Chauvel: I raise a point of order, Mr Speaker. The primary question addressed to the Minister asked the Minister to speak on behalf of the Government in respect of the Canterbury Earthquake Response and Recovery Act and orders made thereunder to facilitate recovery. The Minister was quite happy to answer questions beyond the brief of his particular portfolio in respect of that primary question. I do not know that it is fair to seek to avoid answering the thrust of my question simply because it may, on narrow grounds, fall outside the warrant of the Minister for the Environment.

Mr SPEAKER: Because the question and answer have both been handled quite seriously, I will hear from the Hon Dr Nick Smith.

Hon Dr NICK SMITH: The questions I have answered are specifically about changes to the Resource Management Act; they are absolutely my responsibility. The latest question from the member was in respect of issues in the Building Act and the red, green, and orange sticker system that are the responsibility of the Minister for Building and Construction.

Mr SPEAKER: I hear both members. I wish I could satisfy the member because I acknowledge fully the care he has taken in preparing his questions, which are perfectly good questions. But I do accept the Minister’s point that he cannot answer specifically on issues outside his area of responsibility. I think good questions were asked, and I think the Minister did his best to answer. I thought the Minister gave very genuine answers in his attempts to answer the questions, and I regret I cannot satisfy the member, whose questions were good. But I think the Minister is right in that he cannot answer outside his portfolio responsibility areas.

Earthquake, Christchurch—Insurance Cover

8. Hon JIM ANDERTON (Leader—Progressive) to the Minister for Canterbury

Earthquake Recovery: Does he stand by his comment in the House yesterday that “there is a period in which insurance companies will not provide cover”; if so, what will the Government do to assist people who have already signed purchase contracts and are seeking insurance cover?

Hon MAURICE WILLIAMSON (Associate Minister for Canterbury Earthquake

Recovery) on behalf of the Minister for Canterbury Earthquake Recovery: Yes, and I am advised that the same issue arose after the 4 September earthquake. Following that event, a range of

quite creative and innovative legal solutions was provided by the legal fraternity, which made it possible for these contracts to be entered into and to function. I therefore advise people to consult their lawyers to see whether those same mechanisms can be employed in the interregnum of this earthquake.

Hon Jim Anderton: I am well aware of the process after the first earthquake, but I say to the Minister—

Mr SPEAKER: The member should be asking a question.

Hon Jim Anderton: Does the Minister understand that the insurance risk for Christchurch homeowners is currently much greater than normal; if so, what does the Government plan to do to help owners desperate to have insurance cover for the most valuable asset they own?

Hon MAURICE WILLIAMSON: I repeat that I am told that the legal fraternity found a number of quite innovative and creative ways. For example, the new owner may actually just rent the property for some time, while the old owner keeps the title. The insurance that was on the property would therefore carry on. The owner would get ownership only once insurance is provided. But I point the member to an article in the Christchurch Press today, in which the largest insurance company in the area has said that it will continue to insure a house currently insured with it, even if the new purchaser is not a customer of that company, both previously—and so on. I hope other insurance companies will follow that lead and do the same.

Hon Jim Anderton: Whatever the Minister may hope, what would he say to a constituent of mine who sought to rehouse her parents after their home was destroyed in the earthquake by buying an undamaged property in an area that sustained no damage, and who now finds, after the purchase price was agreed and cash placed in the solicitor’s trust account, that she cannot get insurance cover to enable the deal to proceed, despite approaching the company that provides cover to the current owners?

Hon MAURICE WILLIAMSON: I obviously cannot comment on a specific case, because there are always elements to it. I am told that people cannot proceed with a purchase if there is a mortgage involved, because the banks will insist on insurance cover. Therefore, there will be an out in that case. If this property was bought for cash—as the member might have indicated; I am not sure—then that might not be the case. But in the end I am told—and the Canterbury branch of the Law Society has been doing some work on this—of the creation of some quite innovative techniques that will allow people to keep their properties covered until the insurance industry reenters the market. That re-entry occurred not very long after the 4 September earthquake; I grant the member that this time it might be a little bit longer because of the magnitude of this quake.

Hon Jim Anderton: Whatever the insurance industry and the legal profession might be doing over a period of time, is the Minister aware of the stresses and strains on people who own homes that are uninsured; in that event, will the Government help to underwrite the risk to completely innocent homeowners of having an uninsured home while it negotiates with the insurance industry to restore full insurance cover?

Hon MAURICE WILLIAMSON: As I said earlier, I am not sure it will be as widespread as that. If the largest insurer says that it will make sure its coverage carries on to a change of owner, I am sure the other companies will follow, because the market will not allow one to take such a beneficial rate. But in the end, as I said, I am told that these creative mechanisms that the lawyers used resolved the problem in nearly case. For that reason alone, I do not think the Government will be getting involved in the insurance market.

Earthquake, Christchurch—Police Response

9. JACQUI DEAN (National—Waitaki) to the Minister of Police: What has been the response of the New Zealand police and their counterparts in other countries to the Christchurch earthquake?

Hon JUDITH COLLINS (Minister of Police): I would like to commend the New Zealand police and police staff from a host of other countries for the extremely thorough and professional

manner in which they have responded to this devastating event. Up to 1,200 police from throughout New Zealand and abroad have been working tirelessly in very difficult circumstances that have included extensively damaged buildings, distressed citizens, and frequent aftershocks. In addition, 75 staff from Police National Headquarters have been providing response coordination, intelligence, communications, and logistical support, and a further 32 staff in Palmerston North have been helping with data collation and missing person inquiries. I know that many people from the police and other agencies have gone well beyond the call of duty since 22 February. I would like to thank each and every one of those who have been helping Christchurch to recover from this terrible disaster.

Jacqui Dean: What particular support has been provided by police from overseas jurisdictions?

Hon JUDITH COLLINS: I would like to pay special tribute to the 439 police and specialist personnel from outside New Zealand who have been working shoulder to shoulder with our officers. We have been extremely grateful for the provision of 323 police from Australia alone, as well as personnel from countries such as Singapore, China, Thailand, Japan, Israel, and the United Kingdom. These individuals have been carrying out a range of general policing functions, and providing specialist expertise for the highly demanding and complex task of disaster victim identification. I would like to offer my sincere thanks to them and to their Governments for providing this support to us in our time of need. It is deeply appreciated.

Question No. 8 to Minister

Hon JIM ANDERTON (Progressive—Wigram): Apologies to the House; I meant to seek leave to table a report compiled by the Parliamentary Library on the public responses of the insurance industry to the home insurance issues facing Canterbury.

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.

Health Service—Cost of After-Hours Medical Treatment

10. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Health: Is he satisfied with the cost of after-hours medical treatment?

Hon Dr JONATHAN COLEMAN (Associate Minister of Health) on behalf of the Minister

of Health: I am concerned about the costs of some after-hours services, despite the fact that this Government is putting an extra $144 million into primary care over 4 years. There has always been a wide variation in after-hours charges, as those clinics are privately owned. This Government is supporting a range of initiatives, including a new 10-clinic after-hours network in Auckland, nurse telephone triage systems, and weekend clinics.

Grant Robertson: Is he aware that in Queenstown an after-hours consultation can cost $139 for an adult, $123 for a child, and $102 for a baby; if so, what is he doing to address that situation?

Hon Dr JONATHAN COLEMAN: Yes, I am aware of those figures, which are a substantial improvement on the situation when Damien O’Connor was asked in 2004 about after-hours care in Queenstown. He said: “I am aware of some excessive charges for after-hours services in Queenstown, for example, where some general practitioners have been asking for over $200.” I think that member would have to agree that under this Government the situation—

Grant Robertson: Not true.

Hon Dr JONATHAN COLEMAN: It is true; it is here in the Hansard. The system has improved substantially.

Grant Robertson: What responsibility does he take for high after-hours charges, or does he agree with the Ministry of Health that practices should check themselves? When will his Government take responsibility for these charges?

Hon Dr JONATHAN COLEMAN: As I said in my opening answer, there is concern about after-hours charges in some areas of the country, but it is a longstanding problem and we are working to address it. We are putting an extra $144 million into primary care over 4 years, and there are specific initiatives like nurse telephone triage systems, weekend clinics, extra funding for emergency departments to provide overnight services, and extra funding for longer evening services. It is a chronic problem but steps are being taken to address it.

Grant Robertson: Does he think it acceptable that a 14-year-old visiting an after-hours clinic in Auckland was charged $66 for a routine consultation, or that a community services card holder in Ashburton was charged $47 for a consultation?

Hon Dr JONATHAN COLEMAN: As I say, there are some issues in various parts of the country, but we expect that district health boards and primary health organisations will be working together to address this problem. The previous Labour Government failed to address this problem; it is not an easy one.

Grant Robertson: What specific things will he do outside of Auckland to address after-hours charges that are now becoming, according to one provider, beyond the means of many people?

Hon Dr JONATHAN COLEMAN: I think I have listed quite clearly the specific things that we are doing, but I can go through the list again if the member would like me to: nurse telephone triage systems, weekend clinics, extra funding for emergency departments to provide overnight services, extra funding for longer evening services, a network of 10 after-hours clinics that are planned in Auckland, $850 million going into primary care, and $144 million over 4 years going into afterhours services including $14 million specifically for after-hours services, split between rural and urban areas. There are very specific measures.

Earthquake, Christchurch—Emergency Housing

11. TIM MACINDOE (National—Hamilton West) to the Minister of Housing: What assistance is available for people who require emergency housing following the earthquake on 22 February?

Hon PHIL HEATLEY (Minister of Housing): Housing New Zealand Corporation and Department of Building and Housing staff have been working round the clock to secure temporary housing solutions for those in need. More than 3,900 people have offered emergency accommodation, many through the 0800 HELP 00 service. This figure significantly outweighs the 1,022 requests for accommodation received, so supply is outstripping demand at this point. Some of these people required immediate assistance, although others have registered as being currently housed but in need of assistance over the coming weeks. We know that many people have temporarily left Christchurch, but that in the coming weeks they will want to return to their homes, work, and schools. We anticipate that the demand for accommodation will grow.

Tim Macindoe: What work is the Government doing on longer-term temporary accommodation options?

Hon PHIL HEATLEY: The department is working with the civil defence controller on two further stages of accommodation. The next stage is options for the next 6 months. This includes sourcing self-contained motor homes and modular housing and appropriate land for them to reside on. Campervans and motor homes from various suppliers are being held, and contracts are in the process of being finalised. These are expected to be moved on to holiday parks and public sites next week, and they will be taken up as demand dictates. Alongside this a plan has been developed for longer-term temporary housing, which will follow in the next few years while people’s homes are being built. I must say this will only supplement whatever housing people arrange for themselves. Our experience is that most people will make their own arrangements, and we would like to support them in doing that.

MediaWorks—Payment to Crown

12. Hon TREVOR MALLARD (Labour—Hutt South) to the Minister for Communications

and Information Technology: Who made the decision to defer MediaWorks’ payment of $43 million to the Crown?

Hon STEVEN JOYCE (Minister for Communications and Information Technology): Cabinet made a decision in October 2009 to offer all radio broadcasters deferred payment terms on their spectrum licence renewals. MediaWorks was one of nine companies to take this up. I would note that I put out a press release announcing the deferred payment option on 22 October 2009— some 17 months ago.

Hon Trevor Mallard: Did he take part in that Cabinet discussion?

Hon STEVEN JOYCE: Yes, I did take part in that discussion.

Hon Trevor Mallard: Was Cabinet told that the interest rate was between one-half and onethird of banks’ rates at the time for distressed companies?

Hon STEVEN JOYCE: Cabinet made a decision on the interest rate to be offered, and the announcement that I made subsequent to that decision was that it would be 9.5 percent plus the inflation rate at the time, which I think worked out in the case of the company in question at about 11.2 percent.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. The question was not what the rate was; it was whether Cabinet was apprised of a particular fact. [Interruption]

Mr SPEAKER: The members will not exchange comments. I invite the member to repeat his question, to avoid further problems.

Hon Trevor Mallard: Was Cabinet told that the interest rate was between one-third and onehalf of banks’ rates for distressed companies?

Hon STEVEN JOYCE: I will repeat my answer. Cabinet was told, and I announced afterwards that the interest rate would be 9.5 percent plus the inflation rate applying at the time, which is what Treasury recommended as a rate for the loan. That was announced in the press release.

Hon Trevor Mallard: Will the current 11 percent interest rate made available to that distressed company also be made available to distressed companies suffering from the effects of the Canterbury earthquake?

Hon STEVEN JOYCE: The member confuses himself. This was deferred payment terms for radio spectrum licence renewals. It was announced at the time, and it was done at the time because a significant number of renewals were required at the same time as the economic recession was at its worst. Cabinet made the decision to allow those payments to be made over time, provided that there was no cost to the Crown and that interest was recovered, and that is what happened.

Sue Kedgley: In the light of the Government’s decision to allow the privately owned broadcaster MediaWorks to defer payment of $43 million to the Crown, will the Government end its 5-year funding freeze on Radio New Zealand and not require a full-year dividend from State broadcaster Television New Zealand (TVNZ); if not, why not?

Hon STEVEN JOYCE: I do not have responsibility for either TVNZ or Radio New Zealand. However, I point out that private broadcasters pay for their frequencies and Radio New Zealand does not. So if we are in the business of saying that there should be equal treatment, then either Radio New Zealand has to start paying or the private broadcasters have to stop.

Hon Trevor Mallard: Now that the 11 percent rate has been established as an appropriate rate for deferrals or loans—

Hon Steven Joyce: No, that’s not correct.

Hon Trevor Mallard: —has been established as an appropriate rate for a deferral, which is shown in the MediaWorks accounts as a loan—will it also be made available to businesses in Christchurch?

Mr SPEAKER: The Minister can only answer that within his ministerial responsibilities. If he can answer it within his ministerial responsibilities he is welcome to try.

Hon STEVEN JOYCE: All I can say is that it is a deferred payment for frequencies, and the member needs to understand that. I point out too that, ultimately, if the Government had not offered it and radio broadcasters had gone broke, then the member and his friends would have been accusing us in the House of not doing anything to help save jobs in the broadcasting industry. [Interruption]

Mr SPEAKER: The Hon David Cunliffe and the Minister will cease that. I have called—

Hon David Cunliffe: Threatening a member, are we?

Mr SPEAKER: I say to the Hon David Mr Cunliffe that if he wants to be the third person to leave the Chamber since I have been Speaker, he should just keep doing that.


Student Loan Scheme—Report-back Date

1. STUART NASH (Labour) to the Chairperson of the Finance and Expenditure

Committee: What is the expected report-back date for the Student Loan Scheme Bill?

CRAIG FOSS (Chairperson of the Finance and Expenditure Committee): The report-back date for the bill is 14 April 2011.

Stuart Nash: Did he recommend to the Finance and Expenditure Committee that the report-back date be deferred to take on board proposed changes to the student loan scheme?

CRAIG FOSS: I raise a point of order, Mr Speaker. You have ruled in relation to various questions to members recently that items that are before a committee are obviously part of the committee’s business and you have ruled out those questions.

Hon Trevor Mallard: Mr Speaker, you have very specifically ruled that actions of the chair in relation to the chair’s responsibilities and the chair’s recommendations are matters on which the chair can be questioned.

Mr SPEAKER: I appreciate the advice from the Hon Trevor Mallard. It has been my view in my rulings in the past that when, for example, the chair might choose to call further submissions, the chair can be questioned about that. So the chair can be questioned in relation to actions of the chair that are the chair’s responsibility. I do not think the question should be ruled out. Unless members believe that I have got that issue wrong, I believe that the question was in order. I will have a look at the note the Clerk has prepared for me. The advice I have is that the committee’s consideration is confidential to the committee. If such a recommendation is part of the confidential proceedings, then the chair cannot be questioned on that. I accept absolutely that we are getting down to a pretty fine line here. I will listen to the supplementary question again.

Stuart Nash: Did the chair recommend to the Finance and Expenditure Committee that the report-back date be deferred to take on board proposed changes to the student loan scheme?

Mr SPEAKER: I accept that that is a matter to do with the confidential considerations of the committee and I rule the question out of order. I apologise to the House for my lack of clarity on that.


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