Questions and Answers - 5 April 2011
(uncorrected transcript—subject to correction and further editing)
TUESDAY, 5 APRIL 2011
QUESTIONS FOR ORAL ANSWER
QUESTIONS TO MINISTERS
Earthquake, Christchurch—Poll on Temporary Levy on Income
1. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Finance: Does he agree with 57 percent of New Zealanders who, according to a recent UMR poll, support the introduction of a temporary earthquake levy to pay for the rebuilding of Christchurch?
Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: Paying for the rebuilding of Christchurch is not a simple choice of either introducing a levy or funding it through debt, which was one of the choices that was put to respondents in the poll. The Government is, in effect, already borrowing to pay for demands such as the welfare needs of Christchurch residents, and to ensure rebuilding can begin quickly. So the Government has to borrow initially; then the question will be how the money is paid back. What we do agree on is that New Zealanders want to see the burden of rebuilding Christchurch shared, and not fall only on Christchurch residents. I note that when the question was put in a different way to respondents in the same poll, 40 percent of respondents favoured the Greens’ levy plan, whereas a total of 51 percent of respondents preferred that the Government borrow to fund rebuilding, or make cuts in expenditure.
Dr Russel Norman: In light of yesterday’s financial statement to the Government showing that the Crown is in a worse-than-expected fiscal position, will he take the opportunity to reconsider a levy, rather than going further into debt to pay for the rebuild?
Hon STEVEN JOYCE: The reality is that we have to go into debt, because the money needs to be spent now; then the question will be about paying it back later. I also point out, though, that the Government has decided it will have a strong focus on its own expenditure and making sure that it is all spent well, taking into account whatever reprioritisation is possible, rather than imposing a levy.
Dr Russel Norman: Is he concerned that a big increase in Government debt could lead to a credit downgrade, and does he agree that a credit downgrade will add significantly to households’ mortgage payments?
Hon STEVEN JOYCE: Of course the Government would be concerned if there was a blowout in Government debt, and that is why it is very important to get the Budget right: to make sure that we prioritise all our expenditure properly and minimise the impact on our overall debt.
Dr Russel Norman: Does he agree that every dollar raised by a temporary earthquake levy is $1 less in borrowing, and every dollar less in borrowing reduces the risk of a credit downgrade and hence higher mortgage payments for New Zealand householders?
Hon STEVEN JOYCE: I have some trouble with the member’s premise. He seems to think we should just ignore what we are spending already, and just get people to write us cheques for more money. The Government is taking the view that it should make sure it gets the absolute best from
the expenditure it is already doing. I understand that the reality is that if we do the exercise on the Greens’ proposed levy, it shows that the levy would raise, at best, around $600 million a year, which would mean that people in Christchurch would be waiting a long, long time before we would be able to afford the rebuild.
Dr Russel Norman: Does the Minister share the concerns of many economists that severe Government spending cuts at a time when the economy is already fragile could result in a renewed recession?
Hon STEVEN JOYCE: I reject the characterisation of “severe” spending cuts. The Government will be prioritising its expenditure. We are doing it carefully, and members will have to wait to see the Budget.
Amy Adams: How long would the suggested tax levy actually take to fund the costs of the earthquake?
Hon STEVEN JOYCE: I understand that the proposal from the Greens is to raise the income taxes of those earning above $48,000 a year. Even ignoring the damage that that would do to economic growth and the erosion of the tax base, it would raise a total of around $600 million per year. At that rate it would take about a decade to fund the direct costs of the quake. That is notwithstanding the fact that the amount of interest on top of the debt would also have to be borrowed in the meantime. So such a levy could hardly be called temporary.
Dr Russel Norman: I seek leave to table a copy of the Greens’ proposal, which shows that the levy would raise $1 billion per year.
Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.
Dr Russel Norman: Too much for you, huh?
Mr SPEAKER: Order!
Dr Russel Norman: Why is the Government ignoring the compassionate offer of New Zealanders to chip in to pay for a levy at $1 billion a year, which is a much more fiscally responsible approach, and one that avoids the risk of a credit downgrade due to increased borrowing, and that also avoids the risk of inducing a new recession if there are big spending cuts in the Budget?
Hon STEVEN JOYCE: I note that it is a compassionate offer by the Green members on behalf of a whole bunch of New Zealanders they do not speak for. I think that is largely what is going on here. That is cool and everything, but the reality is that the Government believes strongly that we can reprioritise expenditure. As I have said, the Budget will be out in the middle or at the end of May, or something like that, and the Greens will have a chance to see how the Government will do that.
State-owned Enterprises—Shareholder Returns and Average Bond Rate
2. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: What, according to the 2010 Investment Statement of the Government of New Zealand, was the average total shareholder return over the last 5 years from State-owned enterprises and the average bond rate, and is that consistent with his statement that “it is the Government’s intention to use the proceeds of those initial public offerings to actually invest in other assets that the Government would have to fund through the Government bond rate”?
Rt Hon JOHN KEY (Prime Minister): The average total shareholder return for the Crown’s commercial portfolio over the last 5 years was 17.5 percent. However, most of the total return was from unrealised changes in value, and Treasury advises that those calculations are not particularly robust and are, in fact, potentially misleading. The average net dividend over the 5 years was only 4.6 percent. The average bond rate was 6 percent. In answer to the last part of the member’s question, I say yes.
Hon Phil Goff: If the average return from the State-owned enterprises to shareholders is 17 percent and the cost of raising money through bonds is 6 percent, how is the taxpayer the winner from selling off the State-owned enterprises instead of raising money through bonds?
Rt Hon JOHN KEY: The total average return—not the average return—is 17.5 percent, which is probably why the Leader of the Opposition wants the Government to resign. He wants to have a snap election because he is confused between our polling numbers and Labour’s polling numbers.
Hon Phil Goff: I raise a point of order, Mr Speaker. I think you have made the point in the past that superfluous comments at the end of the Prime Minister’s statements—[Interruption]
Mr SPEAKER: I apologise to the member. Senior members know they should not interject during a point of order. The honourable Leader of the Opposition had not finished his point of order.
Hon Phil Goff: The point of order was quite clear. You have ruled in the past, Mr Speaker, that those sorts of comments at the end of an answer to a straight question are not in order.
Mr SPEAKER: I think the member makes a reasonable point that his question was not unfair and did not deserve quite that answer. I think the right honourable Prime Minister should come back to the question and actually answer it. If there is debate about it, I invite the honourable Leader of the Opposition to repeat his question.
Hon Phil Goff: How does the Government—and, therefore, the New Zealand taxpayer—benefit when the return from State-owned enterprises is about 17 percent and the bond rate is 6 percent?
Rt Hon JOHN KEY: I raise a point of order, Mr Speaker. Sorry, but that was not the question that the member asked the first time—[Interruption]
Mr SPEAKER: I say to the Labour front bench that a point of order is being heard and they will not interject. If the question was not the same, it seemed to me to closely approximate it. The Leader of the Opposition asked how the taxpayer benefited when the total—or whatever it is— return from State-owned enterprises was 17.5 percent and the bond rate was 6 percent. I can think of plenty of answers to that question that are available to the Prime Minister, but the Prime Minister did not use any of those answers, which could have been reasonable. The questioner did not attack the Government politically; he asked a reasonable question. I think that question deserves a reasonable answer.
Rt Hon JOHN KEY: I raise a point of order, Mr Speaker. I will paraphrase for the member: he claimed that the average return was 17.5 percent. He did not say “total”; he said the average return was 17.5 percent. That is totally different and completely incorrect. If he cannot work that out, then he obviously deserves a stupid answer.
Hon David Parker: Speaking to the point of order—
Mr SPEAKER: The member will resume his seat. The Prime Minister should know that it will not help the good order of the House to make that kind of comment during a point of order. I hear the point the member is making and that is why I invited the Leader of the Opposition to repeat his question, so that what he intended to ask could be asked. I accept the point the right honourable Prime Minister makes that the member may not have asked exactly what he intended to first time round. That is why I invited him to repeat his question.
Hon David Parker: I raise a point of order, Mr Speaker.
Mr SPEAKER: Well, I have invited his leader to repeat—[Interruption] Order!
Hon David Parker: Yes, I know, Mr Speaker. I am making this point with the approval of my leader. The mistake made was that the Prime Minister misinterpreted Mr Goff’s question. Hansard will show—
Mr SPEAKER: The member will resume his seat immediately. There is no need to go back over that old ground. There was a dispute over the exact wording of the question asked and that was why I invited the honourable Leader of the Opposition to repeat it, so that we can get an answer to the question that the honourable Leader of the Opposition intended to ask.
Hon Phil Goff: Will not the Government—and, therefore, New Zealand taxpayers—be net losers if the returns to the Crown from State-owned enterprises sold are worth more than the money he would save from not having to raise that money from bonds?
Mr SPEAKER: That was a somewhat different question, but still.
Rt Hon JOHN KEY: Possibly, but not necessarily. If that was always going to be the case then arguably that might be the situation. However, a mixed-ownership model may in fact allow the new entity to generate even more returns, so that is not necessarily the case. I can present to the member an example of where buying a State-owned enterprise did not yield a terribly good return for the New Zealand Government. That State-owned enterprise is called KiwiRail.
Hon Phil Goff: Was the percentage dividend return from State-owned enterprises earmarked for sale higher or lower than the 10-year bond rate last year?
Rt Hon JOHN KEY: I do not have that information to hand. But the point is not really what it was; the point is—if one wants to follow this argument—what the likely returns are vis-à-vis the Government bond rate over the next 10 years. I am not aware of those returns at this point.
Hon Phil Goff: Is he aware that the total return to the Crown of State-owned enterprises that are earmarked for sell-down has been double or treble the dividend return over the last 5 years?
Rt Hon JOHN KEY: As I said, that is not the average net dividend, which is what the Crown receives; it is actually from a benchmark Treasury analysis of its assets. As I said in answer to the primary question, Treasury advises that those calculations are not particularly robust; in fact, they are potentially misleading.
Hon Phil Goff: Does he propose to restrict the sale of shares in those State-owned enterprises to his so-called mum and dad investors, or will a substantial number of those shares ultimately find their way into the hands of foreign investors, with dividends being sent out of the country?
Rt Hon JOHN KEY: The Government is taking advice on how to prioritise New Zealand mum and dad investors. It is worth remembering, of course, that at all times the Government will hold a majority ownership; we will not go below 51 percent. It is also worth looking at Contact Energy as a good example of where New Zealand mum and dad investors bought shares. Although the shares may have individually changed hands, as Pattrick Smellie pointed out, it is actually misleading to say that they do not continue to hold them. In fact, as he wrote in a piece he did about a year ago, a loyal bunch of Contact Energy’s Kiwi shareholders—the register shows a very wide range of ownership by Kiwi mums and dads.
Hon Phil Goff: In respect of Contact Energy, which the Prime Minister has just mentioned and which was privatised by a former National Government, is it not correct that now more than $100 million a year goes out of this country and into the pockets of foreign investors, out of assets that were once owned, and benefited from, by all New Zealanders?
Rt Hon JOHN KEY: That might be the case, but I also point out, given that New Zealand has one of the highest levels of external liabilities as a percentage of GDP, that our borrowing, and therefore bond returns, would go overseas as well.
Hon Phil Goff: Is he aware of, and does he accept, the findings of energy expert Molly Melhuish that the sale of energy companies overseas to private shareholders, and pressures from them to increase profits, have resulted in the prices—[Interruption] I raise a point of order, Mr Speaker. I am sure the Prime Minister wants to hear the question. If his colleagues stop barracking, they might do that. [Interruption]
Mr SPEAKER: Both members will stand and—no, I will not ask that of the shadow Leader of the House, because it is somewhat difficult for him to stand up at the moment. But I say to both the Leader of the House and the shadow Leader of the House that I am on my feet—[Interruption] The Hon Simon Power will also respect that. The Leader of the House will not interject during a point of order, neither will the shadow Leader of the House—unless I got that wrong.
Hon Trevor Mallard: You got it wrong.
Mr SPEAKER: Someone on my left interjected. I apologise to the shadow Leader of the House. I understand it was the honourable Leader of the Opposition. I apologise to the honourable member; I obviously got that wrong. But both members will cease interjecting. OK, we have had a bit of fun now, but we will come back to order. While the Prime Minister has been answering questions there have been quite loud interjections from the Opposition, and I have not stopped them. Maybe I should have, but if I were to come down on the Government because of interjecting during that question, it would have been unfair of me. I ask members to be a little reasonable about the level of interjection. The Leader of the Opposition had better start his question again.
Hon Phil Goff: Thank you very much, Mr Speaker. Does the Prime Minister accept the findings of energy expert Molly Melhuish that the sale of energy companies to private shareholders, and pressure from those shareholders to increase profits, have resulted in the prices of electricity to Kiwi consumers for the shareholder-owned companies in New Zealand going up much faster than prices for the State-owned enterprises?
Rt Hon JOHN KEY: No. I point out that the dividend return over the 9 years that Labour was in office for the three State-owned enterprises in the energy sector—Genesis, Mighty River Power, and Meridian Energy—was 72 percent. If gouging was happening, it was actually happening under a Government-owned company.
3. DAVID BENNETT (National—Hamilton East) to the Minister for Infrastructure: What progress has the Government made on its infrastructure programme?
Hon STEVEN JOYCE (Associate Minister for Infrastructure) on behalf of the Minister for
Infrastructure: The Government is directly spending billions of dollars each year on improving infrastructure, and, with it, supporting thousands of jobs across the country. The latest example is the awarding, last week, of the $150 million contract for construction of the Ngāruawāhia section of the Waikato Expressway. Engineering works are expected to begin on site in September—about 3 years earlier than expected when a previous Government was involved. Construction of the Ngāruawāhia section will create up to 300 local jobs and when completed the Te Rapa and Ngāruawāhia sections together will provide a 20-kilometre long new northern entrance for the city of Hamilton.
David Bennett: How is the Waikato Expressway helping the regional economy?
Hon STEVEN JOYCE: Construction is already underway on the 7.5 kilometre Te Rapa link where 200 people currently are directly employed. In addition, there have already been over 1,100 contractors working on the project with tasks ranging from design and planning to construction and engineering. Once completed, the long-term economic benefits of the Waikato Expressway will be hugely important. It will bring the major cities of Auckland and Hamilton much closer together. The Government is committed to lifting productivity, creating jobs, and helping to get our goods to market more quickly.
Nikki Kaye: How does this fit into the Government’s wider improvements for infrastructure?
Hon STEVEN JOYCE: Work to unclog the arteries of our State highway network is just one aspect of the Government’s infrastructure investment. We are investing $7.5 billion in public amenities such as schools, State houses, hospitals, prisons, and ultra-fast broadband over 5 years. In addition, we are supporting KiwiRail through the $4.6 billion KiwiRail Turnaround Plan, and we have allocated $1.6 billion to metro rail improvements in Auckland and around $700 million to metro rail improvements in Wellington. Another important transport infrastructure investment was launched as late as yesterday, with the HOP card, an integrated ticket launched with the Associate Minister for Infrastructure’s help by Auckland Transport and the New Zealand Transport Agency. Integrated ticketing is great for consumers and will enable users to have faster and more convenient access to all public transport services.
Vulnerable Citizens—Prime Minister’s Statements
4. Hon ANNETTE KING (Deputy Leader—Labour) to the Prime Minister: Does he stand by his statement “this Government is not prepared to turn its back on our most vulnerable citizens when they most need our help”?
Rt Hon JOHN KEY (Prime Minister): Yes, which is why in difficult economic times we have maintained and increased benefits, superannuation, and income support for families, and why we have continued to increase funding for important public services like health and education.
Hon Annette King: What is he prepared to do to assist New Zealanders who are most in need, in light of reports over the weekend that a boy a was found eating cockroaches because he was starving and that the budgeting services are receiving reports of pensioners eating cat food as the cost of living keeps going up at a rapid rate?
Rt Hon JOHN KEY: I have seen another report in relation to the boy involved, and I understand that the case could be an issue of neglect, not one of family income support. The Government obviously supports not only a benefit-based system for those who find themselves in need but also significant hardship grants. As we have seen in the case of Christchurch we have put a quarter of a billion dollars into funding support for Christchurch people in the first 14 weeks since the earthquake.
Hon Annette King: Is he aware that many low-income families cannot afford even a basic nutritious diet for their children, especially if there are teenagers in the household who need far more food, according to the latest vulnerability report from the Council of Christian Social Services; if so, what will he do to help those families who are struggling 5 months after the Government’s tax cuts took effect, which were supposed to make most people better off?
Rt Hon JOHN KEY: The price of food moves around quite a lot; it is highly volatile. So some things go up in price and some things go down in price. The Government has been putting more money into budgeting services to try to give people help and support. We also fund a significant number of emergency grants, as the member will be aware, on top of the basic benefit system.
Hon Annette King: If that answer from the Prime Minister is correct, can he then explain why the Salvation Army in Whangarei has seen an increase of 90 percent in food parcels since the New Year and is now having to ration them to one per family?
Rt Hon JOHN KEY: I have not seen the report, and I have not seen the details from Whangarei. But I will say that my experience in being involved in organisations that give food parcels shows that a lot of them do have a system where they do not allow people to have too many in a certain time—they do not want to build dependency.
Hon Annette King: What will he do to help the increasing number of people in need of help, as shown by the 37 percent increase in food bank clients at the Catholic Family Support Services of Hamilton, the Glen Eden food bank giving out 73 food parcels in 3 hours, and the demand for Salvation Army food parcels rising by 16 percent last year, indicating that there are a large number of vulnerable New Zealanders who are not reducing in terms of their need for help under this Government?
Rt Hon JOHN KEY: The Government can stand on a very proud record of keeping benefit entitlements and making sure that payments are made to all vulnerable New Zealanders, despite running a very, very large deficit as a result of very poor economic conditions. I think that if ever a Government could be excused for cutting costs, it would be this Government, because there is not a lot of money around.
Hon Annette King: From the poorest?
Rt Hon JOHN KEY: Well, right across the board. But this Government has actually maintained all that support.
Hon Annette King: Is he prepared to accompany me on one of my visits to a food bank, so he can listen to those people who work on the front line, and determine whether people are making poor lifestyle choices, as he has claimed?
Rt Hon JOHN KEY: I regularly go out and see social services. Despite what is a highly attractive offer from the deputy leader of the Labour Party, no, I do not want to hang around with her at any time, to be perfectly honest.
Mineral Resources—Government Plans for Development
5. Hon JOHN BOSCAWEN (Deputy Leader—ACT) to the Acting Minister of Energy and
Resources: Is it Government policy for New Zealand to become a “highly attractive global destination” for oil exploration, with expansion of the oil and coal sectors leading to a “step change” in the country’s economic growth as set out in the document Developing Our Energy Potential; if not, why not?
Hon Trevor Mallard: I raise a point of order, Mr Speaker. Before the Acting Minister answers the question, it is my understanding that there cannot be an Acting Minister if the actual Minister with the warranted responsibility is in the House at the time.
Mr SPEAKER: It may be that my information is not correct on this issue, but my understanding is that while Hekia Parata is the Acting Minister of Energy and Resources, the portfolio responsibilities have been handed over to her by the Government. Those responsibilities have been transferred, so she is the Minister for the time being, while she is Acting Minister. That is why I call the Hon Hekia Parata to answer the question.
Hon HEKIA PARATA (Acting Minister of Energy and Resources): Tēnā koe, Mr Speaker. Yes.
Hon John Boscawen: Is it Government policy to provide a step change in economic growth for the West Coast by supporting open-cast mining of Pike River if feasible, or does the Government not have a policy on the conditions under which the Pike River mine would be allowed to reopen?
Hon HEKIA PARATA: Our Government in the past 2 years has been pursuing a number of opportunities to create wealth in order to build a stronger economic foundation for our country. We are continuing to explore opportunities in oil, gas, and coal throughout New Zealand where extraction is feasible and within our legal framework.
Hon John Boscawen: I raise a point of order, Mr Speaker. I specifically referred to Pike River. My question was very specific.
Mr SPEAKER: I will let the member repeat his question.
Hon John Boscawen: Is it Government policy to provide a step change in economic growth for the West Coast by supporting open-cast mining of Pike River if feasible, or does the Government not have a policy on the conditions under which the Pike River mine would be allowed to reopen?
Hon HEKIA PARATA: Pike River Coal is in the hands of receivers. They are making decisions about its future at present.
Hon John Boscawen: Would the Government look favourably on a proposal to extract over $10 billion worth of coal through a combination of open-cast mining and the tunnelling of the Pike River mine, if such a proposal were put forward?
Hon HEKIA PARATA: Pike River Coal is in the hands of receivers. We have no such proposals before us.
Charles Chauvel: Can the Acting Minister confirm that the decision to grant an exploration permit to Petrobras for the Raukūmara basin included no environmental considerations, just like the seven other major offshore exploration permits handed out by her Government since last year’s Gulf of Mexico oil spill?
Hon HEKIA PARATA: No.
Earthquake, Christchurch—Extension of Business Assistance Package
6. Hon CLAYTON COSGROVE (Labour—Waimakariri) to the Minister for Social
Development and Employment: Is the Government considering extending the business assistance
package for employers and employees beyond the 14-week period currently signalled; if not, why not?
Hon PAULA BENNETT (Minister for Social Development and Employment): The situation is changing all the time, but on balance we think we have got it about right at more than 3 months’ extra financial assistance. We have taken the advice of organisations such as the Canterbury Employers’ Chamber of Commerce and the Canterbury Development Corporation. We do not intend to extend the business assistance package at this time, but we are constantly looking at it.
Hon Clayton Cosgrove: Will the current business assistance package be terminated after the extra 6-week period ends, given the Prime Minister’s statement that “I think everyone acknowledges we can’t go on forever”?
Hon PAULA BENNETT: The intention at the moment is for it to run for another 8 weeks. We have 2 more weeks, going to 18 April, and then the employment support package will be based on quite different criteria. It will not include sole traders, and there will be more business mentors, who are going in at the moment and talking to those businesses to assess their eligibility. There is no intention to extend it at the moment, but, as I say, the situation is constantly changing.
Hon Clayton Cosgrove: Does she believe that 14 weeks after the initial quake employers and employees will be in a strong enough position to proceed without assistance, given that 6 weeks have passed since 22 February and very little has changed except for the fact that thousands more people are now out of work and hundreds of businesses are still struggling desperately?
Hon PAULA BENNETT: We have taken a lot of advice from businesses on the ground: the Canterbury Employers’ Chamber of Commerce and others. They have said to us that some businesses have obviously already relocated, and others intend to do so. After 14 weeks one has to acknowledge that some of those businesses will not survive. We have seen that in recent weeks, and we will see more of it coming up. It is a matter of how long we support them to relocate, and allowing some others to close, because it is, unfortunately, inevitable.
Katrina Shanks: Has the Minister received any reports about the number of businesses and people still needing the earthquake support package?
Hon PAULA BENNETT: We are seeing quite a lot of changes. I can report that of the 7,381 individuals who were on the job loss cover, nearly half of them—3,500—have told us that they do not need it any more. They went on it in those early weeks, and they have now come off it, presumably because they have all found work and no longer need that job loss cover. We have also seen that one-third of sole traders have opted in, but two-thirds have not; we are also seeing that for the employment support subsidy. As I say, it is changing every day. It is a matter of making the system flexible enough to acknowledge that change and to offer the support in the right place.
Hon Clayton Cosgrove: Given her last answer, has any Government agency provided her with advice as to how many Cantabrians will end up on the unemployment benefit once the current support package ends; if so, what is that advice and what are the numbers?
Hon PAULA BENNETT: I have heard various numbers in the last few days, but, to be frank, they have all come from the Opposition. It feels like that member is plucking numbers out of thin hair, quite frankly—sorry, I meant to say plucking numbers out of thin air. Members need to be pretty careful where they are getting those figures from. I think they are actually not true.
Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. With respect, the question was specific. It asked the Minister whether any Government agency had provided her with any advice, etc. She went on to reference other reports she had received from me and others. I am not a Government agency, and I asked her specifically whether she had received any advice—
Mr SPEAKER: I am not sure that is what the member asked. I may have to apologise if I am wrong, but I do not recollect the member asking particularly about Government agencies. I thought he asked about advice. The dilemma I have is that I cannot be sure that the question asked will be exactly the same. [Interruption] I am on my feet. The issue is being disputed, so to me it is reasonable to allow the member to repeat his question, but I will be checking the Hansard to make
sure that the member is correct on that matter—that he did ask about Government agency advice. I invite him to repeat his question.
Hon Clayton Cosgrove: I will repeat the question absolutely. Has any Government agency provided her with advice as to how many Cantabrians will end up on the unemployment benefit once the current support package ends; if so, what is that advice and what are the numbers?
Hon PAULA BENNETT: No, I have not had advice on how many will end up on the unemployment benefit. We have certainly had advice on how many employers may not be able to relocate, and we are certainly seeking advice on where we are moving skills training. But it is not a matter of concentrating on how many are going on the unemployment benefit; it is about supporting those businesses and those employees—those people who most need it.
Hon Clayton Cosgrove: Can she tell the House why she has not proactively sought advice from her Government agency or any other as to how many people will end up on the unemployment benefit once the business support package ends, given that she is the Minister for Social Development and Employment, and given that the impact of the termination will create a major problem for earthquake victims and business owners desperately trying to survive? Why has she not even asked her agency to do some projections—or do her job?
Hon PAULA BENNETT: Our concentration has very much been on supporting the businesses and employees that need us most. The member may not understand the social security system. That support is there for however many need it, whether that figure is 1,000 or a few thousand. The reality is—[Interruption]
Hon Clayton Cosgrove: Why don’t you ask your department?
Hon PAULA BENNETT: If that member stopped picking numbers out of thin air and actually looked at what needed to be done, which is supporting the employees who need us most, he would see that the system is there for those who need it, however many do.
7. JACQUI DEAN (National—Waitaki) to the Minister of Police: What reports has she received on the latest trends in the level of crime in New Zealand?
Hon JUDITH COLLINS (Minister of Police): I am very pleased to report that total recorded crime per head of population dropped by 6.7 percent in 2010. This result is a tribute to the dedication and tenacity of our law enforcement officers. The police have put more officers on patrol on the front line and are working closely with communities and other agencies to prevent crime happening in the first place. The Department of Corrections is also playing an important role by keeping the most dangerous people in our society securely locked away. At the same time it is focusing its efforts on rehabilitation in order to help offenders to stay out of trouble when they are released. I commend our law enforcement officers for these results and for the important work that they are doing to keep our communities safe.
Jacqui Dean: What other factors have influenced the drop in recorded crime?
Hon JUDITH COLLINS: One of the key factors is that this Government is determined to reduce the number of people who become the victims of crime. We have put extra police officers on the front line, passed new legislation to strengthen their ability to fight crime, and given them new tools such as Tasers and digital radios. We have also increased our focus on reducing the number of people who reoffend. There are now more prisoners than ever before undertaking drug treatment, work training, and education. However, these results do not signal that we will be relaxing our efforts to fight crime. Although the drop is consistent with a long-term trend, we will continue to back our law enforcement agencies, to keep up their great work.
South Canterbury Finance—Prime Minister’s Statements
8. Hon TREVOR MALLARD (Labour—Hutt South) to the Prime Minister: Did he tell a meeting in Timaru last week “The entire time I’ve been Prime Minister I’ve had Treasury in my
office week after week, month after month, telling me South Canterbury Finance was going bankrupt”?
Rt Hon JOHN KEY (Prime Minister): I do not have the transcript with me and I cannot recall exactly what I said, but I certainly received regular updates from Treasury on South Canterbury Finance. The Government was aware of the company’s financial difficulties, but our advice was that there was a chance, however slim it might have been, that South Canterbury Finance could trade its way out of its difficulties. In fact, that did not happen. South Canterbury Finance was placed in receivership in August 2010, and payments were made to deposit holders under the terms of the 2008 Crown Retail Deposit Guarantee Scheme devised and implemented by the then Labour Government.
Hon Trevor Mallard: If Treasury advice was that there was a chance that the firm was going bankrupt, why did he tell people in Timaru that Treasury told him it was going bankrupt?
Rt Hon JOHN KEY: The point was that unless the firm could find a buyer and therefore a capital injection, it was highly likely that it would go bankrupt. In fact, it could not find a buyer and it did go bankrupt.
Hon Trevor Mallard: How much would the Crown have saved if the Government had taken the initial Treasury advice and not allowed South Canterbury Finance into the guarantee scheme because, as Treasury advised him, it was never compliant with the scheme?
Rt Hon JOHN KEY: My understanding is that that was arranged by the previous Labour Government, and as per the ministerial statement to Parliament, South Canterbury Finance was admitted to the scheme on 19 November 2008, which happened to be the day that this Government was sworn in.
Hon Trevor Mallard: Was the signature that brought South Canterbury Finance into the scheme that of John Whitehead, on behalf of Bill English?
Rt Hon JOHN KEY: It was most probably on advice given to the then Labour Government on the scheme it devised at the time. But I think it is worth remembering why Michael Cullen wanted South Canterbury Finance to go into the scheme.
Hon Trevor Mallard: No.
Rt Hon JOHN KEY: Yes, Michael Cullen did. The reason was quite simple: if South Canterbury Finance, along with other finance companies, had not gone into the scheme, as the member would know as a former associate finance spokesperson, those companies would have gone bankrupt. The level playing field was changed at the point that the then Labour Government, by the way at the Labour Party conference at the start of Labour’s election campaign, announced the scheme.
Jo Goodhew: With hindsight, is there anything that this Government could have done differently in order to lower the cost to taxpayers?
Rt Hon JOHN KEY: No. Once the Crown guarantee was made available to finance companies by the previous Government and South Canterbury Finance was admitted to the scheme in 2008, the die was effectively cast. It became evident over time that the company had made bad loans, and under the terms of the scheme taxpayers were legally obliged to make good any losses to deposit holders. No amount of wishful thinking and none of the arrangements suggested by the previous prospective buyers can alter that fact. It is sad that the Labour Government did not work that out when it announced the scheme at the Labour Party conference.
Hon Trevor Mallard: Subsequent to the initial bringing into the scheme of South Canterbury Finance under the signature of Mr English, were there two further opportunities to take it out that the National Government decided not to take up, which therefore cost the Crown over an extra billion dollars?
Rt Hon JOHN KEY: No. Firstly, as the Minister of Finance said in his ministerial statement to Parliament on South Canterbury Finance, despite the deteriorating position South Canterbury Finance remained in compliance with the deed of guarantee, and as such there was no ability or
cause for the Crown to withdraw its guarantee. Secondly, South Canterbury Finance failed under your scheme, not the—
Mr SPEAKER: The Speaker does not have any scheme.
Hon Rodney Hide: Has the Prime Minister seen Phil Goff’s call, in the wake of the South Canterbury Finance collapse, for the entire Government to resign, and what is his response to Phil Goff’s secret election strategy?
Rt Hon JOHN KEY: Tempting, is what I think of his offer. Clearly, there is a game of oneupmanship going on over there, as those members sort out who will be the real leader.
Resource Management Act Reforms—National Consenting Policy
9. CHRIS AUCHINVOLE (National—West Coast - Tasman) to the Minister for the
Environment: What advice has he received on major resource consents being considered under the Government’s new national consenting policy?
Hon Dr NICK SMITH (Minister for the Environment): I am advised that $5 billion worth of major infrastructure projects are being progressed under the new national consenting policy introduced by the Government in the 2009 reforms of the Resource Management Act. These projects include new renewable power stations, airport expansions, motorways, prisons, and transmission projects. A key advantage of this new process is a single, robust submission hearing process, taking 9 months rather than a drawn-out process of multiple submission stages and appeals taking many years. The first project lodged under the new policy was the $1 billion Contact Energy Tauhara stage two geothermal station. This was processed under the 9-month timetable, enabling all parties to get a fair hearing, and this has resulted in robust consent conditions that protect the environment.
Chris Auchinvole: What benefits are there for ordinary New Zealanders from these more efficient resource consenting processes for major infrastructure?
Hon Dr NICK SMITH: Power prices relate directly to supply and demand. The problem historically is that taking many, many years to get resource consents has constrained power supply and contributed to the very steep rise in electricity prices over the past decade. The more efficient consent processing also helps security of supply, in that delays in getting new power stations built and new transmission lines in place only increases the risks of blackouts and brownouts, as we experienced over the last decade. It is also in the interests of New Zealanders that we are able to—
Hon David Parker: There hasn’t been a brownout in New Zealand since the 1950s.
Hon Dr NICK SMITH: The member who was previously the Minister of Energy obviously did not recognise the problem in Auckland, where there were major power failures, and the two periods when he had to plead with the public of New Zealand to save power because not enough power stations were built and when record amounts of coal were burnt to keep the lights on. The member opposite is embarrassed that this Government’s reforms are working so effectively in getting new power stations consented.
Charles Chauvel: What monitoring is the Minister undertaking of the costs to parties involved in his new national consenting policy in light of reports of legal and consulting bills in the millions of dollars being incurred by those parties, thanks in part to the tight 9-month timetable imposed and also to unclear policies and processes at his new Environmental Protection Authority?
Hon Dr NICK SMITH: The feedback I have had from major investors like Contact Energy is that they would much prefer the certainty of the constrained timetable and the one-step process rather than the ridiculous examples we have, such as the West Wind wind farm project here in Wellington, which took over 3 years for consent. The uniform opinion, both from objectors as well as applicants, is that they prefer the national consenting process, which is robust but is set to a timetable and is producing consents like the billion-dollar Tauhara project at reasonable cost.
Charles Chauvel: I raise a point of order, Mr Speaker. My question was directed toward asking the Minister what monitoring he was undertaking of the costs to parties involved in the new consent process, not about what he thought or what he has heard anecdotally of the preferences of—
Mr SPEAKER: If the member had asked only that, he could have expected a more precise answer, but I recollect that the question went on to become a much longer question that included more than just that in it. I believe that the Minister was responding to some of the rest of that question. If I have that wrong, I am prepared to accept I have it wrong, but I believe that the member did include more than just that in his question.
Energy Strategy—Warm Up New Zealand: Heat Smart
10. Dr RUSSEL NORMAN (Co-Leader—Green) to the Acting Minister of Energy and
Resources: Does she agree that the joint scheme initiated by the Green Party and the Government, Warm Up New Zealand: Heat Smart, is the best initiative in the Draft New Zealand Energy Strategy because it is providing hundreds of thousands of New Zealand households with warm, dry, energyefficient homes, and creating thousands of clean, green jobs?
Hon HEKIA PARATA (Acting Minister of Energy and Resources): Tēnā koe, Mr Speaker. The Government agrees that Warm Up New Zealand: Heat Smart programme has been effective in improving insulation and heating in thousands of New Zealand homes. To date over 91,500 homes have been retrofitted.
Dr Russel Norman: Will the final version of the New Zealand Energy Strategy change from the version mistakenly released last week and have a greater focus on smart, green energy solutions like the Warm Up New Zealand scheme, instead of prioritising the development of fossil fuels?
Hon HEKIA PARATA: The Government is yet to finalise its energy strategy.
Dr Russel Norman: Is she aware that if New Zealand goes ahead and digs up its lignite coal, as proposed in the draft strategy, it will result in the release of greenhouse emissions equivalent to 150 times our current annual emissions, and how is that compatible with the “50 by 50” target for reducing emissions?
Hon HEKIA PARATA: The Government has not yet finalised its energy strategy.
Dr Russel Norman: Does she agree that when the Government does finalise its energy strategy, it would be best if the Government were to embrace a clean, green energy strategy rather than that proposed in the draft strategy, which is to embrace fossil fuels?
Hon HEKIA PARATA: The Government has not yet finalised its energy strategy, and those issues are being taken into account.
Fishing Industry—New Zealand Companies’ Use of Foreign Boats
11. Hon SHANE JONES (Labour) to the Minister of Fisheries and Aquaculture: Does he still have no major concerns about the way foreign boats were used by New Zealand companies as the Nelson Mail reports he said last year?
Hon PHIL HEATLEY (Minister of Fisheries and Aquaculture): As Minister of Fisheries and Aquaculture I have concerns if any vessel, foreign or otherwise, misreports its catch, is not registered, breaches environmental standards, refuses to comply with requirements for observer coverage, or breaches any other obligations under the Fisheries Act.
Hon Shane Jones: Does he believe that foreign crews receiving wages reportedly as low as $238 per month is a major concern; if not, why not?
Hon PHIL HEATLEY: That is a matter for the Minister of Labour, but I am happy to comment. In the dying days of the previous Government, Labour reset the rules on foreign fishing crews’ wages and working conditions, and it seemed to be happy back then. I would be interested if the member could forward information to this Government if things have changed.
Hon Shane Jones: What specific improvements will he be advocating to ensure that foreign crews are adequately recompensed, or does he not care that this activity is besmirching the reputation of a major New Zealand industry?
Hon PHIL HEATLEY: As I said, that is a matter for the Minister of Labour, but it would be fair to say that the previous Government, in its last dying days, looked at fisheries regulations, vessel safety, crew welfare, and work visas. Labour came up with some changes at that time; I do not why it did not use that chance only 3 years ago, if it was so serious about this issue.
Hon Damien O’Connor: How do allegations of slavery in New Zealand’s so-called sustainable fishing industry improve New Zealand’s image in our main export markets?
Hon PHIL HEATLEY: I raise a point of order, Mr Speaker. We have some vaguely intelligent people on the other side of the House who have already—
Mr SPEAKER: The member cannot use a point of order to make a negative comment about any other member of this House. I will allow him to make his point of order in appropriate terms.
Hon PHIL HEATLEY: I have already answered two questions that were out of order because I am not the Minister of Labour. I pointed that out, but I gave the member the benefit of the doubt and answered the questions. I really think a third case where I am asked to address a question that should be asked of another Minister is entirely out of order.
Hon Damien O’Connor: My question was quite specific. I asked what the accusations of slavery in the so-called sustainable fishing industry did to our image offshore. That is a simple question for the Minister of Fisheries and Aquaculture.
Mr SPEAKER: I think I have heard sufficient on the matter. We will not take further time on it. I think the Minister is correct in saying that I could, in fact, have ruled out the questions as being more appropriately directed to the Minister of Labour, but I did not want to deprive the Minister of a bit of licence to have greater freedom in answering a question. I did not want to be a spoilsport. When members ask questions that are more appropriately another Minister’s responsibility, they risk receiving answers that they will not like. Today I have been pretty supportive of members when they have complained about answers given, but when members ask questions that are perhaps more appropriately directed elsewhere, they risk receiving answers they will not like. I think the Hon Damien O’Connor should have the right to ask his question. It relates to the fishing industry, but how tightly directed it is to the Minister of Fisheries and Aquaculture will determine how precisely the Minister has to answer it.
Hon Damien O’Connor: How do allegations of slavery in the so-called sustainable New Zealand fisheries affect our image in our international export markets for fish?
Hon PHIL HEATLEY: I can say that if it relates to a misreporting of catch, the question should be addressed to me. If vessels are not registered, it should be directed to me. If environmental standards are breached, it should be directed to me. In terms of observer coverage, please put the question to me. If it is a matter of slavery in New Zealand or in New Zealand waters, the member should please put the question to the Minister of Labour.
Hon Damien O’Connor: I raise a point of order, Mr Speaker. I was on the select committee that amended the Fisheries Act to include legal obligations to pay New Zealand rates of pay.
Mr SPEAKER: The member will resume his seat. The member asked his question and the Minister answered it. There was a definite answer to the question, and the member cannot litigate the answer by way of a point of order. He can litigate it by way of further supplementary questions; he is perfectly entitled to do that. If he does not like the answer and feels strongly enough about it he can put a question on tomorrow’s Order Paper, but he cannot litigate the question by way of a point of order.
Darien Fenton: Will his Government support an inquiry into the New Zealand fishing industry’s relationship with foreign fishing companies, foreign crewing of joint ventures, and chartered New Zealand fishing vessels, and its effect on sustainable fishing employment and the relevant
communities within New Zealand, as set out in the petition of Neville Donaldson, which was presented to the House on 14 February, and which is before the Primary Production Committee?
Hon PHIL HEATLEY: The petition went before the Parliament. Now that it is before the Primary Production Committee it is a matter for the select committee and Parliament.
Hon Shane Jones: Given the Minister’s answer about having no major concerns, can he confirm to the House whether he has received word of major concerns from the fishing industry via Peter Talley, and did he answer those in such a glib fashion on that occasion?
Hon PHIL HEATLEY: I have had correspondence on this matter from a range of people over an extended period, not least of all when the previous Government was in power and made some changes.
Rahui Katene: Has this Government conducted an inquiry into the fishing industry’s relationship with foreign fishing companies, foreign crewing of joint ventures, chartered and New Zealand fishing vessels, and its effect on sustainable fishing practices, employment, and the relevant communities within Aotearoa; if not, why not?
Hon PHIL HEATLEY: No; under the previous Government, in its last days, Ministers did some work with various departments, including the Department of Labour, Maritime New Zealand, the Ministry of Fisheries, and the Department of Immigration. They looked at those matters, they made some changes, and they felt the changes they made were entirely adequate. They may have changed their minds now. The matter is now before the Primary Production Committee and I am interested in seeing the results of that inquiry.
Housing Innovation Fund—New Projects
12. TIM MACINDOE (National—Hamilton West) to the Minister of Housing: What recent announcements has he made regarding the Government’s Housing Innovation Fund?
Hon PHIL HEATLEY (Minister of Housing): Recently I announced five projects that will see $3.4 million be used from the fund for the 2010-11 year. Those projects will help to provide 21 new properties in South Auckland, Tauranga, Nelson, and Tāmaki for New Zealanders on low to moderate incomes, or with special housing needs. Another project will benefit Māori directly, with 5 new affordable rental properties being built on the Chatham Islands through Māori Demonstration Partnerships.
Tim Macindoe: What is the aim of the Housing Innovation Fund?
Hon PHIL HEATLEY: The fund encourages partnerships with community housing organisations. It is about making the taxpayer dollar go further and building roofs for families that are struggling. It is part of the Government’s commitment to increase the quantum of social housing. I am currently looking at ways that we can change the Housing Innovation Fund to make it even more attractive to third sector participants.
Moana Mackey: Is the reason he has done nothing substantial in 2½ years to address the everworsening housing shortage in New Zealand apart from taking credit for good Labour Government initiatives such as the Housing Innovation Fund that, like the Prime Minister, he does not believe that New Zealand is actually facing a housing shortage?
Hon PHIL HEATLEY: It is fair to say the general public know we have streamlined the Resource Management Act to make resource consenting easier, and streamlined the Building Act to make building consenting easier. We have made it very, very clear that the most important thing to New Zealanders, when it comes to housing affordability, is actually mortgage interest rates, which have remained flat to low under this Government. They have not soared to 9, 10, or 11 percent, which is what they were under the Labour Government.