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Questions And Answers June 15


WEDNESDAY, 15 JUNE 2011

QUESTIONS FOR ORAL ANSWER

QUESTIONS TO MINISTERS

Early Childhood Education—Minister’s Statement

1. HILARY CALVERT (ACT) to the Minister of Education: Does she stand by her statement that “early childhood education is a good investment for our young New Zealanders”; if so, why?

Hon ANNE TOLLEY (Minister of Education): Yes, I do stand by that statement; because it is correct. Secondly, I think both the report that was produced recently by the Prime Minister’s Chief Science Advisor, Sir Peter Gluckman, and the report of the Taskforce on Early Childhood Education that was released last week show that all the evidence is that good-quality early childhood education benefits children right through their lives.

Hilary Calvert: What is her best estimate of likely increases in participation rates resulting from extra spending of $550 million in early childhood education?

Hon ANNE TOLLEY: The Ministry of Education’s estimate for children taking part in early childhood education in 2012, as against 2011, is an additional 8,200 full-time equivalent children. That is made up of hours and days. It is quite complex, but we estimate it is about 8,200.

John Boscawen: I raise a point of order, Mr Speaker. The question was quite specific. My colleague asked the Minister what the participation rate was—in other words, the percentage of people participating. She did not her ask her about the absolute numbers. The Minister quoted an increase of 8,200 full-time equivalents, but the question was about the participation rate.

Hon Simon Power: Given the primary question’s width as it was set down, I think the Minister, in having the quantitative numbers at her fingertips, did extremely well to be able to answer the supplementary question, when it followed such a broad primary question.

Hon Trevor Mallard: If the member wanted to know the percentage participation changes, she should have asked about that.

Mr SPEAKER: I think both members have made perfectly fair points. I believe that given the primary question, the Minister’s answer was reasonable when asked about the increase.

Hilary Calvert: Why does the Government call this spending “a good investment”, when the previous increase in spending from $428 million to $1.17 billion between 2004 and 2009 saw participation rates increase by less than 1 percent?

Hon ANNE TOLLEY: Yes, that is exactly what happened under the previous Government. It trebled the funding, and the number of children turning up at preschool increased by less than 1 percent. We have tried over the last couple of Budgets to actually put into the early childhood sector some more targeted funding, to lift the participation of those groups that were missing out. But we have not been satisfied with that, and that is why I appointed the Taskforce on Early Childhood Education, which reported last week and has made suggestions about substantial changes to the funding system that would allow much better targeting of that funding.

Louise Upston: How much did this Government invest in early childhood education in Budget 2011?

Hon ANNE TOLLEY: This Government is investing another $555 million over the next 4 years. This year’s increase represents 11.5 percent more than was funded in early childhood education last year. I think that is an enormous contribution, and it shows this Government’s determination to make sure all New Zealand kids get a good start.

Hilary Calvert: Why does the Government call this spending a good investment, when the previous increase in spending, from $428 million to $1.17 billion, resulted in enrolment rates among Māori children actually falling?

Hon ANNE TOLLEY: As I said to the member before, we agree that the enormous increase in the funding of early childhood education did not result in many of the target groups that we know will benefit the most from good early childhood services actually being able to participate. That is why we appointed the task force, and that is why we are seriously looking at the recommendations of that task force. We have made some changes in the last two Budgets to enable us to better target those hard-to-reach communities.

Hilary Calvert: I seek leave to table a table from Stalled, which is a state of the nation report from the Salvation Army, showing Māori participation rates in early childhood education.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection. [Interruption] I beg your pardon; there is objection. I apologise. There is objection.

Sue Moroney: Will she commit to continuing to fund 20 hours’ early childhood education, including all existing subsidies and fee controls, as she did prior to the last election, or will it be gone before mat time under a future National-ACT Government?

Hon ANNE TOLLEY: This Government, in fact, has increased the 20 hours.

Hon Trevor Mallard: How can you increase 20 hours?

Hon ANNE TOLLEY: Because we made it available to parent-led services like kōhanga and playcentre, which the previous Government refused to include in the 20 hours’ policy. We have no plans to make changes to the 20 hours’ policy at this stage. However, our election policy will be announced as part of the election campaign.

Sue Moroney: What proportion of GDP is spent on early childhood education as a result of Budget 2011, and how does that proportion compare with the 1 percent of GDP that Unicef recommends be spent on early childhood education?

Hon ANNE TOLLEY: I understand that New Zealand spends about 0.78 percent of Government spending on early childhood education, which is comparable to the OECD average of 0.7 percent. The 1 percent recommendation was set by Unicef in 2008, and it is a pretty arbitrary sort of benchmark. However, the interesting thing is that to reach 1 percent would actually cost another half a billion dollars. I do not know about that member, but this Government does not have money trees sitting in its garden. I ask that member, if that is her party’s policy, to take it to the election.

GST Increase—Effect on New Zealanders

2. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that “the vast majority of New Zealanders are now better off, even after the GST increase”; if so, which New Zealanders are worse off?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Prime Minister: Yes, the Prime Minister stands by his full quote, made in October last year, which is “Most of you will have noticed a boost in your pay packets since the 1 October tax cuts. The vast majority of New Zealanders are now better off, even after the GST increase.” That was of course referring to the income tax / GST switch that happened on 1 October 2010. To answer the second part of the member’s question: there were some people not fully compensated by the tax changes. Those were

people who were sheltering income in trusts, or otherwise earning income that was not fully taxed at the personal tax rates.

Hon Phil Goff: Is the Prime Minister saying that taking into account inflation and the level of tax cuts given to people on the medium or lower income, those people are now better off than they were before—taking account of both GST and inflation?

Hon BILL ENGLISH: Yes. The after-tax average wage has increased 7.1 percent over the previous year—considerably more than the increase in prices over that time. In fact, the real increase in the after-tax average wage over the last year has been 2.5 percent.

Hon Phil Goff: When he claims that the average wage has increased by 2.5 percent over the last year, what account does he take of the fact that for his income he would have got $1,000 a week extra in tax cuts, and the top 10 percent of wage earners got 40 percent of the tax cuts, thus distorting the real income earned by people across the board, and that lower-paid people, people on a median income or less, are actually worse off?

Hon BILL ENGLISH: The measure I am using is the one that has been used by this Parliament, in legislation, for 20 years to calculate the basis of New Zealand Superannuation. If Labour members think that is wrong, then they should campaign among New Zealand’s pensioners to change the way that New Zealand Superannuation is adjusted. The fact is that there has been a real increase of 2.5 percent in the average, ordinary-time, after-tax, weekly wage in the last 12 months.

Hon Phil Goff: Is he telling New Zealanders on the medium wage, or less than the medium wage, that they are wrong in believing that the cost of their food, their power, their rents, and their petrol have soared above any of the wage increases they have got, and that he actually knows better than them?

Hon BILL ENGLISH: I was just telling Parliament the facts about the averages. Of course, in individual circumstances many New Zealanders over the last 2 or 3 years have not had significant wage increases, or have had no significant wage increases at all. They are victims of the mismanagement of this economy by the previous Labour Government, when people thought they had sustainable jobs, but the jobs were actually based on borrowed money and excessive Government spending. We are working very hard to replace those unsustainable jobs and times of no wage increases, with the benefits of a strong, growing economy, and we are making some progress.

Rahui Katene: Is he aware that over the last month the price of fruit and vegetables has risen another 1.6 percent, and does he agree that to add $6 million to the $300 million - plus that the Government is already borrowing per week, in order to take GST off healthy food, would leave every New Zealander better off; if not, why?

Hon BILL ENGLISH: Although it is true that food prices do rise in some months, they also fall in others. For instance, over the last 6 or 7 months the price of fruit and vegetables has actually fallen in total. That is good for household budgets; I am not sure New Zealanders are any healthier as a result. The second thing is that every dollar we add to our already fast-rising debt will need to be repaid with interest.

Hon Phil Goff: Did the cut in taxes for a person on the medium wage, which was about $14 a week, adequately cover the cost of filling up their car with petrol, cover the average rental increase of $23 a week in Auckland, and cover the increase in food prices, which went up by 7.4 percent averaged over the year, just to name a few of the costs those families are facing?

Hon BILL ENGLISH: No family will be on $14 an hour, and the member should look at the family support system—

Hon Phil Goff: $14 a week.

Hon BILL ENGLISH: It is $14 a week. The fact is that New Zealand families who are on low incomes benefit from Working for Families, from the accommodation supplement where that is required, and from subsidies on early childhood education. The Government has increased all of

those subsidies for those families despite the fact that we have had the biggest recession in a generation.

Hon Phil Goff: Was Statistics New Zealand right in stating that median incomes actually fell in the year to June last year although the December quarter price rise was the highest in 20 years?

Hon BILL ENGLISH: The member is always going to be able to find a measure of income and a measure of expenditure some time in the last 3 years that do not match up. The fact is that, firstly, on average real after-tax wages have increased and, secondly, the median income measure used by Statistics New Zealand is not the one we use to set New Zealand Superannuation. If Labour members want to change that, they should say so. Thirdly, that measure does not take account of all the Government transfers, which have all increased because we have protected the most vulnerable through the worst recession in a generation.

Hon Phil Goff: What does the Prime Minister say to members of the Ōtāngarei branch of the Māori Women’s Welfare League who told Kelvin Davis recently that they are having an unprecedented demand for assistance, particularly food parcels, because unemployment has doubled among Māori to 19.5 percent and because costs have soared above the incomes that Māori people are earning in the north?

Hon BILL ENGLISH: We are fully aware of the impact of significant unemployment both among young people and among Māori. That is why it is so important we get this economy growing again. New Zealand is not going to create new jobs out of new Government schemes. It is going to create new jobs out of a fast-growing economy. The Prime Minister would be interested to know what Kelvin Davis said to that branch of the Māori Women’s Welfare League. No doubt, it was a large number of expensive, uncosted promises that he does not want broadcast to the rest of the country.

Hon Trevor Mallard: Does he understand today that real average wages go up when highincome earners get massive tax cuts, including over $1,000 a week in his case, and low-income workers lose their jobs?

Hon BILL ENGLISH: The Prime Minister understands that Labour has always agreed, as we have, to use the ordinary-time average weekly wage as the basis for calculating New Zealand Superannuation. If Labour wants to change that, it is welcome to go and campaign. Of course, there are a lot of statistical effects on where the average wage comes out, but over time, Parliament has regarded it as the fairest measure of the overall wage picture for New Zealanders. That is why it is in the law, where it has been for the last 25 years as the way of calculating New Zealand Superannuation.

Hon Trevor Mallard: Does the Prime Minister understand that real average wages go up when high-income earners like him get tax cuts of over $1,000 a week, and low-income workers lose their jobs?

Hon BILL ENGLISH: The member is wrong.

State-owned Energy Companies, Sales—Mixed-ownership Model

3. MICHAEL WOODHOUSE (National) to the Minister of Finance: What economic benefits does the Government expect from extending the mixed-ownership model to four State-owned energy companies?

Hon BILL ENGLISH (Minister of Finance): We expect a wide range of benefits will flow from this model. First, it will deepen the local capital markets and give mum and dad investors, KiwiSaver funds, ACC, and the New Zealand Superannuation Fund better investment opportunities in New Zealand, particularly when those fund managers are investing a lot of their capital offshore. Secondly, it will give companies in New Zealand access to the capital to expand from wider sources than simply the Crown. It will place better commercial disciplines on the State-owned enterprises, it will lower Crown debt, and, finally, it will allow taxpayers’ capital to be recycled into higherpriority areas such as investment in infrastructure and the roll-out of ultra-fast broadband.

Michael Woodhouse: What dividends has the Crown received from the State-owned enterprises it is considering for mixed ownership?

Hon BILL ENGLISH: As I pointed out, the reason the Government is proposing a mixedownership model is for its wider benefits to the economy, not just because of the dividends of Stateowned enterprises. However, over the past 5 years ordinary dividends from the energy State-owned enterprises have ranged between $135 million and $432 million a year. They have averaged $312 million a year. This represents an average dividend yield of 2.1 percent on current commercial valuations. The Crown has, in addition, received capital back through special dividends on three occasions.

Michael Woodhouse: What impact will the mixed-ownership model have on future Crown cash flows?

Hon BILL ENGLISH: It will mean the Crown will reduce its finance costs and forgo some dividends, because, of course, as an ongoing owner of at least 51 percent of these companies it will continue to receive dividends. The Budget included Treasury’s projections, showing that in the 3 years to June 2014 the four State-owned enterprises concerned are projected to pay dividends averaging $380 million a year, a significant increase on the last 5 years, because the Government is focused on better performance of these companies. However, Treasury’s assumption about finance costs shows that the holding costs of these assets are around $800 million a year—that is, the interest costs are more than twice the expected future dividends.

Hon David Cunliffe: Does the return on State-owned enterprises that he has discussed include special capital distributions worth more than a billion dollars, which take the total shareholder return on those assets to over 16 percent, and is that why Treasury has advised that to realise the economic benefits of privatisation a significant proportion of ownership by foreign investors would be essential to achieve the Government’s objectives?

Hon BILL ENGLISH: It is a bit odd that Labour is campaigning against—

Mr SPEAKER: No, the answer should not start with what Labour may or may not be doing. A question was asked and, whether or not the Minister likes it, it was more or less within the Standing Orders. There was a fact inserted that the Minister can dispute, but he should not start his answer by talking about what the Opposition or the Labour Party might be doing.

Hon BILL ENGLISH: Yes, there were capital dividends, and guess what they came from? They came from the State-owned enterprises selling assets to foreigners. That is where the billion dollars came from—the foreigners who bought the assets off the Government State-owned enterprises.

Hon David Cunliffe: Would an example of those transactions be the purchase by Meridian Energy of Southern Hydro in Australia, the building up of that asset, and the selling again of that asset, at nearly a billion dollars profit, which profit was returned to the New Zealand taxpayer?

Hon BILL ENGLISH: Yes, I can confirm exactly that. Meridian Energy invested in some energy assets in Australia, built those up, sold them to foreigners for hundreds of millions of dollars, pocketed the cash from the foreigners, and brought it back to New Zealand. That is exactly what happened. We, however, are proposing to sell to New Zealanders and put the cash back into New Zealand.

Michael Woodhouse: What other ownership models for these types of assets is he aware of?

Hon BILL ENGLISH: One of the sensible things the previous Labour Government did—one of about two, I think—was to set up Air New Zealand, when it purchased it, under the mixedownership model. The Government retained, I think, about 75 percent ownership, and 25 percent of it was listed on the New Zealand Exchange, which is owned by Kiwi mums and dads, KiwiSaver, ACC, and probably some foreign owners, but there are no restrictions on that, apparently—no restrictions on that. I have also seen this model being touted by the Chinese Government, which is apparently a communist Government. It is putting many of its State-owned enterprises into the

mixed-ownership model in just the same way as Labour put Air New Zealand into the mixedownership model.

Hon David Cunliffe: Can the Minister distinguish between buying back an airline that has been bankrupted by its private sector board and management; purchasing and developing an offshore asset, which never originated in New Zealand, and selling it, which he opposed; and selling down New Zealand assets already owned by Kiwi mums and dads, when he has said he wants New Zealanders to be at the front of the queue but has no way to prevent them from onselling those assets to foreign multinationals?

Hon BILL ENGLISH: I did not actually understand the question, because I think Labour members now find themselves trying to make distinctions they did not think they would have to make, such as how to distinguish between selling large-scale Meridian Energy assets to foreigners and pocketing the cash, which was Labour policy, and New Zealand selling some of Meridian Energy to New Zealanders and pocketing the cash. That is a pretty interesting distinction.

Hon Trevor Mallard: Has the Minister of Finance read the reports of the comments of the then Leader of the Opposition when he opposed the purchase and development of Southern Hydro, which resulted in a $600 million profit for the New Zealand taxpayer?

Mr SPEAKER: The Hon Bill English—in so far as he his responsible for any of that.

Hon BILL ENGLISH: No, I do not recall that, but I do recall that Labour’s policy is, firstly opposed to selling assets, and, secondly, to selling them to foreigners. It is just that those members did it when they were in Government.

Living Standards, Inequality—Prime Minister’s Statements

4. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Does he stand by his reported statement of 30 May “Are we deeply unequal? I’m not sure that’s right. I haven’t had a really good look …”?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Prime Minister: The statement as reported is not a correct reflection of what the Prime Minister said. He stands by the full statement that he made.

Metiria Turei: Is the Prime Minister aware that Treasury officials have had a really good look at inequality, and their recent report on living standards in New Zealand said that New Zealand is the seventh most unequal country in the OECD?

Hon BILL ENGLISH: I am quite certain that Treasury has had a close look at inequality, because in the analysis we have done—for instance, on the tax package and on the recent changes in the 2011 Budget—we have ensured that the impact on the general sense of fairness is taken into consideration in respect of our income support system. I think it leads us all to reflect on the fact that when we had 10 years of plenty and large increases in Government transfers, it did not appear to have much impact on the extent of inequality in New Zealand incomes between 2000 and 2010.

Metiria Turei: Would it also help to answer his question “Are we deeply unequal?” to know that according to Treasury the top 10 percent of households in New Zealand own 500 times more than the bottom 10 percent?

Hon BILL ENGLISH: As the member will know, there is a whole range of measures of inequality, ranging from the raw mark of incomes and how unequal they are. That then changes when we take into account Government transfers, which a lot of international measures do not. New Zealand has quite significant Government transfers between high-income and low-income New Zealanders. Then there are inequalities in the holdings of wealth and the holdings of assets, and in that respect New Zealand reflects the reality of most developed economies, which is that when, for instance, an individual farmer owns an asset worth $10 million, he is in a much stronger wealth position than someone who is on the minimum wage and owns nothing.

Metiria Turei: Is the Prime Minister aware that his own Chief Science Advisor, Sir Peter Gluckman, has also had a really good look at the impact of inequality on children and found a number of links between inequality and poor child health and development problems?

Hon BILL ENGLISH: The chief scientist has had a look at those issues and so has the Government. In respect of an issue such as child health, I think the Government can claim two measures that are having a significant impact, and which I think most people support. One measure is higher immunisation rates, which are now the highest they have been in a generation, which is good. The second measure is the roll-out of the insulation programme, which has now reached 100,000 households, and that is biased towards lower income New Zealanders. It is often said that there are significant health benefits from it, and we will get to see just how significant they are.

Metiria Turei: Does the Prime Minister now accept the evidence from Treasury and from his own Chief Science Advisor that New Zealand is a deeply unequal country; if he does not accept that advice, whose evidence is he relying on in this matter?

Hon BILL ENGLISH: No, I do not accept the view that we are a deeply unequal country. I do not think the evidence suggests that, and people drawing that conclusion are wrong. Of course, the big issue about inequality is what we do about it. That has always been the challenge. The fact is that people who lose jobs or get stuck in welfare dependency find themselves in by far the worst position in a society, and this Government is actively moving to break some of those cycles of dependency and poverty.

Metiria Turei: In light of the evidence from Treasury and his own Chief Science Advisor, will the Prime Minister commit to rejecting any recommendations from the Welfare Working Group report that will increase, and be shown to increase, inequality?

Hon BILL ENGLISH: Having had a very good look at the Welfare Working Group report, I do not see any recommendations there that will increase inequality. What those recommendations will do is give more people access to the world of work, and that is the best way to reduce inequality. The other thing it will do is break the pattern of the previous Government, which was to leave hundreds of thousands of New Zealanders marooned on long-term benefits and do absolutely nothing about it.

State-owned Assets, Sales—Estimated Costs

5. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: What is his current best estimate of the cost of the sale of State-owned assets?

Hon BILL ENGLISH (Minister of Finance): If the member is referring to the planned sale of a minority stake in four State-owned energy companies to New Zealand investors, subject to voters’ endorsement in an election, I do not have a firm estimate at this very early stage. However, I can say that the Government intends to use its buying power in a market where there are plenty of organisations that seem to be willing to assist in this process and not many other opportunities for them to sell their services. We expect to keep a very tight rein on costs.

Hon David Cunliffe: Has the process of selecting commercial advisers or other assistance for the sale process commenced; if so, what fees and costs are envisaged as part of this advice?

Hon BILL ENGLISH: I am advised that a process has begun to get the necessary expertise. One thing that has become clear is that the Government’s intention to sell shares to Kiwi mums and dads is a bit more expensive than a one-off sale to one buyer. But, as I said, the Government will use its buying power to keep the fees as low as possible.

Children, State Care—Government Support

6. JO GOODHEW (National—Rangitata) to the Minister for Social Development and

Employment: How is the Government working to support and protect our most vulnerable children in care?

Hon PAULA BENNETT (Minister for Social Development and Employment): We have announced a wave of initiatives under this Government, like the Never, Ever Shake a Baby campaign and the Auckland District Health Board shaken baby prevention programme, and the nongovernmental organisation First Response programme, and we have put social workers into hospitals, amongst many others. As part of Budget 2011 we have announced $43.7 million for services for children in care, as part of this Government’s focus on children. This package aims to address a range of unmet health, mental health, and education needs for children in care. We have about 4,500 children in care at any one time, and about 2,200 who go into care in any particular year. These children are our most vulnerable. They need our help, and we can do better by them.

Jo Goodhew: What support services will these children now receive?

Hon PAULA BENNETT: We have broken it down into a number of different initiatives. The first is the extra gateway health and education assessments, which are receiving $15.3 million. That is to ensure that not only those children who are already in our care, or who enter it in a year, but also another 1,500 who go through the family group conference process will be comprehensively assessed. Once we know what is wrong with them, we then need to work out what we do with them. We have put another $14.5 million into mental health services for children in care, so that we can directly purchase the help that they need. For early childhood education for children in care, there is $11.4 million. That is for those aged between 18 months and 3 years, to make sure they can get 20 hours’ free care. I am very supportive of the parenting support that will go to foster parents and grandparents raising grandchildren. There is $2.4 million through Parents Inc. throughout the country.

Jo Goodhew: Has she seen any other policy responses to the difficult issues that face our vulnerable children?

Hon PAULA BENNETT: Yes. I keep hearing constant criticisms from the Opposition that this Government is not doing enough in the area of children, and certainly for the most vulnerable children who need our help. Yet in the 1990s, under the Labour Government, Annette King completely rubbished the idea of having a children’s Minister when a National MP suggested it. Now we have her saying nothing happened under the 9 long years of Labour. A lot has happened under this Government of 3 years, and now all that she can do is to try to recycle a very—

Mr SPEAKER: We will not use that kind of question to attack the Opposition.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It is the question, which is an ongoing one, of the front bench or Ministers currently sitting on the front bench continuing to talk while you are on your feet. The Minister did that for quite some time, even after she had seen that you were on your feet.

Mr SPEAKER: The member himself is not totally immune from such behaviour. [Interruption] The member is not too bad; I accept that. But then again, the Minister sat down reasonably promptly. It is a judgment call when I sit a Minister down like that, but I am not too happy. I realise that these questions are perfectly in order, and it is a matter of balance about how they are answered. But I do not want to hear an overt attack on the Opposition, using that kind of question. That is why I sat the Minister down.

Question No. 7 to Minister

Hon SIMON POWER (Acting Leader of the House): I raise a point of order, Mr Speaker. I wonder whether I could raise an issue in respect of question No. 7. The question asks the Minister of Transport: “Were all comments he made on behalf of the Prime Minister in response to Oral Question five yesterday accurate?”. This is not a criticism of the question; it is a point of clarification. I know that the Minister is very keen to answer this question, but when he made those comments yesterday he was answering on behalf of the Prime Minister, not as the Minister of Transport. To be helpful, the question could ask: “Were the comments the Prime Minister made in response to question No. 5 yesterday accurate?”, or “Does he agree with the answer that the Prime

Minister gave in response to question No. 5 yesterday?”, but here I think we are confusing the role of the Minister of Transport, in his capacity as answering on behalf of the Prime Minister yesterday. I do not think it matters for the purposes of the Minister’s answer today, and I know he is keen to answer the question, but I just wondered whether the matter might be considered by you.

Mr SPEAKER: I hear the point the member makes, and he makes a good point. I want to clarify the situation for the House. Today the Minister is being questioned in his role as the Minister of Transport, so any supplementary questions relating to the primary question must relate to any transport issues or transport comments made by the Minister in answering oral question No. 5 yesterday, The Minister cannot be questioned on any other matters that he may have covered on behalf of the Prime Minister yesterday as the Minister of Transport, or at least for supplementary questions to be in order they must relate to transport issues that were commented on in answering question No. 5 yesterday.

Jobs—Statements Made on Behalf of Prime Minister

7. Hon DAVID PARKER (Labour) to the Minister of Transport: Were all comments he made on behalf of the Prime Minister in response to Oral Question five yesterday accurate?

Hon STEVEN JOYCE (Minister of Transport): Speaking as the Minister of Transport, I believe the responses made by the Minister yesterday on behalf of the Prime Minister were indeed accurate. Indeed, as a casual observer I thought they were answered reasonably well.

Hon David Parker: When he said yesterday that the previous Government “saw fit to have an international tender for rolling stock and under its watch the Korean trains were built in Korea.”, was he aware that at that time the railways were not owned by KiwiRail but by Toll, and the tender was not from either Toll or the then Government, but rather from the Greater Wellington Regional Council?

Hon STEVEN JOYCE: The previous Labour Government provided $200 million of funding through the National Land Transport Programme to the Greater Wellington Regional Council to purchase new electric trains. It could have placed any condition it chose on Greater Wellington’s procurement, but in fact decided not to. I think that action in Government speaks louder than any words today by Mr Parker in Opposition. As usual, Labour members are lambs in Government and lions in Opposition.

Hon David Parker: That was a very long yes. Was he also aware that Hillside workers at the time were trusted by Toll, employed, and kept busy cost-effectively rebuilding rolling stock for the Auckland commuter trains, thereby keeping skilled engineering and manufacturing staff in jobs, and contributing to the New Zealand economy?

Hon STEVEN JOYCE: I am aware of some of the excellent work done by the workshops in Dunedin, but again I say to the member what I said to him yesterday, which was that we must give KiwiRail the opportunity to make its own business decisions about what it does to operate successfully. If we were to insist that KiwiRail paid higher for rolling stock and electric trains than can be purchased from other vendors, we would basically be saying to it that it will be uncompetitive, and that would put at risk far more jobs, including the 4,000 jobs of the KiwiRail operation.

Hon David Parker: Is not the real reason he misrepresented the record of the Labour Government, Toll, and Hillside that he is trying to avoid his Government being held to account?

Hon STEVEN JOYCE: I raise a point of order, Mr Speaker. I do not believe the member can say that, because that is certainly not what I said in response to the previous question.

Mr SPEAKER: There was a fine line in the question. To assert in a question that a Minister misrepresented something is certainly right on the boundaries of what might be acceptable. The member did not say that the Minister had not told the truth; he said that the Minister had misrepresented. We do not normally rule out in general debate an allegation that someone had misrepresented something, because it can be done perfectly accidentally, but one should not really

build that into a question. I will not rule it out, but I caution the member that the Minister will have open slather in responding. Once that kind of assertion is made in a question, I will not pull up the Minister in terms of how he responds.

Hon David Parker: I raise a point of order, Mr Speaker. Thank you for that ruling, because neither did you pull up the Minister for his very long yes answer in response to the second supplementary question.

Mr SPEAKER: The member will resume his seat. We will not get into that sort of thing, at all. I let the member get away with his comment at the start of his last question, because I believed the Minister had made an unnecessary comment at the end of his answer. The member’s comment at the start of his question was also out of order, but I let it go, and I will not now have him use a point of order to try to give it more credibility than it had before. The member may repeat his question, and I will not rule out that claim in his question, but it does give the Minister a lot of licence in answering.

Hon David Parker: Is not the real reason he misrepresented the record of the Labour Government, Toll, and Hillside that he is trying to avoid his Government being held to account for its double standard in subsidising irrigation schemes for farmers, changing the labour and tax laws for The Hobbit and gambling laws for the casino, but refusing to even consider keeping real manufacturing jobs in New Zealand for New Zealand workers?

Hon STEVEN JOYCE: Firstly, I will say to the member for the final time that I did not misrepresent the situation. The previous Labour Government provided over $200 million of funding to the Greater Wellington Regional Council to purchase new electric trains in 2007, and I understand that the then Minister of Transport was at the signing ceremony for the purchase of the trains. That Government placed no limits on the procurement whatsoever, and Labour members are now sitting in Opposition and saying that they would have done it differently if it had been them. That is absolute rubbish.

Mr SPEAKER: I want some order in the House now, so that I can hear members.

Clare Curran: Has the Government not contravened section 4 of the State-Owned Enterprises Act, which requires KiwiRail to be operated with a sense of social responsibility by having regard to the interests of the community in which it operates and by endeavouring to accommodate or encourage these when able to do so?

Hon STEVEN JOYCE: No. In addition I would point out that the procurement rules advised not just for Government departments but also for State-owned enterprises and other organisations state that tenderers must not give preference or weighting to local content in itself. Also, so that we are clear, those procurement guidelines were set up by the previous Government in 2001, they were refined in 2006 and in 2007, and in all cases they say that Government agencies are not to provide preference to local tenderers over foreign tenderers.

Clare Curran: Does he not believe that section 4 of the State-Owned Enterprises Act requires the shareholding Minister and the Government to protect New Zealand jobs rather than ship them offshore, or has he not read it?

Hon STEVEN JOYCE: What I do believe is that we need our State-owned enterprises to be run effectively and to do the job commercially, so that they are successful. In fact, the Act requires that they be operated commercially and successfully. The Act does not require that they make decisions that would not be sensible commercial decisions, and we do not place that requirement on any New Zealand company.

Clare Curran: I seek leave to table the State-Owned Enterprises Act—

Mr SPEAKER: We are not going to do that. The member will resume her seat.

New Zealand Literature and Culture—Promotion

8. NICKY WAGNER (National) to the Minister for Arts, Culture and Heritage: What reports has he received on recent developments there have been to promote New Zealand literature and culture?

Hon CHRISTOPHER FINLAYSON (Minister for Arts, Culture and Heritage): A number concerning the announcement on 2 June by the German Foreign Minister that New Zealand will be the country of honour at the 2012 Frankfurt Book Fair. This fair is the world’s most prestigious and well-attended international book and media trade fair, with about 7,500 exhibitors from over 110 countries—

Grant Robertson: See if you can get through without saying anything nasty.

Hon CHRISTOPHER FINLAYSON: —Mr Robertson—and about 300,000 visitors over a 5- year period. The country of honour showcases its culture in a year-long programme throughout Germany, culminating in the Frankfurt Book Fair itself. New Zealand will exhibit its arts, its creative industries, and its stories to international audiences and businesses.

Nicky Wagner: What opportunities does the Frankfurt Book Fair present to New Zealand as the country of honour?

Hon CHRISTOPHER FINLAYSON: As the country of honour, New Zealand also has the opportunity to raise its profile not only in Europe but also throughout the 110 countries and among the hundreds of thousands of visitors who will go to the book fair. It represents a very special opportunity to promote New Zealand literature, culture, trade, and tourism on the world stage. In addition, New Zealand will have a higher profile in other areas, including education, film, and digital media, than it would otherwise have had given the recent success of the New Zealand film Boy, not to mention the first instalment of The Hobbit, which will be released late next year thanks to the Prime Minister, because we are Hobbit lovers on this side of the House. This will allow New Zealand to showcase its natural environment and culture.

Mr SPEAKER: The House will come to order.

Foreign Affairs, Minister—Use of RNZAF Aircraft for Travel

9. DAVID SHEARER (Labour—Mt Albert) to the Minister of Defence: Does he still agree with all of the statements made by the Minister of Foreign Affairs on that Minister’s use of RNZAF aircraft to travel to Vanuatu in February of this year?

Hon Dr WAYNE MAPP (Minister of Defence): Yes.

David Shearer: Does he still agree with Mr McCully’s statement on the morning of 4 May that the Boeing 757 that had taken him to Vanuatu had broken down, requiring the air force to send an Orion to pick him up; if so, how does he explain his reply to written question 3353 that it did not break down?

Hon Dr WAYNE MAPP: There is dancing on the head of pin, here, I think. One of the 757s had in fact broken down, which necessitated the 757’s return to New Zealand to enable—there were two of them, you see—the other one to continue its training mission to Antarctica.

David Shearer: Did he know before Mr McCully departed for Vanuatu on the 757 on 13 February that the plane taking him there would need to return to New Zealand on the same day because of the unscheduled maintenance needed on the second 757, which was scheduled to travel to Antarctica; if so, on what date did he learn that the other plane would have been sent to pick up Mr McCully from Vanuatu?

Hon Dr WAYNE MAPP: As the questioner said, the maintenance was unscheduled; thus I did not know that at the time.

David Shearer: Did the aircraft carrying Mr McCully to Vanuatu travel via Samoa or any other Pacific nation to pick up other passengers, as was suggested by Mr McCully?

Mr SPEAKER: I apologise to the member. I ask David Shearer to repeat his question. I say to the National backbenches that I want to be able to hear these questions.

David Shearer: Did the aircraft carrying Mr McCully to Vanuatu travel via Samoa or any other Pacific nation to pick up other passengers, as was claimed by Mr McCully?

Hon Dr WAYNE MAPP: It is my understanding that the Samoan delegation was taken to Vanuatu. I understood that to be from New Zealand. I also say that the member was misinformed when he said that people were left behind in Vanuatu. That was not the case.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It was a very carefully drafted and carefully worded question as to whether the plane went via Samoa. That question was not addressed. The member did say that Samoans were taken on it.

Mr SPEAKER: The member will notice that I was on my feet for quite a while. I hear what the member said by way of point of order, but I think the Minister has answered that Samoans were taken on the flight. That does leave the question where they were picked up from, I accept that, but there are further supplementary questions that could be used to clarify that situation. I think it would be wrong of me to assume in any way anything from the Minister’s answer. The Minister appeared to answer the question, because he confirmed that in his understanding Samoans were taken on the flight. There are further supplementary questions to dig further into that. That is where I think the Speaker should leave it.

Hon Trevor Mallard: Were the Samoans who were taken on the flight picked up in Samoa?

Hon Dr WAYNE MAPP: I understand they were picked up from Auckland, but, frankly, I simply cannot understand why the Opposition—

Mr SPEAKER: No, no, it is not in order to make that kind of comment. A fair question was asked and it was answered. I thank the Minister.

Accident Compensation Corporation—Independent Disputes Tribunal

10. JAMI-LEE ROSS (National—Botany) to the Minister for ACC: What action has the Government taken to deliver on its 2008 election promise to “investigate the introduction of an independent disputes tribunal to end ACC’s dual role of judge and jury on disputed claims”?

Hon Dr NICK SMITH (Minister for ACC): From 1 July 2011, ACC subsidiary company Dispute Resolution Services Ltd will become an independent Crown company. This was seen as the most effective way to ensure an independent process for handling complaints about ACC’s decisions. It also makes sense as Dispute Resolution Services Ltd now provides dispute resolution services in the telecommunications, health, and financial services sectors. An efficient, independent service will be essential also if the Government proceeds with introducing choice into the work account of the ACC.

Jami-Lee Ross: What reaction has there been to the announcement in May that Disputes Resolution Services Ltd will become an independent Crown company?

Hon Dr NICK SMITH: The announcement has been well received by individuals and organisations across the board in the ACC stakeholder community. Access Support Services claimant representative Tony Gibbons said the moves were sensible and workable while retaining the skills of Disputes Resolution Services Ltd staff. The National Foundation for the Deaf said that for people to have confidence in Disputes Resolution Services Ltd decisions, it is important that there is a greater separation between it and ACC, and it congratulated the Government on the move. The separation of Disputes Resolution Services Ltd from ACC is part of a progression of sensible reforms with ACC to improve its cost-effectiveness and the service for claimants.

Chris Hipkins: Why should New Zealanders believe that his Government is giving accident victims a fair deal when the number of ACC claims being sent to review has practically doubled under his watch, the number of elective surgery applications being declined doubled in his first year as a Minister, and the number of cases going to the District Court has significantly increased, or are these just more examples of Kiwis paying more to get less for ACC as he prepares it for privatisation?

Hon Dr NICK SMITH: Those are a number of incorrect claims by the member. This Government inherited ACC having incurred $7.2 billion worth of losses. Anybody in this House who pretends that no change was desirable just illustrates the financial recklessness of members opposite.

Chris Hipkins: I raise a point of order, Mr Speaker. I appreciate that my question was reasonably wide and had a number of limbs to it—

Mr SPEAKER: No, we are not going to go down that track. If the member wanted his question treated more seriously, he should not have had the last clause in it. When he makes provocative statements, he will get provocative answers. I am not sure how often I have to repeat that. I am sure the member is not a slow learner.

Schools, Special Needs—Thurston Place College Consultation

11. Dr RAJEN PRASAD (Labour) to the Minister of Education: Is she satisfied that appropriate consultation has taken place with local residents directly affected by the proposed Thurston Place College to be built in Pakuranga?

Hon ANNE TOLLEY (Minister of Education): To be frank, no. However, my concern has to be primarily for the educational needs of this very vulnerable group of young people. They need and deserve the best quality education we can provide, as do all students. Thurston Place College is established on the site of the former Waimakoia Residential School, which was a very different residential school. As this site was already designated as a school site, there was no requirement to consult on the school’s establishment. However, I have insisted that the Ministry of Education and the establishment board work closely with the local schools and community as they continue through the process.

Dr Rajen Prasad: Given the fact that several large meetings in Pakuranga over the last week have raised serious concerns about not being properly consulted on the proposed Thurston Place College, what further action will she now take to ensure that her ministry will properly consult local residents and staff of neighbouring schools as a matter of urgency?

Hon ANNE TOLLEY: As a matter of fact, one of those meetings was called, I understand, by the Ministry of Education, and it provided at that meeting quite a range of information about what is proposed. As I said in my answer to the primary question, I have asked the ministry to make sure that as we work through this process, it is in close consultation with the local community and the local schools.

Dr Rajen Prasad: Why will the Minister not halt all work on the building of Thurston Place College in order to complete meaningful consultation with local teachers, schools, and residents?

Hon ANNE TOLLEY: This is a very difficult position for these young, vulnerable students. The previous Government allowed them to be educated and housed in disgusting conditions for 9 years. The Education Review Office reported year after year, and put in commissioner after commissioner. These students were being educated in nothing more than sheds. This Government has said that we cannot do that to this vulnerable group of young New Zealanders. They deserve a good education, they are in the care of the State, and at this school we are looking to provide that. At the same time we have to make sure there are appropriate measures in place, and I understand that the ministry and the establishment board are now making those measures available and clear to the surrounding community. I have insisted that they keep that community in close contact with all the plans.

Dr Rajen Prasad: I raise a point of order, Mr Speaker. My question was quite specific, and it was “Why will the Minister not halt all work …”. I did not hear a clear answer to that question.

Mr SPEAKER: The member may not have heard the answer he wanted to hear, but I clearly heard the Minister say that she is not prepared to do that, because of the conditions these pupils have been taught in over recent years. That may or may not be an acceptable reason to the member,

but that is the Minister’s reason why she is not prepared to halt progress on the thing. It is a perfectly reasonable answer.

Raymond Huo: Would the consultation have been better if the majority of the immediate community had not been Asian, or does this approach meet the new standards for consultation generally?

Hon ANNE TOLLEY: I find that accusation absolutely insulting. I did not know that the majority of the local community was Asian. As I have said, I find the consultation that has happened with the community less than desirable, and I am very disappointed that they have not been consulted right through the process.

Raymond Huo: I seek leave of the House to table an online petition to show that as of today 1,535 people have signed the online petition to stop Thurston Place College.

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.

Public Service—Minister’s and Prime Minister’s Statements

12. CATHERINE DELAHUNTY (Green) to the Minister of Finance: Does he stand by his reported statement that there is “too much waffle coming from Government departments” and agree with the Prime Minister’s assertion that the public service is “bloated”; if so, why?

Hon BILL ENGLISH (Minister of Finance): Yes, I do agree with the Prime Minister. The full quote of what I said was “The previous Government’s decision to massively ramp up spending in the 2000s left behind a large, structural budget deficit, and a bloated public sector that by 2008 was crowding out the competitive sectors of the economy.” I can reassure the member that the Government is ensuring that the public sector delivers better front-line services, better value for taxpayers, and helps us to achieve a faster path back to Budget surplus, at the same time as meeting New Zealanders’ demands for consistently improving public services.

Catherine Delahunty: What, then, is his response to the recent survey Constructing Workplace Democracy: Women’s Voice in New Zealand Public Services, which showed that 50 percent of women workers in the Public Service work many more hours than they are contracted for, but that only 14 percent receive any extra payment for this work?

Hon BILL ENGLISH: I am not aware of the particular survey, but we do have thousands of very well-motivated, professional public servants. It is incumbent, particularly on the management of our Government agencies, to engage with the people whom the member is referring to, whether women or otherwise, understand why they are working a lot more hours than they are paid for, and put better processes in place so that they can meet public expectations for service at the same time as Public Service staff can have reasonable and balanced lives.

Catherine Delahunty: Does the Minister think that receiving an average before-tax salary of $43,185, as the survey reveals women do, indicates a “bloated” approach to paying female public servants?

Hon BILL ENGLISH: No, I do not. I think the survey will express what we know fairly well— that is, there is a predominance of females in the lower-paid occupations of publicly funded services. What I think is important is that we organise those services efficiently, so that those very committed public servants can see that their efforts are leading to an efficient delivery of services. Too often I meet front-line Public Service staff who believe that their management do not always know how their services work, and whose contribution could be viewed much more constructively in the time of consistent change that we will see over the next 3 or 4 years.

Catherine Delahunty: Does he consider that the Prime Minister’s own recent derogatory comments regarding public sector workers will add to female workers’ stress, especially when the survey reports that 43 percent of women workers experience bullying in the workplace?

Hon BILL ENGLISH: No, I do not think the Prime Minister’s comments will have that effect. But we do know that productive and efficient workplaces are places where the staff are happy to turn up to work, and where they can thrive and fulfil their own potential. My guess, actually, is that workplaces where there is bullying of the sort that the member is referring to are probably not well run. They probably have management who do not understand how the front-line services are working, and if they have poor relationships within that workplace, they probably offer a poor and inefficient service.

Catherine Delahunty: I seek leave to table the Victoria University survey report, prepared for the Public Service Association, Constructing Workplace Democracy: Women’s Voice in New Zealand Public Services.

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

ENDS

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